Like so much else in life, a successful retirement takes years of planning and preparation. However, there are still many people nearing retirement age who have yet to completely think through everything it takes to live their later years comfortably and financially secure.
Are your parents in this category? At J.G. Wentworth we hear from thousands of folks around the country approaching retirement age, whose financial plans are not entirely secure. If you are at all concerned that your parents may be in this situation, we would like to offer you seven tips to help them plan for their retirement, starting with what may be the most essential one of all:
1) Have a conversation with your parents about their retirement plans
We know this is much easier said than done, and that asking your parents – who, after all, have most likely been the responsible figures in your life since the day you were born – to discuss their finances with you is a difficult topic indeed. However, it is also an essential first step towards making sure both they and you are protected going forward.
2) Review their paperwork and retirement-related documentation
A second crucial step in helping your parents plan for their retirement is to make sure all their documents and paperwork are in order – meaning that they are all easily accessible, clearly expressed, and legally valid.
3) Consider setting your parents up with a financial planner
A certified financial planner that charges an hourly or one-session fee is a great way for your parents to review their financial information with an objective expert in the field. You may also want to attend this session and hear the financial planners’ advice and recommendations.
4) Make sure your parents live in a home that is “financially secure”
By a “financially secure” home, we mean that either 1) the mortgage payments on your parents’ residence are being steadily met and they are in no danger of foreclosure; or 2) that your parents’ rent payments are safely within their budget and that they face no danger of being evicted.
5) Make sure they are not falling victim to any financial scams
Sadly, the elderly are the most likely to be victimized by fraudsters, con artists, or even have their investments that may not be in their best interests. Be extremely diligent regarding questionable investments and/or reverse mortgage schemes that may do more harm than good.
6) If they are in credit card debt, devise a plan to get them out of it
J.G. Wentworth has written blog posts offering suggestions on how to reduce credit card debt, and there are numerous other online resources available that could help your parents reduce their credit card debt steadily and effectively.
7) Know your own limitations when it comes to providing parental support
Last, but certainly not least, is a piece of advice directly for you, the child: know your own limitations. Sometimes there is only so much you can do – financially or personally – to help your parents make it through their retirement years successfully. We strongly recommend that you do not empty your own hard-earned savings accounts, or exhaust any of your other emotional or personal resources, in ways that go beyond what you are capable of. In the end, this will not only harm your own life, but could mar the remaining years you have with your parents as well.
We hope the above tips have given you some thoughtful suggestions on how to best help your parents prepare for their retirement. It is just one of an entire series of blog posts we call Money Smarts designed to help our customers make the best financial choices they can. Please also know, as always, that if you or your parents are considering selling your structured settlement or annuity payments to help pay for retirement expenses, you can call J.G. Wentworth anytime at 877-227-4713.
Nothing above is meant to provide financial advice. You should meet with appropriate professionals for such services.