It is estimated that in the next decade, one in seven Americans of the so-called “sandwich generation” will have to financially support both minor children and dependents at the same time. And with prices for everything from daycare to adult daycare rising, it could easily be a pinch between two generations. Luckily, you can prepare yourself and your family’s personal finances for the future by taking steps now.
Will your parents rely on you financially in retirement? If you’re not sure, you’re not alone. Most savers think he will only have one retirement fund, not two. A well-thought-out plan is based on a solid understanding of the facts, and frank discussions with parents about their financial situation are an important starting point.
How we spend our days today can foreshadow how we will spend our retirement. If your parents don’t have one, encourage them to do so. If you have a budget, compare how much you are currently spending with what you can expect to earn in retirement. Think of social security benefits and pension payments as retirement income. If your expenses exceed your retirement income sources, a retirement account can be an important supplement.
Next, figure out your parents’ net worth. Consider whether you have assets in your account that will be available to you after you retire and whether those assets are properly invested. Likewise, you need to understand if your parents have a lot of debt that will last them well into retirement. It can become very difficult to meet your monthly living expenses if you don’t balance your ever-increasing debt payments.
2. Anticipate unexpected expenses
When planning your retirement spending, pre-retirement spending is a good place to start. However, there are some important retirement expenses that may not be showing up right now.
Health care costs are a major component of every American’s financial plan. Medicare Part A is free, but most Americans will need additional insurance, which can cost thousands of dollars each year. Moreover, 70% of Americans are expected to receive long-term care after retirement, and the cost of this care, whether out-of-pocket or with long-term care insurance, dazzles seniors. There is a possibility.
3. Don’t be afraid to ask for help
Talking about your financial situation with your loved ones can be difficult, but you don’t have to do it alone. Consulting with a fiduciary financial planner is one of the most helpful ways she can help families plan financially for the future.
Financial planners consider both qualitative and quantitative factors when helping clients plan for retirement, giving retirees and their families confidence in their financial situation. Planners can not only provide an objective opinion in financial conversations, but they can quantify the unknowns and provide actionable recommendations to keep you and your loved ones on track toward financial security. increase.
Understanding your parents’ financial plans now will help you avoid unexpected financial burdens in the future. Start the conversation by looking at concrete data, then consider retirement healthcare costs. Ask for help if you need it. The services of a financial planner can go a long way toward helping you and your parents become financially successful.
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