If your parents are not on track financially and are headed for retirement or already retired, what should you do? That’s what a listener of the Clark Howard Podcast recently asked.
Should I Help My Parents Save for Retirement?My parents aren’t financially prepared for retirement. Should I help them? And if so, how much?
That’s what a listener asked on the May 5 podcast episode.
Asked Farahn in Texas: “My parents aren’t very good with money and they currently don’t have any retirement saved. My dad is 53 and my mom is 63. They have a lot of health problems as well. So my question is, should I include them in my financial plans? Should I plan to save a retirement for them? Should I try to help them make better financial decisions?”
Clark just got a call from a family friend trying to figure out what to do with a financially destitute parent with medical problems, he says. If you are willing and able to help, and if you trust your parents with the money, consider Clark’s long-time favorite, the Roth IRA.
“Lots of adult children are finding as their parents age that the parents have the dual problem you described. No money saved for the future. And medical problems,” Clark says.
“For your parents, it’s really late in the game for them to build up savings. If you are willing to take on the burden of helping with saving for retirement, and if they would not squander the money, you’re able to put up to $7,500 [a year] in a Roth IRA in each of their names.
“That’s a transfer of generational wealth in reverse.”