In India, the kids have always been considered as the ultimate investment for your retired life. We can call it societal norm, peer pressure or the way families have been run & managed since ancient times when there was nothing like social security, pensions or facilities for that matter.
What still exists however it the fact that to secure the future of the kids, parents constantly try to give their offspring the best and therefore they end up risking their own future. Be it the education of children, weddings, settling them off with a house or a business – the Indian parents are mostly found without a proper and well managed plan of retirement.
The reason why having a retirement plan has become so significant is our expenditures are on arise, the lifestyles have evolved and therefore the expenses related to lifestyles. Our generations spend a lot on gadgets, some of these were not even in the market until then. When you are young, you ought to spend a major chunk on the extracurricular activities of your children, you also invest hugely in aesthetics – be it for your car, room, office or home. Some of these expenses were almost non-existent 2-3 decades ago when our parents should have planned for their retirement.
All of the above reasons make it all the more significant to Invest or to Help your Parents Save for Retirement. Here’s how we can do it:
Do not wait or contemplate about the timing. Start the conversation now and ask your parents if they have any plan on how to handle any expensive emergencies or explain how this conversation can really help.
Tip: Try and do it for both sets of parents to avoid any sort of resentment between you & your partner.
Prepare & Have an Agenda for Conversation
Like our parents, we also sometimes overextend our planning and lose out on other financial goals. Set aside a clear agenda and see if theirs and your emergency fund is enough. The basics of this conversation should be to know the following:
Long term care insurance – What policies do they have for health, pension etc.
Retirement Funds – Know if they have invested in any long term ELSS, maintaining any liquid funds etc.
Mortgages – Check on their mortgages. It is very important that they have all mortgage free assets as it provides your parents with peace of mind.
Debt – Suggest them to keep a check on debts be it their credit cards, self-help groups or to any members in the family or friends.
Will and Estate Planning–The idea is not to grill your parents on what they plan to leave for you but it is to make sure that they have properly planned for their estate. The simplest and very basic check for the parents in India would be, Is your Mom a nominee on your Dad’s bank account and vice versa?
Check all the Documents – See and make sure that all their documents are in good state, well organized and arranged.
It is understood that the above mentioned things make it very uncomfortable topics to be discussed with parents especially in our country but you can make them understand that it imperative for them to better enjoy their retired life.
Why it is so significant?
Remember, your parents might have been saving for retirement ever since your birth and may be a little after that but the chances are that they must have exhausted a part of all of it in your educational spend, an extra course that you were keen on taking or may be the destination wedding that had become your dream of life. They did so to give you the best and most of the parents want to manage their own expenses always.
Through this you can help them set their Retirement Goals upright and guide them to plan their retired life better. And in case, you find it all the more difficult – speak to your Financial Advisor and seek help as to How you can help your parents through their retired life?
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