Reply to I’m young (27) and my parents (60 & 61) have told me that the will “never be able to retire”

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Reply to "I’m young (27) and my parents (60 & 61) have told me that the will “never be able to retire”"

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[quote=Anonymous]They have no debt and they have some assets. That's really not bad.

They should figure out what their SS payments will be, and then consider downsizing their house in order to capture some of the value to put in with their savings. For instance, if their house is worth 400k and it's a 3-4 bedroom, they should consider moving to a 2 bedroom condo in the same community, paying maybe 250 or 275. Then they bank the difference. Factor any condo fees into monthly costs and ensure SS will cover it. Condo fees are often worth it for older people because they usually cover building maintenance, garbage, sewer -- things that an older person might not want to manage themselves.

If selling their house doesn't make sense, they should just sit tight and figure out a budget using their SS payments. Without a mortgage this might be easier than you think. I would encourage them to identify what luxuries are important to their mental health (eating out once a week? taking a beach vacation once a year?) and building that into the budget, even it if means pinching pennies elsewhere. That stuff makes life worth living.

I also would recommend talking to a financial manager to figure out how to maximize the savings they have now. They need to be conservative because of age, but there are things they can do with the $400k that will net them better returns than just leaving it in a savings account, without risking losing it. Even just making out I-bonds or investing in a Roth IRA now while they still have income could get them better returns.

Also, with no mortgage, even just working a job 5-10 hours a week, maybe in a retail store or something similarly low stress, can make a huge quality of life difference. There are benefits to going to a job which pushes you into a schedule and ensures you talk to other people. And if you made an extra 600-800 a month, that could be your money for going out to eat, going to the movies, taking a couple extra vacations, etc.

It's honestly not as dire as you think, OP.[/quote]

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