4 Tips to Help Your Parents Retire 👨‍👩‍👧‍👦

Have a conversation 🗣

It always starts with an open, transparent conversation about the current status of their savings, finances in general. Understanding their financial status, including their loans, mortgages, investments, will help you set the starting point.

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Supplemental Income 💵

There are multiple sources of potential supplemental income, including property rental, life insurance policy, governmental benefits, or even dividends from stocks. The very important element is also considering Social Security distributions - those benefits are one of the primary sources of income when retired. To get an understanding of what your parents may receive by using the Social Security Administration’s calculator where you’ll need to know your parents’ tax filing status, current income and desired retirement year. Think about potential investment in properties that may bring significant monthly income to the household upon retiring.

401(k) Account 🧾

If your parents have an employer-sponsored 401(k) account, it is one of the easiest ways to save for their financial future. In that scenario, employers automatically deduct a portion of their salary and contribute it towards a savings account. Employers sometimes decide to double the amount by matching your contributions. This option is especially useful for those who struggle to set aside a portion of their income every month towards savings. On top of their 401(k) account, they can also consider opening an IRA where they can contribute additional $6,000 that can grow tax-free, and can be also withdrawn without paying taxes.

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Work out a Family Budget 🏡

Be open about your finances so that your parents can also comfortably talk about their money! Think about your investments, properties, budgets as your family’s financial future. You can use various apps for budgeting, including Mint, EveryDollar, or simply create your own budget book where you collect the income/spending data from your family members.

Make it your own! 💪