My parents are both in their late fifties; active, working, and relatively healthy. Together, their hard work and support has put myself and my two other siblings through college, paid for my brother’s wedding, and helped us with a loan to buy our first house for our growing family. They helped my siblings and myself pay off vehicles, and to meet the gaps in car repairs or apartment deposits as we muddled through out twenties. My dad has had a long and successful career in the construction industry, and after a decade at home with her kids through our early childhood, my mom went back to school, back to work, and has been working full time again. Now, with three grown children with careers and families of their own, my parents deserve to take their work a little slower.
For both of them, retirement looks quite different than it did for their own parents twenty years ago – they’ve saved carefully and are well into paying off their mortgage, but the traditional retirement plans of my grandparent’s generation aren’t there for my parents. The cost of living on the coast of California has risen steeply since my own childhood. Many of their friends rent out second units or have sold off investment properties just to afford the maintenance on their own homes. Even more of their friends are working full time well into their sixties, and even seventies, because retirement seems like too much of an uncertainty.
I want my parents to have a chance to travel again, and for them to feel they have room enough in their financial plan to work part time, rather than working full time with increasing fatigue until accident or illness prevents them from doing so. They both really enjoy their jobs and have fulfilling careers, and I know they aren’t ready to retire fully. But with small children in my own home, I know that the years go fast and it won’t be too long before they want to slow down work and enjoy their beautiful home and property, travel, and spend more time with their growing number of grandchildren.
Another important goal for our family is to avoid big financial surprises without a plan, which means it’s time to start a conversation about the specifics of my parent’s retirement finances. We talk about their retirement as “eventually,” but what exactly does that look like in two year, in five, in ten? Breaking things down into manageable steps with clear goals is as important in retirement as it is when you are starting out life and buying your first house. Just as my parents supported us in that process, I feel it’s important for my siblings and I to support them in this one.
We need to talk about questions like whether they plan to eventually downsize, or to keep the home they’ve lived in for twenty-five years. I’ve realized that I assume they wish to stay in their own home, but maybe they’ve been thinking about a smaller place closer to the beach down the road, or move to live closer to myself or my siblings. If they stay in the house we grew up in, does their retirement plan include making gradual remodeling changes to accommodate for things like decreased mobility or live-in care? If my siblings or I, or one or our children, wish to live with my parents should their health decline significantly rather than seek out of home placement, can they afford modification to their existing house? Do they have a plan for upkeep when the work of a large home and larger yard become overwhelming, or if they lose interest in spending a significant amount of time maintaining they home themselves (both of my parents are avid and capable DIY-ers, but I know they won’t want to trim their own trees in twenty years). What’s the plan for long term medical insurance, and how will they pay for something insurance doesn’t cover if they don’t want to use what they’ve saved for month-to-month living expenses? When do they imagine themselves ideally moving from full to part-time employment, and what needs to happen before they can do that? When do they plan on retiring fully from their jobs, and have they made a secure financial plan, so they can do so with confidence?
The above list is a starting point: questions I don’t know the answers to, but which I’m sure my parents have started thinking about more and more. There are several ways to pay for retirement care options, including private pay, long-term fare insurance, veteran’s aide and attendance programs, respite grants, Medicaid, etc. Reverse mortgage loans may also be an ideal second source of income. These programs would enable my parents to withdraw some of the equity from their home when additional money is needed, while still living in their home.
The great thing is, right now it feels like we still have time ahead of us as a family to talk about these questions. I’m already looking forward to my parents having more free time to visit us and to host us in the years to come. I’m excited to see my mom have time to put in her beautiful vegetable garden again, which gives her so much joy, and for my dad to have an easier time balancing all of his community involvement with a busy work schedule. They’ve worked hard for years and deserve to enjoy their retirement. It’s time to map out retirement options and get the conversation started today.
This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.
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