This year, the average age for retirement is 62, an earlier age than respondents planned on retiring at. 62 is the earliest age adults can collect Social Security benefits which might be the reason for this popular retirement age.
If your aging parents are above the average retirement age and are still working, it might be time to talk to them about their finances. You can help your parents prepare for retirement with a few simple steps.
Keep reading to learn more.
Table of Contents
Beginning the Talk
To help your parents prepare for retirement, you have to sit them down and have a talk. If your parents don’t like to talk about money and work their tail to the bone, this conversation might be difficult and even a little awkward.
Approach the subject as gently and respectfully as possible. Listen to what they have to say and let them know you are concerned about their health and financial future.
If possible, get siblings or other immediate family members involved. If they resist the conversation, invite a financial or retirement expert into the mix.
Analyze Finances
When your parents are more at ease with talking about their finances, it’s time to learn about the numbers. Look at the following essential financial information:
- Income
- Monthly expenses
- Assets
- Debt
- 401(k) or IRA savings accounts
- Drafted or updated will
You’ll need this information to assist with financial management and maximizing their income.
Suggest Lifestyle Changes
Don’t bully your parents into changes that they aren’t comfortable making, but talk through possibilities and see if they are receptive to them. Address unnecessary expenses and suggest downsizing.
It’s common for aging parents to wish to age in place at their homes, but joining a retirement community might make more sense for them financially.
Check for Qualifying Benefits
There are a wide range of state, federal, and local assistance programs that your parents might qualify for. This type of assistance can help your parents feel more at ease about going on retirement.
Take Control of Finances
Smart kids can take control of their parents’ finances when they can’t handle bills on their own anymore. Although some aging parents have the cognitive ability to handle their finances, it is an overwhelming task for many.
To ensure you aren’t accused of financial abuse, document everything. If you don’t want to take control of the finances, hire an outside party who can assist your parents.
Don’t Neglect Your Retirement Plans
If your parents are struggling with money, you might feel the urge to cover their expenses. Lending a hand with retirement plans for your parents is great, but don’t let the process derail your plans.
Helping Parents Prepare for Retirement the Right Way
Aging parents who are addicted to working might do so because they don’t have the finances needed to retire. When you help your parents prepare for retirement, they’ll feel more at ease when going through the process.
Learn about their current finances and identify any areas where you might be able to help. Stay financially healthy yourself before attempting to help your parents get their finances in order.
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