Good morning Dinks. As a financial planner I had a lot of clients in their 30s and 40s. Over the years I have had a few clients who are older and retired, but not too many. My older clients weren’t actually looking for financial planning advice; they were more looking for wealth management, tax efficient and income generating ways to preserve their wealth.
Different age groups definitely have different financial planning needs; after all this is the philosophy behind the entire life stage financial planning concept. As financial savvy Dinks we know that different people at different ages have different financial needs, but is the overall concept of financial planning also dependent upon different age groups?
How are your parents planning for retirement?
Think about your parents for a moment, when they were are age did they seek the advice of a financial planner? I know that my parents didn’t. My parents had two income and two kids and they spent money where and when they needed to and that was it.
Nowadays financial planners preach the importance of planning and saving for retirement, but that was not always the case. Other than a company pension my parents did not start saving for retirement until much later in life. This is not to say that my parents won’t have a financially stable retirement, it is just to say that it was never one of their main financial priorities.
Employer pension plans are also becoming a thing of the past. Not many employers nowadays offer a guaranteed pension plan for their employees that doesn’t not require mandatory employee contributions. My father was luck to be employed at the same place for most of his adult life, this allowed him to retire at 55 years old with full pension benefits. How many of us can say that is a retirement option we have? That type of employee loyalty is a thing of the past and so is that type of benefit.
Will you support your parents retirement?
Some parents are not lucky enough to have an employer pension plan and they were not fortunate enough to have the advice of a Financial planner when they were younger. However they did have the smart idea to purchase a property at a young age and pay it off as quickly as possible.
I have an aunt who doesn’t have a pension plan but she does have a home worth $600,000 that is fully paid for. When my aunt is ready to retire she will sell her home, downgrade to a smaller living space and live off the remainder of her profits.
Maybe your parents will move in with you at retirement, or maybe you will move in with them. It is common for parents to move in with their kids to help reduce monthly living costs. My grandfather lived with my father and I believe that my father really enjoyed it. As a teenager it was amazing to see my father still be seen as a child in my grandfathers eyes.
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Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
I will just say this: I will do what I need to do to take care of my parents in retirement. I am confident they are planning properly, but they have done so much for me the first 20+ years of my life that I have no reservations about returning the favor, if needed.
I would do anything for my parents, but I wouldn’t be extremely happy about having to give them money if they needed it. They’ve made enough money to be able to have a great retirement. I’m not too worried though, they seem to be planning properly.
We will do what we can to help our parents in retirement. The problem is that one has done absolutely nothing to plan accordingly and is feeling it as a result. You can only direct them so much and they have to want to do it themselves.
My parents (53 and 51) decided last year to sell their house and move in with my grandfather (he has the room and needed some help). They’re solidly middle-class now but were pretty poor when I was growing up. As a kid, I didn’t really know we were poor because I went to public school and had friends who were even more poor. My parents scraped enough together to send me to a cheap Catholic high school. I had to get a suit 3 sizes too big because it had to last all 4 years. Ten years later it still fit and I was still wearing it on job interviews.
I have ambitions of retiring when I’m their age but if they need some help I would keep working. They’ve gotten their act together financially over the last decade (it helps that I’m out of the house and my sister has 1 year left of pharmacy school) but I worry they lost too much time to catch up. I’ll help however they need but by that time my sister should be in a much better position to help than I will.
I would be totally cool to have my parents in my house.
We are dealing with the reality of one set of parents who did no retirement planning and evaluating potential options… The most cost effective does seem like it’s too have them move in with us eventually. Now we are focusing on how to make that happen and keep everyone sane :-)
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