Are You Retirement Ready? 5 Ways to Help Your Parents Prepare for Retirement

Are You Retirement Ready? 5 Ways to Help Your Parents Prepare for Retirement

July 01, 2022
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The sandwich generation is a term commonly used to describe those between the ages of 40 and 59 who are responsible for raising their family and are also often helping their aging parents manage their ongoing needs. Those members of the sandwich generation typically manage the burdens of the old and young at once. They may support a grown child, aging parents, and young children.1

The key for many people in this generation is to provide guidance and support to their parents without derailing their own life and long-term goals. Here are some tips that may help.

#1: Get Ahead of Medicare and Medicaid Programs

Find out if your parents qualify for any financial assistance programs. These programs may help defray some of the costs while creating more opportunities for savings. For those over the age of 65, Supplemental Security Income may be an option. 2

#2: Evaluate Your Parents’ Financial Needs

It may be helpful to spend some time discussing your parents’ financial needs. This effort may include taking a look at their current income and debts. It may involve finding ways to manage their expenses. It is also a good idea to consider how much money they need each month to manage their financial obligations during retirement. These expenses may include a mortgage loan payment or other long-term financial obligations that may carry over into retirement years.

#3: Determine if Downsizing Is Beneficial

Downsizing may mean moving to a new home that is smaller with a lower mortgage payment. It may mean moving from a house into an apartment or condo with fewer maintenance tasks. If the market conditions make sense, it might be time to consider a move to manage financial obligations.

#4: Create a Budget for Retirement

With a solid understanding of financial needs, it is then helpful to create a monthly budget. A budget shows if there is a need for more income. If there is, it may be time to consider options to manage financial needs, such as working a part-time job or using retirement savings differently.

#5: Manage Expectations

Sometimes it is necessary to consider limitations on spending to ensure there is long-term access to available funds. For seniors, it may mean controlling their spending on unneeded items. This evaluation could mean spending more time balancing accounts for those struggling with finances. Before heading into retirement, the key is to ensure there are clear expectations of what retiring is likely to be like for them and what your parent’s lifestyle will look like during retirement. 3

It is important to talk to parents who may need some help in the years leading up to retirement to clarify where they stand in terms of finances. Doing so now may help determine what changes could create better financial results later. Working with a financial professional may be one step for your parents to consider.

 

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05282505

 

1 The Sandwich Generation, Pew Research Center,
https://www.pewresearch.org/social-trends/2013/01/30/the-sandwich-generation/

2 How to Help Your Parents Retire Without Derailing Your Own Retirement, The Motley Fool,
https://www.fool.com/retirement/2019/08/25/how-to-help-your-parents-retire-without-derailing.aspx

3 How to Help Your Financially Struggling Parents, The Balance,
https://www.thebalance.com/millennial-plan-to-help-parents-financially-4134994