Parenting our Parents

Financially supporting our parents-the Difficult Conversations

The Self Reliant Retirement Era is here (to stay)

Last week several media outlets announced the looming run out date for Social Security. The annual Trustees of the Social Security and Medicare trust funds report confirmed that by 2033 the program will run out of cash needed for full payments. This will affect key programs such as the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, and the Disability Insurance (DI) Trust Fund, which pays disability benefits. Based on the projections, there will only be enough funding (from taxes) to pay 78% of scheduled benefits of these programs. Either taxes, employment, and salaries will have to increase, or a major overhaul of how the US cares for its aging citizens will have to occur.


This is bad news, especially for those of us with parents for whom social security was an anticipated source of retirement income supplement. Because let’s be real, whatever the anticipated SSI figure was, it will not be sufficient to cover our parents’ cost of living in retirement. Considering that folks are living longer, that climate change will make certain places less livable, and that with aging come physical ailments– every retirement dollar is going to have to stretch farther. This is critical for Latino households. We (or our parents) have substantially lower retirement savings than white households, with four out of five Latino households having less than $10,000 in retirement savings, compared to one out of two white households. While we know the racial wealth gap exists–the retirement savings gap is woefully neglected.


Enter: Cases where we are our parents’ retirement plans.

As a first-generation Latina, this became real for me when my dad passed away after 8 years with Alzheimer’s and hit me hard during the pandemic when I began running the numbers with my mom. It is one thing to become intimate with your own financial health…What’s your net worth? Are you contributing enough to your 401K? Can you max out a Roth IRA? Factoring a parent’s future retirement with dignity and joy — that can be a huge challenge, both emotionally and mentally. It takes a lot to have a serious conversation with the person who housed you, fed you, and helped you become a fully-fledged adult, about their own financial success post-employment.


While it is not easy, Jannese, host of the Yo Quiero Dinero podcast lays out an excellent roadmap for self-reflection and for engaging in the hard conversations with both siblings and parents. It’s critical to understand what your needs and your parents’ needs are, and will be, in order to effectively prepare. Conducting a family financial audit is critical, and coming up with tangible goals is of the essence to address the anxiety associated with aging parents.


In addition to understanding where your parents are financially, it is essential to also pay attention to things like:

  • Cost of health care, and the specifics like medical procedures (including surgeries) and associated rehab
  • Cost of long term facility care versus live in home health aides versus you or your sibling leaving the workforce to care for a parent
  • Life insurance policies and their associated conversion deadlines
  • Their desires and how they would like to spend their golden years


An ever-evolving Progress

While the big things, like your target savings numbers and insurance policies, can be set and generally made permanent, life is not without surprises. These conversations must be had periodically, and consistent, honest communication is key. Here’s to having the hard charlas, even if it means doing it scared!

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