Dear Dr. Don,
My parents are in their early 60s and need help with retirement planning. I just got a cold reality check when my mother told me they have no plan and only vaguely understand their options. My father is self-employed with less income potential than he had in the past. A lot of their retirement went away with the dot-com bust. They have limited assets. I really feel overwhelmed.
Does a financial planner make sense for someone with $300,000 in investments? They do own their home, a small office building and expect some inheritance.
I want to help them set up a budget. I don’t feel like this will be of much benefit until I understand what their monthly income will be in retirement.
What else can I do to help them? Where can I go for resource materials?
— Paul Plans
While there’s a lot of information available online, a fee-only financial planner can be very helpful. The Bankrate feature, “Financial planners: Not just for millionaires anymore,” explains why financial planning isn’t just for the high net worth client. I also suggest taking a look at the National Association of Personal Financial Advisors, or NAPFA, recent publication, “Pursuit of a Financial Advisor Field Guide” available on its website.
Bankrate has a host of retirement calculators available, but I’d also suggest using the Social Security Administration’s Retirement Planner. That’ll be a good starting point in putting together a retirement budget.
You may want to discuss the idea of a reverse mortgage with your parents. There’s been some recent controversy about how these loans aren’t meeting the expectations of senior borrowers, but it may offer a financial backstop in planning for their retirement.
It’s often hard to discuss finances with your parents. It’s a bit of a role reversal and can be hard for them to accept. That’s where a professional can step in and make a difference in the planning process.
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