7 Things You Should Do When Your Parents Haven't Saved for Their Retirement
If you were one of the lucky ones, your parent or parents had you covered financially when you were a kid—from diapers to braces. Maybe you even grew up without a doubt in your mind that your parents had their own finances figured out. And maybe you were wrong.
According to a survey conducted by Finance Buzz, as many as 35 percent of people report having no money set aside for their retirement. And in the end, it looks like those folks' kids are left with the responsibility. According to AARP, as many as 32 percent of midlife adults (ages 40–64) provided regular financial support to their aging parents.
While discovering that your parents haven't saved for their golden years is no easy pill to swallow, the fact is, what's done is done. There's no way to rewind the clock, and the only thing everyone can do is keep moving forward. But while that lack of retirement savings may seem insurmountable, it's not; Ramit Sethi, author of I Will Teach You To Be Rich and host of the podcast with the same name, says that while it may get more difficult as your parents' age, it's never too late to help them save for their retirement.
The key is finding a way to help your parents in ways that you can—without putting your own financial future at risk.
Why do people skip saving for retirement?
Retirement probably ranks high on everyone's list of life dreams. So it can be a bit puzzling to find that so many people (perhaps your parents as well) don't save for this stage of their life. Sethi notes that "most people don't start saving early because there are no real consequences for not saving today."
He goes on to say that most people feel overwhelmed and confused by retirement planning, so they put it off, and at a certain age, somewhere around 40 or 50, they think it's too late.
And finally, Sethi notes that for the average person, the money mindset is one of restriction. And when finances are approached from a sense of restriction, it stands to reason that the individual won't want to engage. Fast-forward a few years, and they'll likely find themselves staring down the barrel of retirement with little to no funds set aside to make it through.
So if you find your aging parents haven't saved for retirement, here are seven actionable steps you can take with them, immediately.
If you find that your parents haven't saved for retirement, rest assured that there are things you can do to help them get back on track. Your first step is a frank conversation—and only from there can you create a plan that helps everyone move forward.