I don’t give a flying nun about inheriting money when my parents eventually buy the farm. As far as I’m concerned, it’s their hard-earned dough and they should use every goddamn penny of it to enjoy their retirement and live comfortably until the day they die. In fact, I truly hope they do!
But one of the greatest gifts they can give me instead is the knowledge that their retirement and passing won’t be a financial burden on me. Knowing that my parents have a solid retirement plan will grant me enormous peace of mind. It will allow me to focus on growing my own wealth so that when I get to the age where I’m allowed to be embarrassingly blunt in public, I won’t be dragging down the finances of my younger relatives.
You don’t want to find yourself financially preparing for your own retirement years only to find without warning that you suddenly have two aging dependents to account for in your annual budget. So take steps now to make sure it doesn’t happen.
You need to know right now
Real quick, if you currently know jack shit about retirement funds, here’s your homework:
- How to Save for Retirement When You Make Less Than $30,000 a Year
- Dafuq Is a Retirement Plan and Why Do You Need One?
- If You Don’t Use Your 401k You’re Losing Money in 3 Different Ways
- Investing Deathmatch: Traditional IRA vs. Roth IRA
Kitty and I have a friend who found out her parents were losing her childhood home only when she found the house listed online as a foreclosure. Another friend of mine has a parent who so badly mismanages her own finances that during his college years she regularly stole money from his bank account to pay her own debts. And yet another friend recently cashed out her 401(k) to buy a house for her family when she learned her own parents had lost theirs, had no retirement savings to speak of, and were literally living out of their car.
The only thing worse than having to take financial responsibility for relatives because they mishandled their own finances is having the whole situation come as a massive surprise.
So schedule some time this week to talk to your parents—or grandparents, aunts, uncles, and siblings… really anyone who might find themselves financially dependent on you in their old age—about their retirement plan. Far from being offended at this abrupt reminder of their approaching decrepitude, they’ll be grateful that you’re thinking of them and that you care enough to be concerned for their future.
I had The Talk with my parents recently, and it was a massive relief for all of us. Far from being cagey or defensive, my dad was actually quite willing to lay out the numbers for me. He’s a disabled veteran with a healthy pension in addition to his retirement plan and savings. And while my mother gave up her career to raise us hellions as a stay at home mom, she has always been militant in keeping the family finances. I got visual proof that my parents have enough money and assets to retire comfortably without my financial contribution.
Which is good news, because when we had The Talk with my husband’s parents, the outlook was a little bleak. I’ll spare you the gory details. But now we know, while they’re still active in the workforce, that we need to prepare to take at least partial financial responsibility for them in their retirement. While it could certainly be a burden for us, having the time to plan for it will make it overall less burdensome.
Where there’s a will, there’s a way
Once you get through the retirement plan conversation with your old folks, move on to an equally pressing but possibly more uncomfortable topic: their will. Most of us don’t realize that a will is not simply a list of who gets what when we shuffle off this mortal coil.
A will contains very important legal information like who gets to make decisions about your medical care and financial affairs in the event that you’re incapacitated due to injury or illness. And while that’s a more likely contingency in your twilight years, it’s never too early to make these arrangements. Kitty and I have a friend who, in his mid-20s, found himself legally powerless to make decisions for his unconscious fiancée while she fought for her life in the ICU (get your fucking flu shot, people).
Your aging relatives need to update their wills now, today, to arrange for such drastic emergencies while they’re still hale and hearty. Because by the time they’re hospitalized with pneumonia, it’ll be too late. And then you, their next of kin, will be dealing with a legal nightmare on top of worrying about your loved one.
Starting the conversation
If you’re worried that starting such a heavy conversation will be mortifying, here’s a short script to help. Just say:
“Hey mom and dad. I’ve been reading a lot about personal finance recently, and it’s got me thinking about our family’s future. I want to make sure you guys have everything you need to enjoy a long and comfortable retirement. Let’s schedule a time this week when the three of us can talk about your retirement plan and go over some details. This way when the time comes I’ll be prepared and none of us will need to stress out about it.”
They’ll be touched by your thoughtfulness, impressed by your adultiness, and overall ecstatic that you want to spend time with them. And if they’re not all of those things, then you’ll know you have every reason to dig deeper.