Money & Life: Helping Your Parent Retire

Money and Life, Helping Your Parent Retire, Personal Finance Podcast




Hi Everyone and welcome to Episode 6 of Money & Life. I am your host Angel Melgoza. There’s been a long wait between my last episode and this one. 2 ½ months to be exact. Those that follow me know the reason why and those who are starting to listen to Money & Life, I’ll share the good news. I am a first time father of a beautiful baby girl. She is now 2 ½ months and is starting to let me and her Mom sleep. So where is she right now? She is currently with her Grandma. Shout out to Grandma Myrna for giving me some free time to talk into this microphone and record this episode for your listening pleasure.

Real quick, for those of you that have followed my show, I am happy to announce that I will be “TRYING” to shorten the length of the show by monologuing about topics in Personal Finance vs. Interviewing someone. I wanted to make the most out of my time and yours by recording to the length of a 15-20 minute drive. Besides, I also have an Infant that ALWAYS wants my attention so you can see I’ll have time constraints.

Moving on to this week’s topic, HELPING YOUR PARENT RETIRE. This is a very near and dear topic to me being that I am not too far removed from helping my own Mom open up and talk about the future. I have to say, I had more mental hurdles talking to my Mom about retirement vs. talking to a client of mine because you spend most of your life listening to a parent give you advice and talk to you about the next stages of your life that it is a bit odd when the Role is reversed.

How to get the conversation started?

As a general rule, I personally don’t like to have talks about money with my friends and family at their home. It will always be having coffee, a beer, or sharing a meal. In my Mother’s case, we were at one of our favorite breakfast spots in Pharr sharing a meal and a cup of coffee. I remember taking a sip of coffee before I just asked, “ Hey Mom have you given any thought to what you’ll do after working at Wal-Mart?” Her answer didn’t surprise me. Like any work-a-holic she says to me, “ I didn’t think I would have to stop working.” And while there is truth to that, No one HAS to stop working of course, that triggered my next thought

What do you think of when I say retirement?

For those of you wanting to help your parents, This is where your parent can give you a better understanding of where they see themselves in the next 10-20-30 years. Before even discussing anything related to money, savings, income, expenses, etc…, it’s good to know what “Retirement” means to them. It could be the traditional, “quit, ride off into the sunset,” deal or it could be working a different job or even working the same job. Some parents honestly haven’t thought about retirement because they may think they “HAVE TO” work because they may have little to no savings. Or in reality, it could just be plain fear of getting older or feeling irrelevant.

I find that everyone has a unique set of reasons of why they fail to plan for retirement and sometimes parents just don’t know who to confide in.

After finding out what vision of retirement they have, the next step is gathering the financial stuff.

What do you have coming to you and what do you owe?

So once you establish an open line of communication with a parent about how they feel about retirement and what their vision of retirement looks like, the next step is inventorying all savings, pensions, and possible future incomes. Your parents may have job hopped a few times like we all do so a good place to look at for unclaimed property is your state’s unclaimed property website. If you enter your parent’s information it should return results of any unclaimed moneys owed to them.

While talking to my Mom about the possibility of retiring one of the first things she brought up was her mortgage. And that question is huge among pre-retirees.

What about debt obligations?

Even though many people don’t want to retire with debt and that is a good goal to have, it may be inevitable. Remember, retiring doesn’t mean to stop working. It could mean to quit one job and start another. It could mean to open up a business of your own. Many people don’t think about retirement because they owe a mortgage payment or a personal loan they may have taken out for a major purchase. The reality is your Mom & Dad may be able to afford their retirement vision with some modifications.

Which leads me to my next point.

Help your parent set realistic expectations.

If your Mom & Dad owe a mortgage or took on high debt, be realistic about any major transition. They may have to work a little longer and put off retirement. They may have to tighten the belt on excessive expenditures to save a little more. And even if they have a little bit saved, they parent may have to tone down the expectations of travel. Whatever the case may be, be the voice of reasoning for your parents because a major life decision like retirement is full of emotions for anyone having to make it.

Now moving on to some miscellaneous items of importance that are sometimes overlooked by many but shouldn’t be... Insurance and Estate Planning

Review your parent’s insurance needs.

One of the biggest areas of concern for pre-retirees is health insurance. 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. So before leaving their employer, check if your parents’ employer extends insurance for retirees or if they have to shop for a private policy. Check when they will qualify for programs like Medicare, TRS Care, or TRICARE. And Review their life insurance policies to see if they still need them or if they can be converted into something else. One commonly overlooked insurance is Long-term care insurance. Most people don’t have long-term care, but statistically speaking, at least one spouse will need it. Do your research, talk to an insurance agent and see what the cost of these kinds policies equate to. They may end up saving you money in the long run by not having to overly contribute to a parent’s long-term care.

And of course, the retirement talk could not be complete without having a conversation about potentially dying. Yikes!

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 starts becoming more relevant. 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, it may be that their estate is not valued millions and millions of dollars, but to assume that “everyone will get along” and divide things amongst themselves is a naïve way of thinking. Life has changed since they started their careers, families have grown, and relationships with your parents have changed as well. It’s important they have an estate plan that not only addresses how things get distributed but also addresses who makes decisions for them in the event they can’t do it for themselves.

My tip, visit with an attorney who practices estate planning to address this part of retiring.

Work with a financial professional.

So I’m coming to the end of my show and it wouldn’t be complete if I didn’t advocate for financial professionals. At the end of the day Googling and online calculators will only get you so far. Visit with a financial professional once you and your parents hit a point where you become unsure of what’s next.

With that, this is Angel Melgoza you friendly, neighborhood financial planner signing off! I hope this short episode has been insightful and useful to those wanting to help a parent retire.


MyLife Financial is a fee-only, virtual financial advisor providing objective and independent advice. 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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