Your Parents Have NO Retirement Savings – What’s Your Responsibility?

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no retirement savings
We all know having no retirement savings is a bad situation. But what if it’s not you, but your parents, who have no retirement savings – what’s your responsibility? On first thought, it might be tempting to dismiss the entire scenario. You can simply assume that your parents have some kind of retirement savings set…

We all know having no retirement savings is a bad situation. But what if it’s not you, but your parents, who have no retirement savings – what’s your responsibility?

On first thought, it might be tempting to dismiss the entire scenario. You can simply assume that your parents have some kind of retirement savings set aside. Or, you can rationalize that if they don’t, it’s not your responsibility anyway.

But your parents are the people who raised you, who used their financial resources to provide for you in your childhood and early adult life when you couldn’t do so for yourself. Some states even have filial laws on the books, requiring children to help provide financial assistance for impoverished parents.

While it’s true that most states do not have filial responsibility laws, there is still some form of responsibility on your part, if only a moral one.

The reality today is that many people who are approaching their retirement years don’t have much in the way of retirement savings. True, in many cases it’s because they didn’t have any plan or motivation to make it happen.

But other times, it’s because a job loss occurred at a bad time in life, or a rash of significant expenses, such as medical bills, providing for elderly parents, or college education for their kids, that left them with an empty bank account.

Whatever the reason, if your parents have no retirement savings, what can you do to help?


Encourage Them to Save as Much as They Are Able

Your first best strategy in dealing with your parents is to encourage them to save as much is possible. Even if they’ve never saved before, you can stress that the absence of dependent children should free up more of their income to direct into savings. You might even consider creating a budget for them, particularly if this has never been one of their motivations.

Many times people don’t save for retirement because they fear that they would be doing so too late in the game to make a difference. Maybe they won’t be able to save up enough money to have a comfortable retirement, but any money that they can save will have a positive effect on their later years.

For example, if they can save $50,000 over the next 10 years, it may not enable them to retire, but it will certainly give them a generous emergency fund to fall back on.

Encourage Them to Make Frugal Living Choices

For a lot of people who have no retirement savings, it’s a matter of making the wrong spending choices. You might be able to help them with this.

For example, if they’re still living in the same four-bedroom, 2 ½ bath, two car garage house that they raised you and your siblings in, recommend that they downsize. Sell the house, and move to smaller, less expensive living quarters.

Not only would such a move help them to accumulate money for retirement, but it will also result in lower living expenses, which will enable them to live better during their retirement years.

They could even utilize a tool such as Personal Capital to help them track and manage their finances using their free financial tools.

Encourage Them to Get Out of Debt

Some people live their entire lives in debt, and unfortunately, our culture tends to encourage that behavior. But when you’re approaching your retirement years, that kind of financial lifestyle has to change. It’s even more important if you have no retirement savings.

Paying off debt is generally the single best way to lower your living expenses. If your parents have car loans and credit card debt, encourage them to pay these off as soon as possible. Not only will they lower their living expenses, but once the debts are paid they’ll have more money to put into savings.

Encourage Them to Explore Additional Income Ideas

People who don’t have sufficient retirement savings have to get serious about how they will earn income during their golden years. It’s not always possible to continue working a full-time job in your lifetime career much past age 65. They may have to consider creating entirely new and different post-retirement careers.

Fortunately, there a lot of options here, especially with the Internet. Encourage them to explore business opportunities, particularly those that can easily be marketed over the web. They may also want to consider downshifting from full-time, career type positions, into part-time work in a more enjoyable field or atmosphere. Some options might include:

Lyft If your parents live in a reasonably populated area then there is probably a need for rideshare drivers. Lyft is a top company in the rideshare market and can get them plenty of riders.

Fiverr If you have marketable online skills Fiverr is a great marketplace to bring in business.  This can be anything from transcribing to web development.

VIPKid – If you have a bachelors degree and are a native English speaker you can get paid to teach Ch

It’s generally not possible for people to survive on Social Security alone. But if a couple is each receiving Social Security, and each supplementing that income with a part-time job or business, they may do just fine. That’s the arrangement you may need to prepare them for, and since it may take advanced planning, now is the time.

Encourage Them to Delay Retirement, if Even for a Few Years

While most people don’t want to delay retirement, it may be in your parents’ best interest to do so, even if it is only by a few years. Delaying retirement gives them a fighting chance to implement all of the above ideas – saving more, learning to live on less, getting out of debt, and even transitioning to part-time employment.

Another important thing this allows them to do is delay taking Social Security Benefits. You can earn between 20 and 30% more in Social Security Benefits by delaying your benefits start date.

(See Social Security Age Reduction Chart for more info).

Worst Case: Prepare Yourself for Your Parents Retirement

It may well be that all of the late-stage efforts by your parents will be insufficient to enable them to comfortably survive in retirement. If that’s the case, you may need to be prepared to step in with some direct help.

That doesn’t mean providing your parents with a monthly income or enabling them to live outside of their means. But there are ways that you can help in a less direct manner.

For example, if you have your own business, you can consider hiring one or both of your parents on a part-time basis. You might also consider bringing them on to work on a contract basis, where they handle a specific part of your business.

Alternatively, you might help them start a business in a more direct way. You can, for example, connect them with other people who can help them start the business. Or you might have contacts with businesses who may be able to employ them on a part-time basis.

In a more direct way, you might offer to take over one or more of their debts when they turn 65. This will lower their living expenses and give them a fighting chance of surviving on a reduced income. If you go this route, you will, of course, need to get a solid assurance that they won’t take on additional debt to replace the one you’re covering.

(Learn more about lending money to family members)

As an extreme measure – and particularly if your parents are completely unprepared for retirement – you might consider taking them in to live with you. This could mean creating an extra living space somewhere in your home so that they can live with you peaceably. By removing housing expense from their budget, you’ll be taking away what is probably be the biggest single expense they have.

It’s tough enough to provide for your own retirement, let alone someone else’s. But if you have to step in and help your parents in any way, it’s best to begin working on it as soon as possible. That will give you time to prepare and to position yourself to be able to help them with the least amount of disruption in your own life.

While you’re working to plan and prepare for your own retirement, are you ever concerned at how your parents will survive in retirement?

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About Kevin Mercadante

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.

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  1. Helen says

    I also worry about my 60 year old mom. She has not worked since she was 40 years old. She lives with her boyfriend and she stays home.
    I worry about what happens when her boyfriend passes away.
    Will he leave her anything? How will she survive? Does she even think about these things?

    I have to get over the awkwardness and ask her these questions.
    I just have a feeling it will all fall on me.
    And what are you supposed to do? Refuse to take care of your parents when they need you?
    Watch them become homeless, begging for change on a corner street?

  2. Linda Martin says

    Sadly, I am that parent. I raised two children on a single parent income with no room for any real savings and no home ownership. I was recently forced out of my rental (rent kept going up and up and up), and moved across the country to be closer to my oldest. I am intelligent, a college grad with a healthcare degree, and now I can’t find a job in my field. I am 61. You can’t even imagine the heartache, shame, and darkness I have knowing I am such a burden on my oldest son.

  3. BB says

    Cashmoney, If boomers were not getting an annuity or pension and or were not in the upper percent of income earning a minimum of six figures in latter years they were in a sinking elevator.

    After WW2, a family could exist for most families on only 1 income and home purchase and car costs compared to weekly salary versus home and car costs today were much lower.

    Around the 1970s replacing pensions with 401K was a questionable concept as most 401K are not your fiduciary and have no responsibility to help you get the best returns. Operational fees are usually high due to this.

    The average worker works for a small company that has no financial advice for your use. Larger companies have better choices and usually allow employees to access the investment advisor. Expecting all citizens to be their own financial advisor is long term unwise. All the poor folk you will pay for in hospitals and state homes unless future generations are OK seeing mom and pop living in a cardboard box on a sidewalk. There are plenty of cruel folk out there who feel this way

    The lower paid wage earners need heaps of help and advice on financial planning ( usually paying for a licensed profession) expecting every citizen to be a PRO (when its a full time paid career for planners) in this regard is just again not wise and not possible to do for many.

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