Parents are generally not comfortable discussing their retirement plans with their children because, for them, it might mean admitting to their shortcomings or simply because they do not feel it is time to disclose their true financial worth. That is why you need to approach this subject with sensitivity and more importantly with practical plans in place.
Understand Their Expenses:
Ask your parents what is their monthly expenditure and how do they intend to meet them, after retirement. Let us start with some basic questions like:
- Where would your parents like to live after retiring?
- Are they willing to stay with you or in their respective homes? If the latter, how close are they towards owning the property?
- Does it need any alterations, repairs? Is there money set aside for such things?
- Would they need any monetary contributions from your end?
Plan For Income Streams: Start With The Common Questions:
Are they likely to receive any pension from their days of service, if yes, how much? How can they create alternate revenue streams, from their Fixed Deposits or other types of the corpus that they have created over the years?
For example: if they have multiple smaller FDs, it might make sense to put them all in fewer and more manageable debt funds or FDs to take care of their monthly expenses.
Assess Existing Investments:
Once you have figured out your parents’ monthly expenses, you can discuss options to meet these. You can also discuss their existing investments, and help them organize the investments to meet their expenses. If an insurance matures close to the time of their retirement, can you help them reinvest this sum, and where?
Pay Off Loans:
If your parents wish to stay in their personal home, but have taken a loan for it, it is advisable that this loan, paid off before they retire. The same goes for any other loans. You can offer to help with these loans as well. Inquire about the amount that are yet to be repaid and the time remaining for the same.
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