“There is no place higher than on Daddy’s shoulders” goes a saying. As a daughter or a son, you have had your high moments with your parents as they nurtured you to become what you are today. Now, you have an opportunity to shower back the love and support you received unconditionally. Instead of the usual ephemeral gift, perhaps offer your parents to help out financially.

Analyze their Finances

Help your parents by getting to know their state of finances. It’s likely that they will wonder if their children are getting apprehensive about the inheritance status. That’s where you need to keep the communication lines open and assure them that it will benefit them in the long-run. Look at their income stream and categorize their expenses under various heads – housing, utilities, healthcare, food and groceries, personal care, entertainment and debt. Look for trouble spots, if any.

Bridge Gaps 

If they are spending more than their earnings, look at ways to enhance their income or cut down on unnecessary expenditure. One of my friends found that his parents were spending a lot on medicines – about Rs 8,000 a month. He immediately took responsibility for it and started buying it from an online retailer at a discount of 25%. Similarly, grocery and shopping bills were slashed through smart internet shopping.

If there are trouble spots in their spending patterns, point it out.

If still there are budget gaps, look at ways to unlock property value. If they own multiple houses, ask if they would like to sell one of it to prop up their retirement corpus. If they own a single house, ask if they would like to give it on rent, while they move to your home or an affordable place nearby.

Retirement portfolios are often debt-based with little to no exposure to equities. However, with at least 15-20 years to last, one should consider equities. While the major thrust should be on safety and liquidity, the portfolio should also have the ability to beat inflation.

Check your Affordability 

If you are not married, consider taking ownership for some of their household expenses. If you are married, calculate how much money you would need to fund your living expenses, save for retirement, and other goals like children’s education. Whatever portion of money is left can be utilized for supporting your parent’s finances. Ensure however that you take your spouse into confidence before you go ahead.

If you are not fully able to support, join hands with your siblings.

Maintain Investment Discipline – Automate your investments aimed towards various financial goals by starting SIPs in relevant funds. Pay off costly debt – credit card, personal loan, car loans. If your financial standing is good, it will give them the necessary confidence. 

Go for a Portfolio Overhaul if needed – Check the retirement kitty of your parents and if it’s sufficient to pay off expenses considering their current lifestyle – for at least the next 20-25 years. 

Retirement portfolios are often debt-based with little to no exposure to equities. However, with at least 15-20 years to last, one should consider equities. While the major thrust should be on safety and liquidity, the portfolio should also have the ability to beat inflation.

So, convince your parents to consider inflation and invest a portion into equities so that their current lifestyle is not compromised. However, protect your parents from frauds and investment scams that prey on the less aware and the vulnerable.

Build an Emergency Fund

A sudden bypass surgery or a knee replacement could quickly dent a retirement corpus. Ensure you are building an emergency fund that can take care of big-ticket expenses – be it medical, house or a car repair. These funds could be parked into liquid or short-term debt funds.

In the end, remember, it is not just the financial support that makes a difference. Set aside time to talk to them as well. After all, even if they need it they won’t ask for it.