Retirement savings is an important topic for anyone. Sadly though, there are instances when people think about it at a time when it is already too late. Admittedly though, it is quite hard to think about retirement when it is too far off. There are a lot of things to prioritize and think about at present.
This could be the same sentiment you parents had in the past when they were thinking about their own retirement. There are even times that it is a toss up between retirement funds vs college funds for you. This is because they know very well how challenging it is to graduate with huge debt over your shoulders.
For those that did not really give much thought to their old age needs, they could find themselves working in retirement. As Time.com shares that most people seem to be out of full-time jobs by the time they reach 66 years of age, there is still a good number of them finding the need to go back.
This is tough especially when they have to go back to work because they have to in order to fund their retirement needs. Imagine all the sacrifices they have made just to give you a good life. Think about your moms especially as we all recently celebrated Mother’s day. Look back at all the sacrifice she has made for you. How can you help them with their retirement savings now that you are older and wiser?
Do not ask for money
This is the number one rule when you are already earning your own money. Never ask your folks, especially your mom for money. You need to be able to provide for yourself especially when you are already earning on your own. In fact, it should be the other way around. They might not ask for it but it would be nice if you could treat your parents out every now then for dinner or movies.
One way you can prevent asking your parents for money is to manage your own finances well. This lessens the chances that you would need to ask your folks for a few dollars to get you over to your next paycheck. There will be times when they will say no but you have to remember that it is a lot harder for them than for you. You are still young and can earn that money. Your mom is getting older and she might be dipping into her retirement savings just to loan you a few hundred that you need.
Think twice before asking them to cosign a loan
This has almost the same repercussions of asking your mom for money. Asking her to cosign a loan can put her own finances in peril. This is because she would carry the same responsibilities as you would in loan repayment. If you miss your payments, she would be getting collection calls as well. Not to mention her credit score taking a dip as well because of your non-payment.
More often than not, you would usually ask your mom to cosign a loan so you could take advantage of her high credit score. This would allow you to get low rates for your loan. If this is what you are after then it would be better to manage your own credit score. Look for ways on how to increase it in time so you can take out the loan yourself.
One way is to review your credit report to spot possible errors in them. Correcting these mistakes can help you manage your credit score. You can also build up your own credit by ensuring timely payments on your debt obligations. This way, you do not have to put your mom’s retirement savings at risk as they might use that to pay for a cosigned loan you took out.
Do not ride on their cards
Credit cards are not all bad because they can even help you manage your household budget better. You can use specific cards for specific expenses so you can keep better track of your expenses. This can even help you maximize the reward points at the end. Overall, responsible use of your credit cards can help you gain better control of your finances.
That being said, your mom could be using her card for that very same purpose. Asking if you can use it to buy something you want might throw her off budget especially if you miss a payment on the card. Remember, every time your mom experiences unexpected financial challenges, their retirement savings is always in danger of being used up more than what they intended it for. This is because as they retire, they will rely mostly on this account. Use your own card or better yet, save up for those “wants” so you do not feel guilty after.
Help them manage their finances and retirement savings
One of the things you can do for your mom is to help them manage their finances by leveraging on technology. For those recurring and fixed payments, you can help them set-up auto pay that comes out of a nominated account. You can also help them review their expenses by teaching them how to create, login and monitor their accounts online.
Talk to them about retirement
Gallup.com shares that about 74% of adults expect to be working well past their retirement age either part-time or a full-time work. You need to talk to your mom about retirement and determine what their plans are. Once you have a better understanding what their plans are, you would be in a better position in helping them.
Look for ways to keep them active
Whatever they choose in retirement, find a way to keep them active. You can explain that financial management is just like personal finance in a way that they need to continue working on it. Retirement should not be all about spending all their time in front of the tv. They can take long walks in the part, take up a new hobby, or even volunteer at the center. The more they find happiness in retirement, the lesser the chances where they would feel inadequate. This can lead them to burn through their retirement savings just to find purpose.
Keep them away from financial scams
One of the best things you can do for your parents in helping them with retirement is being on guard against financial scams. According to USAToday.com, from the total number of financial scam complaints sent FTC in 2016, about 33% of them specifically targeted senior people. This can be anywhere from IRS, sweepstakes, to grandparents scams. You can regularly inform your mom about all these things so they can be on-guard and not fall victim to these fraud activities.
Your mom’s retirement savings will serve part of their lifeline once they reach old age. It will be their primary source of funds for their needs. You can help by making sure that you do not put them in a position where they have to chose between you and their retirement fund. This is because they might choose you putting your needs on top of theirs. When this happens, they would have a hard time and find it difficult to enjoy their golden years.