The idea of reaching retirement age should be something that most people look forward to after years of hard work. For some, though, the possibility of reaching retirement age while not feeling financially secure is a genuine concern. Recent polls have found that more than half of Americans are behind on their retirement savings goals, and twenty percent are unsure of their retirement savings status. In addition, with life expectancy rates increasing and financial stress due to the coronavirus pandemic taking a toll on the economic environment, the potential of running out of money during retirement is high. As a result, young adults have to provide financial assistance to their aging loved ones. A recent study found that one in five Millennials spends approximately $18,000 per year to help financially support their aging parents.
If you’re loved one is reaching retirement age, and you’ve discovered that they aren’t financially secure, here are some ways you may be able to help without putting your financial future in jeopardy:
Consult a Financial Advisor
A financial advisor can assist you and your loved ones in sorting through their finances, create a plan to manage debt, and ensure that their immediate and long-term financial needs can be met. In addition, they can work with you to help alleviate any of the financial stress that you may have taken on in the process of helping your loved ones. Before choosing a financial advisor:
- Be aware of the differences between a fee-only and a fee-based professional
- Consider this list of questions from US News World & Report to ask a financial advisor
- Look into hiring a certified financial planner that specializes in elder care or retirement planning
Create Clear Expectations
Before having a challenging discussion with your loved ones, come to terms with what you’re comfortable doing for them. You may decide that you’d like to invite your loved ones to live with you, or that you’re willing to help pay a specific bill each month, or maybe you’ve decided to loan them a substantial sum of money. Then, be clear with your loved ones about how you are and aren’t willing to provide assistance and create ground rules to avoid confusion or future disagreements. For example, if you’ve decided to loan them money, discuss that you’d prefer the money be spent on debt or mortgage payments rather than on vacations or shopping excursions.
Offer Non-Financial Support
If you’re not able or willing to provide financial support to your loved ones, consider other ways in which you can help ease their burdens. Non-financial support can come in many forms, including help with budgeting, accompanying them to appointments, helping run errands, providing a meal once a week, cleaning the house, or tending to yard work and minor house repairs. Over time, this type of help may be more beneficial to your loved ones than simply writing a check.
Learn from Your Loved One’s Mistakes
No matter how you decide to help your loved ones in their time of need, do not put their financial needs above your own. Otherwise, you’ll find yourself in the very same position once your retirement rolls around. Continue saving for your retirement and consult a financial advisor for yourself before making any decisions regarding your loved ones. Tap into other resources for your loved ones, including community organizations and other family members, to avoid stretching yourself thin.