Are your aging parents prepared for their future financially? If you don’t know, you’re not alone. Most people haven’t talked to their parents about their retirement resources.
You might be wondering if this is really any of your business. But the reality is that it may become your business if your parents need financial assistance from you in the future. It can be a touchy topic, but it’s an important one to discuss.
Start by having a serious discussion with your parents about the planning they have done for the future and where they currently stand.
Next, consider a visit with your own financial advisor and attorney to make sure your planning is on track, whether your parents will need financial assistance from you in the future or not.
There is not one right way to help plan your parents’ financial future, because it will depend on the circumstances, their preferences, and will differ for every family. There are, however, things you should do while assisting your parents to assure future financial security for both you and your parents:
Planning has no specific time frame.
Financial planning depends on life events – there is no specific time frame to when it should be done. Events such as gearing up for retirement, reaching retirement or losing a loved one are logical times to look back at your own financial plans, and help your parents reflect on their financial status.
Adjust your short and long term financial goals when these life events occur.
Review financial plans annually.
Because life has a way of changing plans, it’s important for both you and your parents to review plans annually. After retirement, meet with a financial advisor at least once a year, or more frequently, if preferred. During these meetings, check-in to see that goals have not changed and re-evaluate if there have been any major life events that impact financial goals.
Review available savings and retirement lifestyles.
Your parents have worked very hard throughout their lifetimes. As they live without a working income, consider whether they will have any other sort of income coming in. Is there enough money saved to continue with their current lifestyle? They may already have determined the answers to these questions, but knowing this is the best way to ensure all parties are protected for the future.
Diversify your assets.
Work with your financial advisor to diversify and take control of your own assets. Consider: do you still have debt? Are all your assets in a 401k, or is it diversified into things such as rental properties or other investments? Considering these important questions allows families to make sure they are positioned to meet their own financial goals, and can also be prepared to take care of their aging parents financially, if needed.
There is no easy way to determine a plan for your parents’ financial plan. The plan will be different for every family. The best way to protect yourself and your family is to be prepared and visit with your financial advisor to ensure goals are being met, assets are being put to good use and you, your family and your parents are in a financially secure position throughout retirement.