The 2008 economic downturn had a huge impact on the entire country, especially baby boomers. There were massive layoffs and forced retirements, a drop in the stock market, a return to employment possibly making less money, and for some, a housing market that still hasn't recovered. Although the unemployment rate is back to prerecession levels, many of our parents remain unable to retire at the planned age.
As their child who likely now has your own family, bills, upcoming college and a retirement to fund, how can you help?
1) Delay Social Security. Americans can begin collecting social security at age 62, though they will get the biggest bang for their buck if they delay withdrawing until age 70. Many are tired of working, but considering we're living longer and expenses are rising faster than the benefits, it would be prudent to hold out for as much as possible.
2) Check on former employer benefits. Many companies offer 401k and/or pension plans, which your parents may now be able to withdraw from. All too often people never transferred the balance to their new employer, so go back to all places they've worked and verify that the benefits have been transferred or exhausted.
3) How much will they have? Between social security, pensions and other income, how much money will they have once their paycheck stops? Will expenses have to be cut? Can they take on part time work to supplement income? As much as they may yearn for retirement they must be very clear and prepared for the imminent lifestyle change.
4) Determine what's most important and devise a plan. Besides not working, how do they want this next life phase to look? Do they want to move, travel, continue to live on their own, sit in the house and do nothing? Make sure they're clear on their long term goals and have the means to provide for such. After all, it falls back on you if they're unable to make ends meet.
5) Don't forget about health insurance. Will it carry over from their job? Do they have supplemental insurance? Are they solely relying on Medicare/Medicaid? Medical costs rise exponentially as we grow older, and it has wiped out many people's retirement savings. Be sure you've considered how you'll pay for your parents' impending health decline.
6) Become housemates. America is one of the few countries where generations typically maintain separate households. This is a great opportunity to come together under one roof, which will both cut housing expenses and provide extra help with the kids.
And so it is.