What Should You Do If Your Parents Did Not Save Enough For Retirement?
The saying – make hay while the sun shines – holds across all situations. A few things can’t be undone, and in the end, you might regret them. But why not act on time? Your aging parents perhaps didn’t act, and that’s scary! If they haven’t saved enough during their prime, then your financial future is at risk. A survey shows that almost 35% of people fail to save for retirement.
Another survey reveals that 32% of midlife adults offer financial support to their aging parents. Aging and the issues that crop up aren’t easy to deal with. And since you know you can’t rewind the clock, you need to deal with the matter patiently. If you see your parents belong to the league who didn’t plan ahead of time, here are some steps to get you through.
Avoid The Blame Game When Talking To Parents
Have an open conversation with parents, especially if you wish to fix the savings part and what and why they did while in middle age. This can be tough since a sense of discomfort peeps in after the usual parent-child roles get reversed. To add more, feelings of shame and guilt are common too. Parents can often get into a defensive mode when explaining the condition of finances to their children.
The purpose isn’t that! So steer clear of the blame game. Do not point your fingers at them or attack. The goal is to make them a sense of where they went wrong. And if time persists, then they must act now, without wasting time.
Have Other Family Members On Board
In the end, one’s kith and kin are real sources of love and support, including siblings. This situation might also cause you to turn to them and seek their help. By sharing the financial responsibility with your siblings, it might cause you a less emotional burden. At the same time, they might even offer fresh perspectives of dealing with the situation. So take their suggestions and implement them if you feel necessary.
Plan A Budget
Making a budget will not help you combat the situation, but you’ll get a fair idea about what you have and how much you need to make things work. At this time, figure out some common things- like any present income, any assets that are lying somewhere, or any add-on sources of retirement income, which would offer social security and pensions. If you have ascertained these, then move on to expenses for healthcare, utilities, property matters, and car payments, and so on.
If you know the cash flow structures of your parents, then you can plan things much better. Remember that recurring expenses add up over a month or two. So you need to cut down on a few aspects like magazine subscriptions, groceries, or sometimes the money they donate to others, including their grandkids!
Encourage Phased Retirement
The best time to plan for retirement is before your parents retire. And if you happen to get that chance, grab it. Adult children, as per experts, might help parents try out phased retirement. This means they can try partial retirement while generating some income at a point in time. It is ideally an employment agreement, where the worker can reduce the working intensity very slowly, for some amount of time, till the person retires completely. Experts have added that phased retirement worked great for many approaching retirement age but didn’t have optimum savings. This working model offered them retirement benefits, even when they made income from the existing work.
Add New Sources Of Income
Sometimes parents need to embrace retirement as it is, but not forget that it’s not the end of the world. So to make ends meet or maintain the good lifestyle they always had, it will be worthwhile adding a few passive modes of income.
Or better still, come out of the stressful ‘standard employment model’ that’s not suited to their age or health. In the gig economy, middle-aged and senior citizens can put their skills to work and generate a proper income mode alongside millennials without returning to the usual 9 to 5 routine.
It’s difficult, no doubt, but you can get your parents’ life back on track during retirement. Plan well and go slow.
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