William Huston, AIF®, AIFA®

Helping Parents With Retirement: Time for Some Awkward Questions

William Huston, AIF®, AIFA®

William Huston, AIF®, AIFA®

Helping Parents With Retirement: Time for Some Awkward Questions

retired senior citizens

I’m becoming increasingly worried about my parent’s retirement. And I, her only child, am not getting any younger, either.

My parents divorced when I was young. Naturally, money was always a subject that led to tension and anxiety at home.

My mother worked at her hardest, graduating from college as a non-traditional student with me in tow. I would occasionally go to classes with her at the university that would eventually become the place where I worked later in life.

My mom taught me the value of generosity, hard work, ethical behavior, and meeting your responsibilities. I can’t say that life has been easy for us.

Many of my older relatives have pensions and Social Security. They worked at factories in the Midwest their entire lives until it was time for retirement. Though in a sad twist of fate, once many of my relatives retired, the factories where they worked closed.

That wasn’t my mother’s road. Out of respect for her privacy, I will say that at this point in time, my mother is fine. Things aren’t perfect, but they’re much better than they have been.

That said, I worry. Conversations about money have always been tense with my mom.

I believe she fears that I will judge the choices that she’s made. I don’t want to judge her, I just want to know what’s going on.

Added to my concerns about her retirement is the fact I will be starting a family much later than most people, so I’m preparing for that financial reality, as well.

Key Points
  • Retirement planning refers to the process of setting aside and managing financial resources to support oneself during retirement so that you can secure your own financial future
  • Among the best ways that you can help aging parents with retirement planning include helping them create a retirement plan, hiring a qualified financial advisor and assisting them get rid of debt
  • Retirement planning is essential as it helps the retiree have peace of mind as well as adequately prepare for unforeseen circumstances

The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.

What is retirement planning?

advisor and client planning for retirement

Retirement planning refers to the process of setting aside and managing financial resources to support oneself during retirement so that you can secure your own financial future. This can involve determining how much money you will need in retirement, establishing a savings plan to accumulate the necessary funds, and making decisions about investment strategies to help grow and manage those funds. For some, investing in stocks would be ideal while for others, starting their own business would work well.

Retirement planning can also involve considerations about when to retire, how to manage debt, and how to protect assets from unexpected events such as illness or market downturns. The goal of retirement planning is to ensure that you have enough retirement income and resources to maintain your desired standard of living throughout your retirement years.

The stats

It is not unusual for African Americans to help relatives in retirement, siblings with their kids, and even friends when times are hard. In fact, this is so common that people joke about it.

The Great Recession set back many African Americans due to lost jobs, lost homes, and having to help out relatives who experienced financial setbacks themselves. In fact, 49 percent of African-American women found themselves in the position of helping out elderly relatives during the Great Recession, according to a 2012 Washington Post-Kaiser poll.

I thought I was kind of the odd one out in my concerns about my mother’s future until I spoke to a millennial friend of mine who expressed similar worries. Though we are both only children, there is one difference in our very similar stories: She’s Caucasian.

Her father lost his job during the Recession. He was an engineer, if I remember correctly, and has struggled with the change in circumstance since then.

The burden of family finances has landed on her mother’s shoulders in a way that she hadn’t anticipated. There is now a constant tug and pull caused by this huge change. My friend has made the choice to live abroad for a while because she is aware that later on, she might not have that option, since she will have to help her parents as they age.

I fear that this issue is a lot more widespread than we would like to admit. In recent months I’ve seen posts about how Generation X is struggling to handle their finances, take care of their families, and at the same time help out their parents.

How best can you help aging parents with retirement planning?

Helping your parents prepare for retirement can be a thoughtful and valuable way to show your love and support. It will also save you the trouble of having to fully support your parents financially once they retire.

Here are some of the best ways to help your parents prepare for retirement.

Encourage them to create a retirement plan

Help your parents create a retirement plan that takes into account their income, expenses and savings goals. This plan should include a budget, investment strategy, and a timeline for retirement. There are also companies that offer different retirement plans and you can speak to a qualified financial planner to help with this aspect.

Talk about Social Security benefits

Discuss Social Security benefits with your parents to ensure they are aware of how much they can expect to receive and when they can start receiving it.

Consider healthcare costs

retiree and son

Health care costs can be a significant expense in retirement, so help your parents plan for them by ensuring that they have a good health insurance cover. You can also explore Medicare, long-term care insurance, and other options in case of a medical emergency.

Help them to eliminate debt

Encourage your parents to pay off debt before retirement, so they have fewer financial obligations during their golden years.

Discuss downsizing

If your parents have a large home, encourage them to consider downsizing to reduce their living expenses.

Consult with a financial advisor

A financial advisor or financial planner can help you create a retirement plan tailored to your needs and goals and provide tax advice and guidance on investment strategies, how best to utilize your retirement savings and other financial decisions.

Be supportive

Retirement can be a significant life transition, so together with your other family members, try to be supportive and offer emotional support to your parents as they navigate this phase of their lives.

By helping your parents plan for retirement, you can help them achieve financial security and enjoy a comfortable retirement.

Why adult children should help their parents with retirement planning

The importance of adult children helping their parents with retirement planning cannot be overstated. Here are some reasons why:

Ensuring Financial Security

Retirement planning is critical for ensuring financial security during one's golden years. By helping their parents plan for retirement, adult children can help ensure that their parents have enough money to support themselves during retirement.

Identifying Potential Issues

By working with their parents to create a retirement plan, adult children can help identify any potential issues or concerns early on, allowing them to be addressed before they become bigger problems.

Family Harmony

Discussing retirement planning can be an emotional and challenging topic for families, but having these conversations early and often can help promote family harmony and avoid conflicts down the line.

Making Informed Decisions

By understanding their parents' financial situation and retirement goals, adult children can make informed decisions on their behalf if necessary, such as if their parents become unable to make financial decisions for themselves.

Peace of Mind

Finally, helping their parents with retirement planning can give adult children peace of mind knowing that their parents are financially secure and prepared for the future.

I want to urge people to talk about finances with their parents and discuss with them the plans that they have in place for retirement. I have to be honest: those conversations will be awkward, uncomfortable, and scary. But they have to happen.

My own conversations have gotten easier, but I’m not 100 percent convinced that I know the whole picture. Because of that, I’ve begun thinking of some contingency plans. How will I help my mom have a dignified and peaceful retirement? For all I know, she has a million dollars set aside, but just in case, I have a plan in mind.

Bay Street Capital Holdings

Bay Street Capital Holdings

Bay Street Capital Holdings is a Black-owned, independent investment advisory, wealth management, and financial planning firm headquartered in Palo Alto, CA. They firm manages portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility.

Bay Street was founded by William Huston after 13 years of supporting the United States' largest retirement plan ($650B) Thrift Savings Plan. In Scottsdale Arizona, Ekenna Anya-Gafu CFP, AAMS is recognized among the Best Financial Advisors for his responsiveness, friendliness, helpfulness, and detail.

Bay Street was founded to advocate for diverse and emerging fund managers and entrepreneurs.








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