Retirement is something all people hope to achieve one day. After years of work, being able to relax and take it easy is a well-earned reward. However, retiring isn't always as easy as just deciding to quit work once you get old enough. There are many things one must do before they can retire, so let's look at five tips for helping parents plan for retirement you can use if your own parents are starting to approach that age.
1. Assess Their Assets
Part of retiring is making sure you have enough money saved away to support yourself without a job. That's why assessing your parents' assets with them is a crucial step as retirement age approaches. Things like a 401k are the most obvious. However, this also includes things like cars, houses, jewelry, and anything else that has value. All of these things are part of a happy retirement, so understanding what your parents have and what they may need gives you a clearer picture of the situation.
2. Update Insurance for Retirement
Many Americans have their insurance tied with their employer. As such, they might lose that coverage once they stop working. Prevent this with updated insurance ahead of retirement. This also applies to other types of insurance like car and home, to cover everything. Your parents may also consider purchasing additional insurance for various things, one common option being updated life insurance. If so, it's better to do it now before retirement than to wait until later.
3. Think About Housing
Are your parents planning to continue living in their home after retirement? If not, where are they planning to move? Will they need any modifications for medical reasons? What about a live-in caregiver? People of retirement age frequently have to consider these questions at some point, so do so as early as possible to avoid the stress of making decisions in the moment. Talk over different housing options and what will need to be done to ensure proper happiness and quality of life for whatever choices your parents make on this front.
4. Be Careful of Scams
The cliché of gullible elderly people falling for online scams comes from nowhere. When planning for retirement, help your parents avoid scams so that they don't jeopardize their retirement. This would include things like unnecessary or fake insurance, costly retirement planning "experts", online shopping deals that seem too good to be true, and the classic telemarketing fraud. Teach your parents things like basic computer literacy and online common sense, and let them know to consult you before they make any major financial decisions.
5. Consider Safe Investments
For those worrying about finances, retired parents having a source of income can be a major relief. One way to accomplish this would be to have your parents try some safe investing to earn a little money each month. A CD would be one idea, as they're guaranteed to increase in value so long as the holder waits the required amount of time to withdraw the money. Another would be an annuity provided your parents can remember to save the appropriate amount of money to cover things like taxes. For the more daring, investing in cheaper stocks might also be an idea. Definitely use caution when considering this option.
Prepare for Your Parents’ Retirement!
Everyone hopes their parents will be able to retire in comfort. Indeed, making that dream a reality will require a bit of effort. Help out the people who have helped you all your life with these five tips for preparing for their retirement.