Don’t wait until your parents are retiring to know what they plan to do with the rest of their lives — you may be surprised how and where you fit into the equation.
Retirement Tip of the Week: Talk to your parents and loved ones about how they intend to spend their retirement years, as well as how they plan to pay for it. Ask them where you fit in, and even add a few suggestions for how they can make the most of their golden years.
Retirement planning isn’t just for individuals and couples to discuss — it’s something all family members should have a conversation (or more) about as well. Conversations about finances, long-term care, aging or death may be uncomfortable or depressing, but having an understanding of what elderly loved ones envision for their old age is imperative. Clarity around these topics are helpful not just for the retirement security of the older relatives, but so younger family members know their wishes and expectations.
Take caregiving, for example. Not everyone expects to handle caregiving responsibilities for their parents, and yet, many Americans end up taking on that role. For some people, the responsibilities are physical — bringing them to doctor visits, picking up the groceries — and for others, it is financial — such as managing the bills or paying for a portion of their expenses.
See: How to find your lost 401(k) and other retirement accounts
Caregiving can oftentimes feel like a thankless job, even if family members would do it again and again for their loved ones. The responsibility could also take a toll on the caregiver’s finances, as they may have to leave the workforce, foot a few extra bills or switch to part-time work, and their mental or physical health may take a hit due to stress.
But this responsibility is only one of the components of retirement planning. The conversations likely won’t be completed in a day, or even two or three, but they will set up all relatives for a more comfortable transition should these needs arise.
Here are a few suggestions for what to discuss with your parents or other loved ones before they retire:
- Finances: How much money have the parents saved? What income sources will they have in their old age (such as Social Security, rental income or pensions)? Do they think they’ll need financial assistance, and will that come from family, government or other programs?
- Healthcare: Do they have long-term-care insurance or plans for how they’ll get the medical attention they need in old age? Will younger loved ones be able to help bring them to doctors and if not (because they’ll be at work or live too far), where can they go for this help? Is Medicare enough coverage for their needs or should they consider additional insurance? What kinds of health issues are they experiencing now, or expect to have in old age, that they could try to prevent or delay through healthy living?
- Caregiving: Who will help take care of them? How will either party pay for those extra expenses? If they want to age in place, is their home equipped for those needs? What can the family do now to prepare for this?
- Entertainment in retirement: What do they hope to do in retirement? Will they take on volunteer work, another type of leisurely job or a hobby? A lack of purpose in retirement can be dangerous for retirees.
These are sensitive topics, which means not everyone will be comfortable having them (adult children and their parents alike). Try having the conversation when everyone is relaxed (so not during an emotionally stressful time, such as after a family member has become ill or passed), Kiplinger noted. Some people may be more inclined to have these conversations if they know ahead of time, or if it isn’t focused solely on dollar figures. Other parents may embrace these topics if they’re being asked for advice, or listening to their children explain their own plans for their retirement. Here are a few strategies for initiating these talks.
Having answers to even some of these questions allows both parents and their adult children to prepare accordingly for themselves and each other. Although these may be difficult topics to discuss, any plan is better than no plan in these scenarios.
Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column
