6 Do's and Don'ts for When Your Retired Parents Ask for Financial Help

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Much of who you are today can probably be attributed to your parents. They raised you, loved you, taught you right from wrong (hopefully), and introduced you to Neil Diamond -- for better or worse. And maybe they even taught you a thing or two about finances.

So what happens when you find out that the people who taught you to ride a bike and walked you down the aisle at your wedding haven't saved enough for retirement? How can you help your parents without hindering your own finances? Here's a list of do's and don'ts when it comes to helping your parents navigate retirement:

1. Do Make Your Position Clear

If your parents are coming to you for help, they may have certain expectations. Before agreeing to anything, sit down -- with your spouse, if you're married -- and decide how to best help them without risking your own finances. After you've settled on a course of action, clearly communicate to your parents exactly how much you'll be able to do. Make sure to establish the ground rules from day one to avoid misunderstandings down the road.

2. Don't Put Your Own Household in Jeopardy

While you may think you have the extra money to prop up your parents' post-retirement lifestyle, first, consider your own family's needs. Have you paid off your own debts? Do you have an emergency fund? Are you saving enough for retirement? How much do you have saved to put your children through college? You should have your own household's financial ducks in a row before you consider helping anyone else.

3. Do Help Them Set Up a Budget

While your parents may only be hoping for monetary assistance, you should start by helping them set up and stick to a budget.
It's often easier for an outsider to look objectively at expenses and see where money can be saved, so walk through their monthly budget with them to see what cost-cutting options your parents may have overlooked.

4. Don't Give Them a Credit Card

Giving your parents a credit card may seem like the easiest solution, but it could also be the most detrimental. If overspending occurs, it's your financial well-being on the line. Further, a blank check or open credit line might create a feeling of entitlement. And if you ever have to withdraw your help, it will mean actively taking away their access to that credit line -- which could put extra strain on your relationship.

5. Do Give Where You Can

This isn't the time to teach your parents a lesson. In all likelihood, they spent lots of time, money, and energy on helping you become who you are today. Be generous where you can and don't expect anything in return.

6. Don't Stop Saving for Your Own Retirement

This is crucial: Make sure to keep setting aside as much as you can for your own retirement, even while you help your parents through theirs. While the immediacy of your parents' financial troubles may seem like the most urgent matter at hand, you can't stop investing in your future. Otherwise, you might find yourself in a similar situation down the road. So if you have a hard time saving for your retirement, do it for your children's sake. Someday, they'll thank you.

Joanna and Johnny are the writing duo behind OurFreakingBudget.com, a personal finance blog documenting the joys, pains and realities of living on a budget.


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Irma Rowland

don't give us a credit card? we gave each of them one. they carried one of ours for emergencies. so now that we are in the "donut hole" we can't charge our $4000. worth of meds to them. so we can eat this year?

March 14 2014 at 7:00 PM Report abuse rate up rate down Reply
elrod.porkmore

the writer of this article needs to be fixed so they can not reproduce

February 25 2014 at 1:50 AM Report abuse +1 rate up rate down Reply
karin

omg. I have Never commented on an article in my life, but this is insane....I am a single mother that relied heavily on my parents to help me with my young twins until I Graduated from College. And now.... while raising my 15 yr old SOn from my second failed marriage...........I am working 2 jobs...haven't had a day off since August and currently supporting one of my twins and her two children..........The idea that any of my children would think of themselves before thinking of me is as insane as me thinking of myself before them. The writer of this article has got it soo wrong in life and all I CAN Say is thank god you are not my child.

February 25 2014 at 1:23 AM Report abuse rate up rate down Reply
Paula

this is the worse article I have ever read. Parents would never do that to their children so why would someone advise something like that to children to do to their Parents. My pockets are always open for my family which really on consists of my Daughter her Husband and grandkids but if they ever needed I am there for them. Don't know what the future holds just hope my Daugther is there for me.

February 24 2014 at 8:58 PM Report abuse -1 rate up rate down Reply
1 reply to Paula's comment
betty_brock

Not everyone shows responsibility. It depends.

February 24 2014 at 10:43 PM Report abuse +1 rate up rate down Reply
penrosecottage

How many time did you get a loan from your parents and never paid back, they helped you and now its your turn to help them,who took out loans to send you to school that you never paid back

February 24 2014 at 8:36 PM Report abuse -1 rate up rate down Reply
pfjw

Family Lending - in whatever direction - needs careful limits.
a) *YOUR* family comes first - and in every consideration of significance.
b) Consider what you give as a gift - do not expect to see it again, nor ask for it back.
c) Manage expectations. Whatever you give should be taken as a one-off item, not a precedent for ongoing contributions.

My wife and I have had this discussion. We will leave our main house and our summer house to the kids. We will leave the principle from our TSAs and pensions to the kids if any remains. We will leave no debt and no mortgages behind. That is pretty much fixed at this point. We have long-term health insurance so we will not be medical burdens. This is not to suggest that we will be living large in retirement. Reasonably comfortably about covers it. While we are healthy and working we are doing all the deferred maintenance, repairs and upgrades to the house we can in order to make it as worry-free as possible when we can't any more. And so forth.

But, we have been remarkably lucky for our working lives with good jobs and the ability to save. The kids are adults with kids of their own and also in good, secure jobs, so they are lucky. And, in a pinch they could certainly afford to carry us - and would without question. But it is not going to happen imaginable circumstances. For which we continue to be thankful.

February 24 2014 at 4:19 PM Report abuse +3 rate up rate down Reply
Fred

If your children knew how lame you were, they would murder you in your sleep- Frank Zappa

February 24 2014 at 2:30 PM Report abuse -3 rate up rate down Reply
chdv

cold and heartless advice , no love for your parents when they gave so much during so many years

February 24 2014 at 1:43 PM Report abuse -2 rate up rate down Reply
1 reply to chdv's comment
david.g.addison

or practical. if you read the article, it says to give where you can. just don't do it recklessly that it puts one's own family in jeopardy.

February 24 2014 at 2:56 PM Report abuse +4 rate up rate down Reply
mtnmama830

No articles regarding advice to parents on when the above situation is revervsed...i.e, married, 'adult kids' are not only expecting, but feel entitled when it comes to retired parents helping THEM out financially? A lot of our adult children are products of 70's/early 80's and grew up during a better economy. Hence, although they were taught to "save for a rainy day", did not and still want to live like they did in their youth. After putting a major dent in our retirement fund helping them out and our grandchild, it doesn't seem like they are getting the message. Hear the same story from a lot of boomers regarding their 'kids' also. "Golden years" ...don't think so!

February 24 2014 at 12:30 PM Report abuse +2 rate up rate down Reply
2 replies to mtnmama830's comment
eweneeeek

The same advice really applies when grown kids come to their parents for help.

February 24 2014 at 1:14 PM Report abuse +1 rate up rate down Reply
Sharon

Amen mtnmama! If I EVER ask my kids for help they need to remember the times I have helped them without being paid back and with no explanation for the treatment. The bank of Mom is closed.

February 24 2014 at 3:20 PM Report abuse +1 rate up rate down Reply