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With more and more Boomers retiring, their Gen X and Millennial children are learning just how hard it can be to help their aging parents when they’re ready to retire or become unable to work. This growing responsibility can take a serious toll on their financial well-being. One individual we’ll call Jack is learning this firsthand with his mother, Sarah.
Sarah’s Situation
Jack is trying to ensure that Sarah can retire peacefully and make the money she does have work for her. When Sarah’s husband died, she received close to $80K that she put into a certificate of deposit or a CD, despite Jack telling her to put it in a savings account. She also has around $3K in a 401K and a pension she claims will net her about $200, but Jack doesn’t say whether that’s monthly or total.
He also said that they plan to sell four cars and an RV and then purchase a nice, used Honda CR-V for Sarah to drive. He mentioned his father owed about $7K in personal obligations and that Sarah doesn’t have any debt, but laments that he has to help her pay her house bills every month because she doesn’t have enough liquid assets to meet her needs.
Helping Handout
Knowing how to help older adults, especially parents, as they begin to retire can be challenging. Despite their age, parents don’t like their adult children telling them what to do. It is equally frustrating for the children to watch their parents struggle financially, especially if their money could do more for them, given different circumstances. Jack got lots of advice on how to help Sarah navigate her financial issues.
1. In the Black
The first step to helping your soon-to-retire parent is getting them financially solvent. This circumstance will look different for every person, but ensuring your loved one can cover their basic needs and bills is crucial before retirement is possible.
2. Picture Perfect
Another great piece of advice came from someone who told Jack that he can’t help Sarah if she’s hiding information. Knowing precisely what her pension is, how much she has coming in every month, and where her money is going are all discussions he’ll need to have to properly help Sarah prepare to be on her own without that steady income from working.
3. Low-Income Housing
Although it may be painful at first, one great option for Sarah is to sell her home and rent a low-income apartment. Section 8 housing in many states offers women Sarah’s age nice housing for very cheap, and selling her home would give her a nice nest egg to work with for the long term.
4. Social Security
At 60, Sarah can apply for Social Security survivor’s benefits and collect the Social Security that would have gone to her husband. One user suggested she create a free account with the Social Security Administration to see her benefit amount. This boost in monthly income could help Sarah be able to retire earlier.
5. Roommate
One fantastic suggestion came from a commenter who suggested that if Sarah can’t bring herself to sell the home and rent an apartment, she could rent a room, split the utilities with a roommate, and work out a fair and reasonable rental rate.
6. Disrepair
While Sarah may hate the notion, one contributor made a good point that without a better-paying job, Sarah won’t be able to manage home repairs that will arise and can cost considerable amounts of money. She’s much better off selling the home than losing its value if it becomes dilapidated.
7. Worker’s Compensation
Jack mentioned that his father passed away from an accident, and one respondent noted that if the accident were work-related, his mother would be entitled to a settlement from Worker’s Compensation, the insurance that businesses must carry to cover workers who get hurt on the job.
Other Issues
Not only is Jack fighting his mother on the amount of her pension, one has to wonder how you work for the same company for 19 years and still make minimum wage. Jack may also need to seek therapy for Sarah as her routine sounds very much like she is depressed and could use an outsider to talk with. Grief is complicated, especially concerning the loss of a spouse, and Sarah still has plenty of life ahead of her. Hopefully, Jack will be able to help Sarah despite her financial issues.
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