As our parents reach retirement age, we’re faced with the reality that many did not have their finances in place to secure retirement funding. Their access to Social Security will likely cover base costs, but it’s not going to be enough to cover the cost of living. As their children, we want their retirement to be a time of relaxation and enjoyment, not a source of stress that lasts until the rest of their lives.
Interest rate hikes and a dwindling Social Security fund now have 58% of Americans providing some form of financial assistance to their aging parents. This is a hard burden on the family as, they too, face economic uncertainty and a shifting job/housing market.
How can we, their children, provide helpful aid and assistance without the financial burden? Consider the following.
Understand Their Finances
You can’t help your parent’s finances without knowing where they stand. It’s time to open the books and take a deep dive into their income, expenses, and investments. This will provide a solid foundation of how to best budget their retirement years while accounting for the unexpected.
Should you provide financial help if there’s an obvious gap? That depends.
Money taken from your family and own retirement goals could slow the compounding benefits of the market. It’s a hard decision, no doubt. Try helping your parent(s) downsize before taking on their financial responsibilities. Then, fill the gaps with what you feel comfortable with — especially if it helps with…
Keeping Them Healthy
Healthcare costs begin to skyrocket as your parent(s) get older. There’s simply more going on in their body and minds because of their advanced age. This means more trips for doctor checkups and the likelihood they’ll need procedures. While Medicare will cover a majority of these costs, there will always remain some fraction which requires out-of-pocket spending.
How can you mitigate the financial burden of healthcare?
- Encourage an active lifestyle to help manage their weight and well-being
- Buy medical products through USAMedicalSurgical.com for lower costs
- Secure their surrounding with quality-of-life items to aid mobility and home safety
More importantly, check in on them to see they’re doing well mentally. Get them involved with local activities, hobbies, and events to keep them sharp. This will help lower risks like diabetes and heart disease. The small changes will have a substantial impact on the medical costs in these years they need it the most.
Take Control
Was your parent a financially-savvy person in their prime years? Do you believe they understand personal finance as well as you do? If you’re unsure and have already had “the talk”, then consider taking control of their finances.
Their advanced age could cause financial disrupts from occurrences like illness or on-set psychological issues. You, stepping in, could help manage finances before they burn through reserves. Or, fall victims to common elder scams.
Check into these:
- A durable power of attorney
- Collecting all financial documents
- Medicare/aid and SS permissions
- Insurance policies
You may discover under-performing investments in this process — investments that could create a safe cushion throughout their retirement. Talk with them, a financial planner, and an attorney to start the process. Then, as they did you in youth, set allowances and help stabilize long-term investments and regular retirement income.
Consider the Living Space
Will they live at:
- Their home?
- Your home?
- A community?
You’ll want to understand and talk to them about their physical and psychological well-being. Active parents will have many years ahead of allowing them full freedom in their own domains. But, there may be early signs it would make more financial sense to bring them into your home. Or, secure their position in a caring community.
It’s becoming increasingly common to take aging parents into your own home — but do plan for these:
- Set rules for your home so they understand their boundaries to prevent family tension
- Fix expenses like having them help pay for food and utilities, and helping pay rent/mortgage
- Get the home prepared for their presence including safety items, meal prep, and family inclusion
Taking in a parent can become quite the burden.
You may also consider using funds to pay for caregivers in their home once that time comes. Use a combination of references and online research to find the ideal candidates.
It’s Your Turn to Care
Your parents spend decades caring for your well-being. Now it’s your turn.
As our parents reach retirement, many will need financial help. This post covered four main ways to help with this issue without breaking your bank. But, there are many more activities and strategies you’ll want to explore. So, dig around the site and grab everything you need to be a loving, caring child to your aging parents.