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How to Help Your Parents Be Financially Ready for Retirement?

Getting old may not be everyones favorite thing. It involves experiencing changes in the mind and body that are completely natural. Health..

By Ritesh Kukreja Updated on September 29, 2023 • 14 min read
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Ageing can be both an exciting and challenging point in a person's life. This means having to retire and finally being able to enjoy the fruits of many years of labor. However, it involves other important matters as well—such as being financially secure. Getting old may not be everyone's favorite thing. It involves experiencing changes in the mind and body that are completely natural. Health deterioration is, unfortunately, a part of every human being's life. This is why seniors are mostly the ones living with medical conditions or are more prone to having physical disabilities. With that said, elderly people should know and be prepared in addressing their medical needs.Retirement is a wonderful thing. This is the part where adults can focus on themselves and enjoy the remaining years they have. But they can only do that if they can guarantee their health and comfort, thanks to the money they've saved up and invested. In this blog post, readers can learn how to help their parents be financially ready before retirement. 

Why is preparing for retirement important? 

Having a well-thought retirement plan will allow an individual to enjoy the kind of lifestyle he/she is envisioning for themselves. This means being financially ready and having invested in things that would come useful in the future. For seniors, this is extremely important since they will no longer have jobs that are their main sources of income. Not to mention, some ageing adults cannot rely on their children for long-term financial support. Seniors have varying needs, most of which are centered on their personal and health care needs. There are plenty of senior care options institutionalized by the government and private sectors, but they cost a fortune. Being financially stable will enable seniors to gain access to senior care services that they need to enjoy a better quality of life. 

How to prepare for your parents' insurance and medical expenses 

Financial planning does not have to be overly complicated. It only takes certain qualities such as common sense, commitment, and consistency for it to be smooth and successful. Not all people are blessed with the proper way of handling money, but there's always room for learning. Even adults who were never good at managing their finances can still learn before they retire. However, some ageing adults do not have the time or energy to take care of their future needs. This is where their children step up and take the reins. Those with parents or family members who are on the verge of retirement should help in their financial planning. This way, they will be properly guided on what to do for the sake of their health and security.Listed below are the salient points to remember in being financially ready for retirement: 

  1. Discuss with the parents

Planning usually starts with a proper conversation. The children must engage their parents in a discussion to know about their medical conditions and whether or not they have any existing insurance policies already. This will also be a good way to assess how the parents are managing their finances. Letting it all out in the open will allow the ageing parents and their children to decide on how to go about their financial planning. However, it is not always easy to discuss financial matters with parents. Some adults refuse to partake in the subject matter due to reasons such as not wanting to burden their children with their problems or wanting to handle things on their own out of pride. However, when a son or daughter takes notice of their parents' ageing hindering them from having a good life, it is time to take matters into their own hands. Unfortunately, many Americans are not financially prepared for retirement. This was proven by the Federal Reserve's report showcasing that only 36% of non-retired adults have prepared for their retirement savings. In fact, this article revealed that most working Americans over the age of 40 do not have enough savings for when they retire. This shows how financially incapacitated some adults are—further establishing the reason as to why having a proper discussion about financial management is of utter importance. 

  1. Consider getting a life insurance

Although this might not be an easy topic for everyone, it is important to keep an open mind that any unwanted incident might take place at any time. People need to accept the possibility that they can become sick or get into an accident in the future. This is not about having a negative perspective towards life but being prepared for what's about to come instead. It's better to be ready now instead of worrying later when the damage is done. Having a life insurance policy will guarantee the financial security of the policy holder's loved ones as you go. This will be the money that can be used to pay for funeral arrangements as well as compensations for the chosen beneficiaries. Life insurance may also cover the unpaid obligations and other settlement costs of the policy-holder. With this, ageing adults can go on with their life without any worries for the future. This will protect not just them but also the family members that they may possibly leave behind. Remember, you can always capture the cash value in your life insurance by selling your policy for a cash payout.It is essential to remember that getting life insurance requires proper research and conversing with a reliable agent. There are plenty of life insurance companies in the US that offer ideal policies for adults. Both the parents and the children should assess each one thoroughly, compare the pros and cons of each, before coming to a final decision on where they can benefit the most. 

  1. Consider getting a health care insurance 

Ageing can be a complicated process in terms of health. As a person grows older, the body naturally becomes weaker compared to when it was younger. This is why many members of the elderly community are more prone to developing ailments or complicated medical conditions. This intensifies their need for proper care, support, and assistance for them to live their lives as normally as they could. Unfortunately, medical care services can be quite expensive. Seniors with health issues are required to attend medical appointments and receive treatments from their respective doctors. Furthermore, purchasing medications to treat diseases or even for just health maintenance can be costly. If health is left unmanaged, it can lead to further complications that will prevent an individual from experiencing a good quality of life. This is where health care insurance comes in. This is an insurance policy that can cover all the medical-related expenses of an individual. This includes outpatient clinic check-ups, selective laboratory tests, treatments, etc. By having health insurance, seniors will no longer feel too worried about spending for their medical needs. This will also lessen the load on the shoulders of the family members who are financially supporting them. Some seniors refuse to seek proper medical care due to their fear of excessive spending—so with the right health care insurance plan, an ageing adult can get the medical care services whenever needed. Remember, ignoring the gravity of addressing health conditions may lead to further complications which will ultimately end up in more expensive hospital fees. 

  1. Evaluate care options and their costs 

One way or another, an ageing adult will have to consider the possibility of seeking senior care services. This is especially the case when an elderly is living with a medical condition or disability that prevents them from living comfortably. There are plenty of services that are centered on senior care and support. Some primary examples would be nursing homes, assisted living facilities, independent living facilities, and in-home care. The aforementioned elderly care services are directed toward improving the overall well-being of seniors. There is a variety of services being provided such as personal care, complex nursing procedures, medical care, social activities, and many more. All these are meant to help seniors experience a better quality of life—especially if they are living away from their loved ones. Assessing the possible care options and knowing their costs will help prepare an adult financially. They can decide which services they will be needing and set their expectations on how much they will be spending on it. Planning ahead for senior care will give them better chances of choosing the right care option for themselves. This is also to avoid availing of care services that are unnecessary. In line with this, there are senior care facilities that offer a care consultant that will help clients formulate the care plan that's best for them. 

  1. Consult a financial advisor (if necessary)

Managing one's finances can be quite overwhelming, especially if the individual has a spontaneous type of personality. Financial planning requires one to think strategically for them to organize their budget according to their varying needs and responsibilities. For those who find financial planning too tedious or complicated, they can turn to the guidance of a financial advisor. Consulting an FA will enable a person to have a clearer picture of their goals and what they have to do there is certainly to achieve it. They will be the ones to assess the current financial situation of their clients and assist them in building a plan that will help them reach their objectives. They can provide objective tips, how-to's, and recommendations that will be beneficial for their client's finances. However, it is important to remember to choose a trusted and reliable FA. Seek the services of one who truly cares about his/her client's needs, not just one who seeks to gain profit from them. A good FA is someone who can carefully evaluate his/her client's financial status and strategically formulate the right financial plan for them. 

  1. Consider financial assistance schemes and subsidies

Seniors who come from low-income households may not have the luxury to spend on senior care or other services that will address their varying needs. This is especially the case for the elderly who are no longer being supported by any of their family members. However, their situation will not hinder them from receiving the right care and support that they need as they live their remaining years. The government and various private sectors made it possible to extend financial help to seniors. There is a vast selection of financial assistance schemes that covers health care, housing, and many more—all of which are essential in an elderly person's way of living. However, there are certain qualifications and requirements that a senior must meet for them to apply and be approved of the financial schemes. As for old folks' homes such as nursing homes and assisted living facilities, they also offer in-house financial assistance for seniors who are financially incapacitated. 

  1. Consistently manage the budget 

Being financially prepared for retirement can be done in a simple manner—such as knowing how to budget. Budgeting is one good way to easily monitor the inflow and outflow of income in a household. Monitoring the movement of funds will help an individual easily decipher where their money is going, instead of just buying impulsively without keeping track. This can be done in many ways. A person may do it the old-school way by keeping a logbook where they can write and organize their weekly/monthly budget. Others do it digitally by creating a spreadsheet on their computer or making use of the financial management apps that were developed today. Any method can be useful as long as it suits the personality or taste of the subject. Another way to organize a budget is by separating personal savings and the money being used to pay for dues in different bank accounts. Disseminating the income firsthand will eliminate the confusion in monitoring the movement of money. The savings can be left untouched while the other bank account can be dedicated for any outflow of cash such as paying for bills, insurance, and other expenses. 

Benefits of financial planning for retirement 

There are many advantages to being financially prepared for retirement. It may benefit several aspects of an individual ranging from financial, to personal, and even to psychological. Here are the following benefits that one can get from being financially prepared before the point of retirement: 

Having peace of mind 

There's no uncertainty as to what could happen in a person's life. But when one is financially prepared, it is certain that there is nothing to worry about. Being financially secure will guarantee that whatever happens, there is a source of income that a person can turn to. There's no need to feel stressed or anxious about the cloud of possibilities. People who have saved enough money and invested in the right things can sleep comfortably every night. 

Retirement is more exciting, less intimidating

For some, retirement is a good thing because it's a new chapter of life that they can enjoy. Others, however, don't outof fear of losing a reliable source of income. There's also the fear of being a burden on their children or family members because they can no longer financially support themselves. But if they are financially secured, there's no reason to fear the idea of retirement. An ageing adult can freely enjoy the fruits of his/her labor by starting a new business, traveling around the world, or spending a fortune on their grandchildren. They can spend their remaining years with smiles on their faces instead of creases on their foreheads. 

Less stress due to fewer costs 

Having planned out finances before retirement will lessen the load on an individual's wallet. Heavy expenses such as medical care and senior care are no longer burdensome for a senior who invested in an insurance policy as well as applied for financial assistance schemes. Having built a strategic financial plan will cover the more expensive costs that are required to obtain a better quality of life. With fewer costs comes less stress, therefore, the retiree can maintain better health. 

Can make better financial-related decisions

Being financially responsible from the very beginning will already teach an individual the art of making good financial-related decisions in the future. For instance, if a retiree ever does consider investing in a business, they will know the factors to consider. Whatever money-related venture that they decide to engage in along the way, they can be able to make sound decisions instead of being just impulsive and relying on pure intuition. Just because they have retired does not mean they can be rash about their finances. 
Categorized into General Health
Tagged in Health and Safety,Rash
Ritesh Kukreja

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Ritesh Kukreja

Health & Food Blogger

GenderMale
CountryIndia
JoinedJul 2021
Wrote163 posts

Ritesh Kukreja, a medical writer, collaborates with health researchers, physicians, and other healthcare experts to create health blogs and online medical content for instructional and informational purposes.View Profile

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