What if your parent(s) can’t afford to retire?
What if your parent(s) can’t afford to retire?
In our middle-class financial planning practice we don’t see a lot of 60 something’s who can’t afford to retire probably because of embarrassment or lack of ability to pay for our services. What we do see are their children worried about what will happen if their parent(s) can’t work (health) and parental savings are little or none, and they only have social security to support their lifestyle.
What kind of lifestyle can $1,000 or $2,000 a month provide these days? Certainly having a mortgage payment or paying normal rent is a challenge for people living on a limited budget represented solely by social security payments.
So what are the options for 60 something’s with limited savings and only social security as a safety net?
- Continue working until health dictates otherwise, or you’re fired. Part time work can also be an option.
- Move in with relatives or friends to reduce housing, food and transportation costs
- Move into subsidized senior housing where you pay only 30% of your income, if you qualify
- Downsize into cheaper housing with lower rent or ownership costs. This is hard because many times it means leaving friends behind.
- Stop subsidizing children or grandchildren
- Seek guidance to make use of limited resources. AARP and its publications, including its website, is a good source for options.
- Your local area agency on aging, usually connected to a county government, is an excellent resource.
If you’re a child of a senior whom you fear is living beyond their means, what can you do?
- Approach parent(s) gently. Personal economics is a very sensitive topic.
- Ask parent(s) how you can help.
- Talk to aunts and uncles to see how willing they might be to helping a sibling
- Talk to your siblings and get their perspective and input
- Give your parent(s) some space even if you fear they’re not changing fast enough, in your opinion. Try the financial “date” approach where you only talk finances on a predetermined basis.
- Offer to go with them if they are willing to seek professional help
And to end on a worrisome note, be sure you know about “filial responsibility laws” that could force you to pay for parent expenses if they are impoverished. As many as 29 states and Puerto Rico have such laws.
