Helping Your Parents Plan for Retirement

Your parents were financially responsible for you when you were a child and may have even continued helping you out as an adult. Now, you might find yourself in a reversal of roles, worrying about their retirement and how you can help them out. It is not uncommon for people to reach retirement age without sufficient funds. This can put a real strain on the children, who may be trying to save for their own retirement while also putting their children through college. This can be tense emotional territory as well, with parents resenting or resisting their children’s attempt to help them. The tips below can help you navigate this potentially thorny family financial situation and find solutions.

Have the Talk

This can be a tough conversation or series of conversations with your parents. They might want to keep their finances private. They may not want to worry you, or they might feel that you are being controlling. It can help to think about times that your parents had tough conversations with you when you were growing up. Be respectful and nonjudgmental, and if you are having the talk with your siblings, make sure that your parents do not feel like you are ganging up on them. This should not be an intervention. Approach it from the standpoint of wanting to make sure they have a great retirement.

Explore Options

If it appears that your parents do not have enough money to support them in the lifestyle that they plan after retirement, you then need to explore options. Certain plans allow older adults to make catch up contributions, so if they are still working, see if they are putting away the maximum amount. Consider whether they have other resources. For example, if one or both has a life insurance policy, they may be able to sell it through a life settlement. They can look into the pros and cons and find out how to get the maximum cash value by reviewing a guide. You might also want to discuss options such as having your parents come and live with you or supporting them in other ways.

Look Into Assistance

There might be state or federal programs that they qualify for. This could range from getting grants to make their home more energy-efficient and lower utilities to assistance with paying bills to having meals delivered and more. You may also want to think about their health care as they get older. If they do not already have long-term care insurance, it might be too late to get it. However, there may be other options. You might want to look into Medicaid spend down rules and find out whether it would be a good idea to establish a trust to protect those assets. An attorney can help you and your parents explore these options as well as what documents might be needed in case one or both of your parents becomes incapacitated and cannot make medical or financial decisions. Assistance can also include moving to a retirement community where varying levels of monitoring and help may be available.