How to have the ‘retirement talk’ with your parents

Talking about finances with family can be tricky at the best of times, and the stress and uncertainty for both you and your parents’ retirement situation can quickly turn an awkward conversation into a confrontational one that doesn’t benefit anyone. 

Being worried about your parents not having enough for their golden years

Whether you know that your parents haven’t saved enough for retirement, or they won’t be able to if they continue their current ways, or you suspect they will run into money problems, it’s not an easy subject to tackle, and accepting the reality and what that means for you can be unnerving. 

Having the conversation sooner is better
 
If you’re worried about your parents’ retirement, it’s probably because the responsibility of supporting them financially will fall on you. The best way to deal with the situation is to know what you’re in for so that you can prepare for it and protect your own financial future. 

Having the conversation earlier puts you in a position to best help your parents; perhaps they can fix their lack of saving, or you can get them on the right path? It’s also possible that they have their finances figured out, but you won’t know until you ask. 

Approaching the topic
The key to managing a difficult conversation lies in being prepared, open, non-judgemental and aware of your tone. 

It’s likely that your parents could be defensive or uncomfortable about explaining their finances to their children, so trying to understand them and their situation and positioning it from a perspective of love and kindness are crucial to having a productive conversation and getting a clear picture. 

1.    It’s about them and their best interests
Choose a time and place where you and your folks feel at ease and comfortable This could be at home, on a walk or at a restaurant. Be open about your intentions, telling them you want to talk to them about something important that is concerning you.

2.    What are their expectations?
Frame the conversation that you want to understand their wishes for their future. What do they want out of their golden years, and how do they see things going?

The goal is to not only understand the situation but for your parents to understand that this is a shared experience, and you want to ensure that everyone is financially safe. 

3.    Get the whole picture 
It’s not just about the nature of the situation but the extent of it. You need to figure out the following:
What is their current income, and what could their monthly retirement income look like?

• Do they have assets?
• What debt do they have?
• Do they have sources of income for their retirement, e.g. pension funds, a retirement annuity or savings? 
• Do they have medical aid?
• Do they have a Will, and have they done any estate planning?

4.    Ask whether they need you to help
If there’s an expectation or need for you to assist financially, it’s your responsibility to let them know whether you can and how much help you can give. Be realistic because you still need to take care of your own financial health and protect your ability to save for retirement. 

5.    Let a professional have a look at the numbers
Get advice and guidance from a financial advisor so you can determine what their options are and what assistance you can provide. A professional might be able to provide you with opportunities to stretch their resources, get them back on track and help create a plan that helps everyone move forward. 

Speak to one of our financial planners to help create a plan for retirement today.

Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s). 

Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.