Helping the elderly enjoy their retirement
Knowing what income they may need is critical
Baby boomers set to retire during the pandemic may be facing multiple challenges, not least because of the challenging financial scenarios of late.
Members of the younger generation are stepping up to support their parents to retire well.
The answer is not to tell your parents what to do with their savings and income. Rather focus on helping them understand the potential consequences of the decisions they may make.
It is crucial to understand what income they require. The conversation turns into one about their expenses, spending and assets.
Here are some tips on how the younger generation can help their parents plan their retirement:
Get them good financial advice
A financial planner can help them identify post-retirement savings products that are best suited to their needs. It is vital to form a good relationship with a financial planner who understands their needs to suggest a more robust and realistic approach. Attending these meetings with your parents allows you to bring another perspective as someone who knows them.
Empower your parents
The focus should be on supporting your parents to take control of their own finances, not for you to step in and take over.
Remember that your parents have had decades of experience managing their own finances – the last thing you want is for them to feel disempowered at this next stage of their lives.
A financial planner can help them create a plan that is realistic and that they are comfortable committing to. For this to happen, there needs to be personal accountability to make it work.
Healthcare in retirement
Healthcare costs can be significant in retirement and are often unplanned. Statistics of a profile of older persons in SA show that 38% of South Africans over the age of 60 use chronic medication.
If these costs are not entirely covered by medical aid, or there is no medical aid, you may need to step in. This is especially true in the case of retirees who live off a fixed income and do not have emergency savings.
Your parents will need to understand the various medical aid options so that they can budget appropriately.
Easing into the next chapter
Some retirees find it easy to settle into a new routine, but others may find it harder. Help your parents ease into their new lifestyle by guiding them to find new hobbies or asking for their help with things that are within their ability and reach. But be careful not to overdo it, you need to be mindful that they may need a break after a long working career.
Focus should be on helping your parents to take control of their finances