Helping Your Parents Navigate Retirement Finances
When it comes to retirement, it’s never too early to start planning. As you want to have enough money saved to retire at a certain age, it’s helpful to ensure your parents also have a chance to retire successfully. Having financial discussions with your parents as early as possible can end up saving them from struggling when they retire.
A reverse mortgage might be a great option for your parents, but you need to take some time to learn the facts because you will likely be asked “how does a reverse mortgage work?” A reverse mortgage is a loan given to you based on the value of your home and paid by a lender. For your parents to qualify for a reverse mortgage, they need to be at least 62 years old, own their home outright or have a small mortgage balance, and they must be able to make their property charges on time and in full.
Educate them on Scams
The elderly become the prime target for scams, which is why it’s important to educate them as much as possible. Some common scams that target the elderly include Internet fraud, health insurance fraud, telemarketing fraud, counterfeit prescription drugs, sweepstakes, and making unnecessary investments. Alert your parents on all of the scams they might become a target for to help them make wise decisions.
Help Evaluate Financial Assets
Take some time to go over your parents’ financial assets to figure out if they have enough money to retire. Some financial assets you’ll want to discuss with them include:
- Social security
- Cash and savings
- IRA accounts
Helping your parents evaluate all of their assets will determine when they’ll be able to retire. Just because they feel like they’re ready to retire now doesn’t mean they’ll actually be able to.
Help with Budgeting
Talk to your parents about budgeting and saving money. Be sure to stress how important it is to save money now to ensure they have a comfortable retirement. Take the time to go over their financial situation with them and help them figure out ways they can cut back on spending. It’s also important to help them take the necessary steps to get out of debt because they’re not going to want to carry their debt over when they retire.
Stay involved as much as you can. Don’t be forceful when it comes to talking about money with them; instead be supportive. You cannot make your parents do what’s necessary to have a comfortable retirement, but you can keep encouraging them. Help your parents as much as possible, but don’t put your own financial situation in jeopardy. Be honest with them and stay positive.
Planning for retirement should begin at an early age to ensure you have a comfortable retirement. If your parents didn’t start planning early on, they might have some struggles when it comes time to actually retiring. Be there for them and help them figure out the best steps they need to take to ensure they can retire comfortably. Try to help them figure out if a reverse mortgage is a good idea based on their situation and help them set up a budget. Stay involved in their life and offer advice whenever it’s needed.