How I'm Helping Plan for a Parent's Retirement

As my mother nears retirement age (she's a baby boomer), I find her asking me more and more questions about how and what she should do to prepare. While I am far from a financial wizard, compared to my mother I tend to look like Warren Buffet. A former hippy turned art educator, it's easy for me to say with a clear conscious that she is knowledgeable about many things, but personal finance has not always been one of her strong suits. I have to admit, however, that she has worked hard in the years leading up to her retirement in an effort to expand her knowledge of the subject.

One of the resources she relies upon for this information is the AARP newsletter she receives; the other main resource is me. However, while I find this reliance somewhat flattering, it also tends to concern me a bit. While I enjoy providing her with my thoughts, ideas, and theories on personal finance and retirement, I don't want to be the one she blames if things don't go quite as planned. By utilizing the following techniques, however, I feel that I can help my mother prepare for retirement, but still allow her to make the final calls regarding how she does so.

Walking a Fine Line

Helping a parent or loved one plan for retirement can leave you walking a fine line, as I often feel I am doing. This may be a line between financial advisor and child, which leaves you giving advice to someone from whom you are typically used to receiving advice. For me it's a strange feeling, and not one with which I'm completely comfortable. Of course I want to impart my knowledge of saving, investing, and personal finance to my mother, but at the same time, I would feel terrible if something I told her to do cost her a significant amount of money and/or somehow altered or negatively affected her retirement or retirement plans.

Guiding Through Resources, Not Advice

I definitely don't want my mother holding me responsible for ruining her retirement in some way. I know she would love me either way, but personally, I would feel horribly guilty if something I told her to do ruined her retirement dreams. This is why I tend to guide and help her through resources and ideas, not advice.

Explaining things that I have done or techniques I have practiced in my own personal finances, pointing out various pros and cons, and noting ulterior motives that people might have when it comes to her money and how she invests is often enough to help her make informed decisions. Explaining that it's easy for her retirement plan advisor to make suggestions and tell her to take more risks with her investments since it's not his money helps her keep his advice in prospective. Sometimes just explaining what I would do and how I would go about doing it is enough to help her make a decision...but I always let her make the decision. Probably the only thing I've ever told her to do outright was pay off her house -- and boy, is she ever glad she did! She likes having that monthly payment off the books especially with retirement looming.

Focus Areas

So what types of areas do I help my mother focus upon when it comes to her finances and retirement planning? Well, it often depends on the questions she asks me or the topics she brings up in our conversations. The majority of the time, we discuss things like social security and when she is going to retire, as well as the amount she will receive and how and to what she plans to apply that money during retirement.

We discuss how her retirement portfolio is doing and how it is diversified. We also talk about the various expenses she'll encounter during her retirement as well as estimated totals for those expenses. And finally (and she probably likes this part best), we mull over what types of activities she wants to take part in during retirement as well as the traveling she'd like to do.

The great part about this portion of our discussions is that some of the things she is interested in participating in during retirement are also income boosters. Activities such as selling things on eBay, renting a spot at a local art gallery for the pieces of art she makes, as well as renting a spot at a local antique mall to sell off some of the many items she has collected throughout her life are things that she enjoys doing and that can help her make a extra few bucks in retirement at the same time.

More from this contributor:
6 Ways to Keep Your Elderly Loved One's Money Safe
Plan Your Path to an Early Retirement
Lending to Friends? Beware!

Disclaimer: The author is not a licensed financial or retirement professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is at the reader's discretion.