How to help parents plan for retirement

There’s no definitive answer to how much is enough for retirement, but there are a few caveats you should be aware of that benefit both children and parents.

Talk openly about retirement

Retirement is not always a pleasant topic to discuss. It’s important to address it openly, before you realize your current financial resources aren’t enough for your parents’ health and lifestyle needs. Ideally, you should schedule a face-to-face talk a few years before they retire.

You should ask your parents if you’ve ever thought about retirement and if you’ve saved money for retirement.

Know what lifestyle parents want to lead after retirement

Some people want to continue their pre-retirement lifestyle. But someone else might have great ideas for a to-do list when there’s plenty of time.

Maybe, your parents have not thought about what life will be like after stopping working. You need to know their point of view to give the right advice.

If parents aren’t sure how they want to live after retirement, ask them what’s important to them. Then, work with your parents to make an appropriate budget.

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Find out your parents’ finances

Regardless of your retirement plan, your parents may encounter various unexpected situations.

Even if you already have a relatively high savings at work, there are different types of financial stress that affect this amount. For example, unfortunately, they encounter unforeseen events such as accidents or illnesses. The cost of medication and treatment often takes a big toll on parents’ finances.

So, knowing their financial situation, you will calculate how they have to plan for living expenses, medical expenses, living needs.

Need an emergency backup

Many people think that when they retire, they will only spend 2/3 of their working time. But as mentioned, the health of the elderly deteriorates very quickly. Expenses may increase more than before because of the burden of treatment costs.

For the elderly, a simple fall can lead to severe consequences such as broken bones and hospitalization. Therefore, advise parents to always set aside some emergency savings so as not to get into a difficult situation.

Tell them about the debts

Parents should be advised to settle all debts before retirement. Interest rates continue to increase will create a burden not only for parents but also for children.

Make sure that the outstanding debt is dealt with as much as possible as the parents near retirement. When they clear their outstanding debts, they can have more money to spend and maintain the desired lifestyle.

Don’t make decisions for your parents without consulting

Even if you want the best for your parents, you still can’t make decisions that affect them (while the parents are still sane) without consulting.

In addition to giving your parents a sense of respect, you should also inform them so they can make the final decision that’s best for you.

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