How you can help your parents prepare for retirement
People often think that when you get to retirement age, all you have to look forward to is filling up your days with activities now you are no longer at work. Sadly, this isn’t always the case as many people are working until later in life, and the onset of age-related health conditions or illnesses can put a spanner in any plans they might have.
Sometimes, as your parents age, they may need a little bit more help to navigate life and finances. This is where you can make sure everything is as it should be and your now elderly parents aren’t worrying needlessly about money or how they will manage after retirement. While many people are prepared to step in financially to help their retirement age parents should they need to, not everyone is in that position, unfortunately.
If you are worried about how your parents will cope when living on a pension, it is best to sit them down and have a frank conversation with them to get everything out into the open.
So how can you make sure your retirement age parents or relatives can adjust their life as they plan out their days once they are no longer part of the workforce.
In many cases, those looking at retiring in the near future will have paid off their mortgage(s) and will be able to live comfortably without the worry of this payment looming over them. If your parents are worried about their income and financial affairs after retirement, it may be worth looking into options such as selling up and downsizing to release money tied up in the house or looking at equity release options. Think Plutus can offer expert advice on how to release a home’s equity while you are still living there.
If your parents still have a mortgage left to pay, consider overpaying to clear the balance faster and allow themselves more financial freedom after retirement.
If your parents rent their home, they may need assistance when it comes to rental payments. There are many options available to them, such as checking which benefits they would be entitled to claim, moving to a smaller house with lower rental prices or moving in with family to eliminate this cost if possible. Charities such as Age UK can offer impartial and practical advice too should your parents be worried about what will happen when they retire.
Get Finances in Order
This means making sure you know exactly what pension amounts they are entitled to and how to claim them. Many more people are now relying on state pensions to help them when they retire. But with the retirement age now rising, it may be that you need to put any pension planning on hold until this threshold is reached. In many cases, people choose to work on after retirement age as a buffer to help them prepare financially once they can no longer work. This could be on their regular hours or a reduced contract. There is no rule that says you have to stop working at retirement age. Merely that you can should you wish.
Work with your parents to figure out what income will be coming and how they will live once they are relying on your pension. It may be helpful to look at paying off debts. Use any savings if they have them, especially if they will need to dip into savings to top up living expenses. Apply for any senior discounts on things such as utility bills, and look at reducing outgoings to help them prepare for a drop in income if this is inevitable.
Make sure your parents are paying as little as possible on things such as car insurance, household bills, home insurance etc.
Make the switch now to get everything in order whilst they are still in a position to benefit from the extra income.
Any savings can then be put towards retirement funds, paying off debts or buying items they may not be able to afford to when their income changes.
Build A Support Network
Retirement age can be a lonely time, especially for those used to working every day. It is a big adjustment to make going from being around people all the time to not seeing others for days. Having a support network in place is vital to help your older parents remain active and healthy. Look at local clubs, support groups, coffee morning or charitable events they can get involved in. Social interaction, as you get older, becomes more and more critical.
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