Things To Do Before Your Parent Retires

retirement planning, retired parent


That beautiful lady pictured up top is my Mother. She has done so much for me and has helped shape me into the man I am today that I couldn't wait to help her as soon as I possibly could. I am sure a lot of us feel the same about our parents. See, many of my Gen X and Gen Y friends are starting to find themselves in a peculiar situation. Your parents, if not one maybe both, are starting to see the light at the end of the tunnel of their careers. The culmination of their working lives is leading up to the transition we call retirement. It is easy to get caught up in the transition of our own lives like having a family, buying our first house, and saving for our own retirement that we may forget about our parents’ life transitions.

Sure, they may have been saving in a 401(k), 403(b), or some other sort of retirement account. Sure, they may even have a financial adviser they work with and say “I let him or her worry about that kind of stuff.” But let us be realistic for a bit. Having a family, buying your first house, and even making the decision of where to put your money for retirement probably conjured up some feelings of anxiety. Some of you even went on to speak to your parents for reassurance that “everything was going to be alright.” Unfortunately, not all our parents have the luxury of speaking to their own parents about this transition and while a financial planner like myself is useful, nothing beats the support of family.

I started having this conversation with my mother shortly after I took a class in Retirement Planning in 2010, but not everyone is formally educated in the subject matter. So where do you start?

Have the “retirement talk”

I remember initiating the conversation with my mother. We had finished our breakfast at Fernando’s Mexican Restaurant in Pharr and were having our morning coffee. It was a little strange at first because frankly she had never thought entirely about it. And many parents don’t like to think about it. For whatever reason, fear of being ill prepared, fear of getting older, or just honestly not thinking about it.

Before starting this conversation, it’s important to try to put yourself in your parents’ shoes. Keep in mind that 20-30 plus years of work are coming to an end. Many are empty nesters, some may still have a mortgage, and the thought of losing one’s working identity could be a factor in this conversation. Sometimes by simply asking an open-ended question like “what do you have planned after working at XYZ?” can help kick start the conversation. It’s important to listen and take in what they are saying. Don’t judge or give your take, just listen.

Inventory all savings accounts

After having the retirement conversation with your parents, inventory all accounts such as checking accounts, savings accounts, money market accounts, CDs, and employer retirement accounts. Some of our parents may have held multiple jobs in their lifetime, in different parts of the country, and may have savings accounts scattered with different financial institutions. It’s important to inventory these accounts and consider consolidating to one or two financial institutions to simplify the management of your parents’ money. If you are ever elected to be their power-of-attorney, believe me, it’s much easier to submit a document to one or two financial institutions vs. five.

Inventory all debt and obligations

While you inventory all the assets accumulated by your parents, inventory all debt & personal obligations as well. Know what debts will be paid before retiring and consider the debt being carried into retirement. Be conscious of obligations they’ve set for themselves such as helping you or your siblings with wedding cost, paying off debt, and helping with a new house. I know some parents may want to put off retirement savings to pay off their mortgage, pay for a wedding or payoff their kids’ student loans because they feel obliged, but is that really the best move? Maybe it is, maybe it’s not. In any case, it’s good to know what debts your parents have outstanding or the obligations they’ve set for themselves to be able to assist them in making those tough decisions. Typically, these decisions are made in an emotional vacuum which can make the difference of how successful their retirement will be.

Set realistic expectations

It is important to listen to your parents and know what’s important to them. Setting realistic expectations does not equate to being a pessimist. If they’ve always wanted to travel, see what that looks like. If they feel like they’re going to work until their last breath, see why they think that. If they want to retire early, don’t be afraid to ask why. Challenging their expectations of retirement is not a bad thing. It helps them not only think about why they envision retirement as such, but also how they can achieve these things.

Review insurance needs

Let’s face it. As we get old our bodies break down. I know it and those who have crossed 30 know it too. Imagine being your parents’ age. Before leaving their employer, see if your parents’ employer extends insurance for retirees or if they must shop for an independent policy. See if they qualify for Medicare, TRS Care, or TRICARE. Check and see if they still need that life insurance policy or if it can be converted to something else. Most people don’t have long-term care, but statistically speaking, at least one spouse will need it. Do your research and see what the cost of these policies equate to.

Make sure there is an estate plan

That’s right. As if it wasn’t hard enough to talk about getting older, the dreaded conversation about death comes in. It’s important to have an estate plan at this point in their lives because it’s likely your parents have accumulated some assets like a house or houses, vehicles, retirement accounts, family heirlooms, etc. Sure, the estate may not be valued millions of dollars, but to assume that “everyone gets along” and will divide it amongst themselves is a naïve way of thinking. Life has changed since they started their careers, family has grown, and relationships with your parents have changed as well. It’s important to have an estate plan that not only addresses how things get distributed but also addresses who makes decisions for your parents in the event they cannot do it for themselves. My tip, visit with an attorney who practices estate planning to address this part of retiring.

At the very least, if any of this is confusing, hire professional help. Retirement is a transition in life that cannot be avoided, regardless of what it looks like to each individual. Want to start a conversation and see how I can help?


MyLife Financial is a fee-only financial advisory firm providing objective and independent advice virtually. Our clients are busy professionals that face daunting questions of how today's financial decisions will affect their long-term financial success. Everything written is strictly for informational use only. Please seek the advice of your CPA, Attorney, or financial professional before implementing any strategies.

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