You read it right…!

You are grown up now working, settled, enjoying & managing your own life and finances. Hold on.. Have you thought about your parents? Are they settled financially or are they still trying to manage their finances for the rest of their life, for that reason their daily expenses!

People are getting more awareness in financial market than the early years. We have lots of investment options available now; and people are more comfortable to invest in shares, stocks, mutual-funds than rudimentary options like bank deposits, postal schemes, etc. Things are quite easy and accessible due to internet. We are all busy working on making our “future” successful. But at the same time, our parents are also thinking of making a retirement decision. Isn’t it?

Retirement age is fixed but life span has increased, health is improving due to advancements and research in medical science; however on the contrary with decrease in interest rates on fixed assets / investments and increase in inflation it is affecting the value of basic necessities. These current economic factors are forcing senior citizens to re-plan for their rest of the life.

After doing so much of hard work for years they are still worried about their finances, which is very painful. But you can help your parents to manage it and make their life easy and peaceful as you have their very important factor with you – “trust!“.

Following are some guiding points that will help you on this:

1. Don’t criticize your parents for the investment decisions they made earlier. Making investment decisions and its execution is not easy, even at their times. So respect it.
2. Help them to make a list of all their bank accounts, deposit certificates, insurance policies and other investments with all the important details such as bank name, account number, insurance policies numbers, to name a few.  As elderly parents usually forget about the maturity dates for deposit certificates / insurance policies.
3. If your parents had taken any loan for education/marriage or are using credit card then check the remaining balance due on it and suggest them to pay it off as early as possible. It may directly affect their savings. You should not be unknown of your parents debts, so that you can manage it in case of any unfortunate event.
4. The crux of investments in retirement planning is capital protection with regular investment, growth is a needed factor too. And hence your parents can invest some part of their savings in shares or mutual funds like market-linked debt products of mutual funds for additional regular income.
5. In case your parents are going to get a decent sum of money on their retirement/or received fund which they have accumulated over the long years, am sure lot of agents/advisers will try to approach with bundle of plans just for sake of bigger commission. Help your parents to get a proper retirement plan from a good financial planner whom you know and can be trusted.
6. If your parents want to purchase annuity insurance plans for regular income after retirement do consult a financial planner/advisor . It’s advisable that do not invest in any annuity plan without understanding the policy, its terms and conditions.
7. In India, lots of parents move to their son/daughter or relatives place after retirement or due to any unavoidable conditions. In such cases it may be difficult for them to move or get adjust to city as they might have their all investments and bank a/c in their home town. Therefore, change in communication address is an important step. Payment of company sponsored Retirement benefits such as insurance policies claims, pensions or dividend may make an issue in such cases.
8. Reverse mortgage is one more available option for regular income, which is not so popular in India but is only advisable in certain conditions as it may be expensive. In India, old people are generally very attached to their home.
9. Some people loves to work or miss their workplace, friends and their role. If your parent is one among them then encourage them to do a part time job which not only will help to earn some income but also a great way to learn, enjoy and making new connections.
10. Insist your parents on direct deposits of payment like pension/annuities, dividends options as it is the safest way. Most elderly persons in India still prefers the cheques in hand.
11. In case your parents wants to establishing their own business, help them to find a good lender/bank. Senior citizens can get loan at low interest rates.

The above points are just for guidance and may assist you to help your parents get the right direction and will also help to build their trust and spend the rest of life worry free.

Remember, your parents are done with their responsibilities now it’s your turn!

References:

1) Protecting your parents money: Jeff D.Opdyke