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  • Maybe after binge watching every episode of "Two Cents" you finally decided to make some big changes.

  • You looked your debts right in the eye and made a plan to pay them off in 10 years.

  • You budgeted your household spending, and even started setting aside funds for retirement.

  • For the first time in your life, you feel like you're really in control of your own future.

  • But there's still one financial storm brewing that might not be on your radar.

  • A money monster growing in your closet that even the bravest budgeter has trouble facing

  • your parents.

  • In many cultures, it's normal and expected that younger generations take care of their

  • parents in their old age.

  • But during 20th century America, pensions, social security, and other retirement plans

  • made it possible to remain independent throughout one's autumn years.

  • These days, however, with pensions in decline and stagnant wage growth making saving for

  • retirement even harder, seniors find themselves caught between cultural expectations of self-reliance

  • and economic reality.

  • More than a third of people over 55 have no retirement savings at all.

  • And only 13% have made any written retirement plans.

  • If you care at all about your parents' well-being, this could very well be your problem, too.

  • Unfortunately, as we've mentioned in a previous video, parents and kids don't talk to each

  • other about money very much.

  • It can be especially awkward when the roles are reversed.

  • Parents don't like to feel like a burden and kids don't like to think about their

  • parents needing help.

  • So it's very common for adult children to get blindsided by Mom or Dad's dire financial straits.

  • There are enough unpredictable money problems in the world.

  • This doesn't have to be one of them!

  • But it does mean that you'll have to find a way to initiate the conversation.

  • You could just blurt outHey guys!

  • Am I gonna have to support you at some point?”

  • Or, if you want a more delicate approach, you can start by asking them to create a “Just

  • In Casedocument, which outlines where their assets are located and the contact information

  • of any advisers or attorneys.

  • By going over such a document with them, you should start to get an idea of their overall

  • financial situation.

  • The best case scenario is that they're in great shape!

  • Their retirement is funded and they're even planning on leaving something behind for you

  • and your siblings.

  • Even in this situation, it's good to have the talk.

  • Plenty of families are torn apart by estate squabbles that could've been avoided with

  • clear communication.

  • Or perhaps your parents have enough to live off of--as long as nothing goes wrong!

  • In that case, you might offer to help them understand their Medicare options or shop around

  • for long-term care insurance.

  • If the situation is worse than that--and you are the only thing standing between them and

  • poverty--you have to consider what kind of assistance will be the most effective.

  • Direct gifts of cash are not always a good idea--they can create discomfort, and might

  • not even be effective if your parent has a historically troubled relationship with money.

  • Instead, think about what expenses you could cover for them, like groceries or rent or travel.

  • After all, they fed and housed and chauffeured you around when you were little, now you're

  • just returning the favor!

  • But before you commit any dollars, you've got to be sure you can afford it.

  • Amongst people who are financially supporting their parents, the average amount of non-mortgage

  • debt is $22,000.

  • And over one-fifth say their assistance is costing them their own savings.

  • Wrecking your own financial health to support your parents will only keep the cycle of dependency

  • going, and may someday put your kids in the same crunch you now find yourself in.

  • Like they say in those airplane safety videos, you've got to get your oxygen mask on first

  • before you help others with theirs.

  • If you're already struggling with your own debts, it's strongly recommended to find

  • non-monetary ways of helping.

  • You could sit down with them and help them write a budget (we made a handy video to get

  • you started).

  • You could volunteer to run errands or do chores for them.

  • Or--the big one--you could offer them a place to live.

  • 65% of seniors do not fully own their homes, so just eliminating their housing expense

  • could make all the difference.

  • If you find that your parents are deeply in debt, you'll have to judge whether it's

  • worth it to help pay them it off.

  • Creditors can go after estates, but not next of kin.

  • So if their debt is equal to or exceeds the value of their estate, there are

  • a lot better uses for your money than paying interest on loans that will may ultimately

  • be forgiven.

  • When things are this dicey, the best thing you can do is call in professional help.

  • A certified financial planner can look at all the pieces of this family puzzle and help

  • you draw up a plan to achieve three major goals: (1) ensure the comfort and health of

  • your parents, while (2) allowing you to keep paying off your own debts and (3) saving for

  • your own retirement.

  • Bringing in a third party can also help defuse tensions, so it won't seem like a you vs.

  • them situation.

  • After all, maintaining a positive relationship with your parents is still the most important thing.

  • It's unfortunate that talking plainly about money is taboo in America.

  • In a study done by Wells Fargo, 44% of Americans say that talking about personal finance is

  • harder than talking about politics, religion or death!

  • But it's precisely that fear that lets things fester in dark closets and eventually grow

  • into monsters that no one wants to face.

  • So do your folks a solid and bring the topic up earlier than you probably want to.

  • Let them know that you're on their team and want to make sure they're getting what

  • they deserve after a lifetime of hard work.

  • They probably helped you face your monsters as a kid, so consider it a privilege to help

  • them deal with theirs.

  • And that's our two cents!

  • Have you had "the talk" with your parents?

  • Let us know how it went in the comments.

Maybe after binge watching every episode of "Two Cents" you finally decided to make some big changes.

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