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6 Things to Do When Your Aging Parents Have No Savings

By Catherine Brock - Updated Oct 30, 2019 at 1:23PM

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What do you do if you suspect your aging parents don’t have any retirement savings? Here’s how to get them on the right financial track.

It sounds like the makings of a sitcom, but your parents may end up rooming with you if they haven’t started saving for retirement. An analysis for the Harvard Health Letter using U.S. Census Bureau data concluded that some 3.4 million people aged 65 or older were living in a grown child’s home in 2016. 

Before you start counting the ways your life will change once your parents move in, prepare to do some information gathering. Your parents may not have much in savings, but the faster you can get their finances in order, the better off you’ll all be.

A woman hugs her aging mother

Image Source: Getty Images

1. Get your siblings on board 

Start by having an informal chat with your siblings to share perspectives. Has anyone already had this conversation with mom and dad? If so, how’d it go? Also find out who’s willing to join forces with you to ensure your folks have a good plan for the future.

You may get a mixed response to your request for a family conversation. As they say, you don’t choose your family. But you can let them know that participating in this conversation is a good thing -- it means fewer surprises for everybody later. 

2. Invite your folks to an open conversation about finances 

Your parents may be defensive about their financial situation, so it’s important to set the tone carefully. Do your best to treat this as a shared circumstance. You’re not fixing or blaming. You’re simply looking out for them by planning for their future. 

By starting the conversation with an offer to help, you can keep from playing the blame game. You might say, “Mom and Dad, I’d like to help you guys plan for your later years. Can we set aside some time to talk about financial stuff?”

3. Ask for the numbers 

It may feel better to talk about finances in generalities, but to be successful, you need to resist that urge. You can be most helpful when you know how much your parents spend, their income, what they own, and what they owe. It’s also useful to chat openly about how stable they think their income is. For instance, Mom may plan on working another 20 years, but things are more complicated if she’s worried about getting pushed out next year. 

When you understand their income outlook, you can broach the topic of Social Security benefits, and help them strategize on when to take those benefits. If they aren’t sure where they stand with Social Security, help them set up an online account with my Social Security. And while you’re at it, see if they’ll share passwords to their other financial accounts in case you need to check in on those.

4. Address debt and out-of-whack expenses first 

If your folks have a ton of debt or are borrowing to cover their expenses, help them find ways to spend less. Review their credit card statements and checking accounts for subscription services they don’t use, encourage them to shop around for cheaper rates on home or auto insurance, and introduce them to streaming TV so they can cancel cable. 

A consistently high grocery bill is a harder challenge to tackle. You might introduce them to a grocery delivery service to minimize impulse purchases. A produce delivery service can also eke out some savings, as these focus on less expensive, seasonal produce that’s locally sourced.

Once your parents’ spending is in line with their income, every bit of savings should go towards paying down the debt.

5. Consider downsizing on homes and cars 

If your parents are open to it, downsizing now may result in more freedom later. Selling an extra car raises some quick cash to pay down debt, and also reduces insurance and maintenance expenses. Downsizing the home may be a tougher conversation to have, but it’s worth exploration. A smaller place that’s fully paid off provides a lot more security for your parents than a bigger place with a mortgage. Ongoing maintenance and expenses will be less, too.

6. Brainstorm new streams of income 

Even after you help your parents streamline their debt and expenses, they probably won’t have access to the traditional, work-free retirement lifestyle if they haven't been saving diligently for years. That’s not to say they’ll be fully dependent on Social Security either. They could start up a side hustle to generate income and protect their lifestyle.

A study by Prudential concludes that the most successful gig workers in America are over the age of 55, earning $43,600 per year on average. Within this group, 34% are retirees. So it’s not a farfetched idea. Maybe your dad’s success in the corporate world positions him for business coaching gigs. Or your mom’s love of gardening could earn her some light yard work. They could also rent out an extra room in the house on Airbnb. Or use that massive shoe collection to lay the groundwork for a clothing resale business on Poshmark. 

The joint effort pays off 

A little teamwork between you and your folks could have them on sustainable financial ground in just a few years. In other words, the best way to head off the parent-roommate situation is to start those tough conversations now. 

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