Simple tips to help you, your siblings and your parents to be prepared
Over the years there have been a number of negative headlines relating to retirement, and if you’re a baby boomer with ageing parents, this is probably something you’re concerned about.
With some simple planning, you can make sure you and your family are in control of the process.
Knowing your numbers is a major step in retirement planning.
The main questions you may be asking yourself about your parents’ retirement are: What options do my parents have, what can they afford, and what will give them the best outcome?
Following our five step process will help to answer these questions.
1. Planning: The best (and lowest stress) approach for your family is to plan in advance rather than being involved in reactive planning during highly stressful times.
2. Dealing with change: The idea of downsizing or moving to a retirement home could be something your parents have had little thought about, so it is best to think strategically about when it would be a good time to start discussions with them. Leaving all the memories and comforts of a family home and moving into assisted living is a major life consideration and takes a lot of adjustment.
3. Legal advice: Make sure the right legal documents are in place before they are needed. At the very least, your parents should each be thinking about a will and power of attorney documents to fulfil their wishes for their finances, health decisions and living choices. They may want to continue living in their home with home help, or they may have decided on an area or a particular retirement village. It is strongly advised to get independent legal advice to help navigate sensitive issues.
4. Financial advice: Once you have done some initial research and have a better understanding about your parent’s future plans, you can arrange for professional financial advice from an accountant, solicitor or financial advisor. Knowing how much equity is in the family home, and understanding downsizing options, any stock investments and superannuation contributions will make future planning easier for your parents.
5. Health advice: When assisted living or aged care is needed, this is usually due to serious health issues. Make sure you have details of your parents’ doctor and other health advisors. You may also want to discuss with your parents whether they each have a power of attorney in place so that their attorney can act on their behalf.
Preparing in advance will eliminate a lot of stress for your whole family. These times can be very emotional for everyone.
When emotions are high it can lead to poor decisions, which is why taking the time to be prepared and have a plan in place is an investment worth making.