Can I Help My Parents Plan for Retirement?

Helping parents plan for retirement
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Everyone needs to plan for retirement.

Retirement may be couple of years away or a couples of decades away.

Either way, it is coming.

You may be able to choose the time of your retirement.

Cutbacks or health issues may force you into retirement earlier than anticipated.

According to a recent Nasdaq article titled “Do Your Parents Know How to Plan Retirement?,” it is never too early to plan for retirement.

Help your parents plan for retirement.
Your parents may need support as they plan for retirement.

Unfortunately, many people continue to delay doing so.

The 2018 report on the Economic Well-Being of U.S. Households showed a quarter of U.S. adults had nothing saved for retirement.

Only 36 percent of adults who have not yet reached retirement say their savings are where they need to be.

While reviewing your own plan for retirement is important, it is good to check in on the financial status of your loved ones.

For example, have you talked with your parents about their plan for retirement.

If they do not have savings, they may depend on you for assistance.

Remedying a lack of planning now can reduce strain in the future, just when you are helping your children with college or getting “launched,” or your own retirement planning.

Yikes!

Social Security is expected to be depleted by 2035.

Factoring this “expectation” into the retirement funding of your parents, you may need to research and prioritize other sources of income they may have available.

Even with Social Security, your parents would likely need additional savings to maintain their current standard of living.

Another important consideration as you plan for retirement is health care costs.

Medicare does not provide coverage for all health care needs.

For example, assisted living is not included in Medicare coverage.

What are important questions for you and your parents to answer as you help them plan for retirement?

Ask about sources of income and review any debt.

Does your parent have Medicare, life insurance, and long-term care insurance?

Discuss where your parents want to live in retirement, if they cannot remain where they are.

Do a checkup to see if they are on target for their retirement plan.

Finally, ask about estate planning and financial documents.

If you are an agent or executor in the estate plan of your parents, you will need to have access to the appropriate documents at the time of need (if not sooner).

Helping your parents budget and save now can help them have a financially secure future, as well as minimize future financial burdens on you.

As you take these steps, prioritize your own savings as well.

It is equally important for you to plan for retirement.

By the way, treat your parents well and with respect.

Your children are watching.

Reference: Nasdaq (Dec. 29, 2020) “Do Your Parents Know How to Plan Retirement?”

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