What To Do When Your Parents Have No Retirement Savings

Too many of us wait to talk to our parents about their finances until it's too late. Imagine this scenario. One of your parents takes a fall. They are rushed to the hospital. They have surgery. A nurse walks in to discuss some of your options, but your parents, of course, are too groggy to respond. And on your mind, you want the best for them. And you're also thinking about the financial ramifications. How are we going to cover it? What do my parents even want? But when it comes to their money, You can't access it. You are not legally allowed. There's two-factor authentication rules, signature matching rules. You call the bank and they won't let you in even though you are following your parents' wishes. A similar situation happened to Beth Pinsker, a financial journalist who just released her new book dedicated to helping people walk through the difficult realities of caring for aging parents. Now, I've spent 20 years helping millions of people take control of their money. I've got multiple New York Times bestselling books and even a Netflix show. But this topic, this topic is something that is hot on people's minds and we don't know how to handle it. So today in this video, we're going to break down the exact conversations, documents, and strategies you need before something like this happens to you, including the 3 legal must-haves that most people skip and they wish they had done earlier. How to talk to your parents about their money plans without them becoming defensive, and the real reason why most parents' financial plans are out of date and how most of their documents will not hold up when they most need them to. So let's jump right in, starting with the first thing I want you to remember. Don't wait for a crisis to start these conversations. The biggest mistake that families make with aging parents and money is waiting to talk about it until it's too late. Here's what happens. Maybe mom falls and breaks her hip. You rush to the emergency room. The doctor walks in, says she needs surgery, followed by 24-hour care. That's when you realize you have no idea where her important documents are. You don't know her bank passwords. You can't access her accounts. And your siblings are calling you asking what the plan is. You are making six-figure decisions at 4 a.m. while your mom is on medication, and probably you haven't slept in a long time. But there is a different way. Having conversations earlier does give you more options. So how do you start these conversations without your parents shutting down? First, start small. Don't try to solve everything in one conversation.

I have a friend who I talked to for this book, couldn't get his mom to move anywhere on this topic. Then she made a mistake and she had to come to him to help fix it, and she messed it up. And he said, you know what, I can help you with this. I'm, I'm good at finances. Why don't you let me take over this one task for you and then we'll see how it goes.

If you can find one task, one little point to connect on that can open the door to everything else. So you don't have to try to force it all in one conversation. This is a process. You will be talking about this for a long time. That should give you a big sense of relief. Ah, I don't need to get every answer today. I just want to open the door. Second, use curiosity as your entry point. You might be hanging out with your family during the holidays. What if that presents a natural entry point to digging deeper about what your loved ones want?

One thing is to break out the family photo album, express some curiosity about the family history, and it's a great way to get somebody talking and also preserve some memories. Get out the the video camera or your phone or whatever and, you know, ask about stuff. Ask about the people in the pictures. Ask about the tchotchkes on the mantle. I want to tell people, just ask questions. Just get them on video looking at pictures, telling you who the people are in the really, really old ones. You know, people talk about that sort of stuff. You know, that's Grandma Jo. Where is Grandma Jo buried? How did you deal with it when Grandma Jo died? You know, what's going to happen then when, With you, are you going in that same place? What do you want to have happen to you? And when they start telling those stories, you spin them forward.

And I'll show you the exact word-for-word scripts that you can use later in this video. Third, lead with vulnerability. Here's a script that works to open up these conversations. You might say something like, you know, I was talking to my friend the other day and their mom actually had a fall. They didn't have any idea where her important documents were. And it made me realize, if something happened to you, where would I even start? Or let me give you another approach. This one is more curiosity-driven. Hey, I want to talk about something, and I know it might be a little uncomfortable, but I've been thinking about if something happened to you and if it was hard for you to live alone, what would you want? Have you ever thought about it? Would you want to come live near me I've realized I've never really asked you what you want. And I want to point out a couple of things in that script. Notice that first phrase, I know this might feel uncomfortable. There is a lot of power in acknowledging the elephant in the room. In other words, don't be weird. If you are going to talk about an uncomfortable conversation, sometimes just naming the feeling diffuses that and lets everyone go, ah, this is weird. Okay, now let's get to it. Then this last part of the script, I realize I've never actually asked you what you want. Why I really love this script is you are telling your parents why you are asking, and the answer is you care about them, and you are admitting you haven't been curious about this in the past, but you are now. It lets you open up this conversation in a really beautiful, connective way. So preparing for these conversations before you need them is incredibly powerful. But having these conversations is just the first step, because even if your parents agree to talk, you can very easily find yourself locked out of the decision-making process and actually unable to help them execute their wishes. Let's talk about how to change that. Before we dive into the next section, think about what you are doing right now. You're actually stepping up, asking hard questions. You are trying to protect your parents and yourself before a crisis hits. One day your own family, especially your children, could be in your position, and they will either have clarity or they will be left guessing. If you want to make sure they are taken care of, not scrambling for answers, not scrambling for money, there is one simple step you can take right now. And that's where today's sponsor can help. Fabric by Gerber Life is term life insurance you can get done today. It's made for busy parents like you, all online on your schedule, right from your couch. You could be covered in under 10 minutes with no health exam required. And the best part, Fabric has flexible, high-quality policies that fit your family, like $1 million in coverage for less than $1 a day. Even if you have life insurance through your employer, it may not offer enough protection for your family, and it can disappear the moment you leave your job. Fabric follows you wherever you go. Plus, there's no risk. There's a 30-day money-back guarantee, and you can cancel at any time. So if you've got kids, especially if you are young and healthy, locking in low rates now may be one of the smartest moves you can make for your future. Join the thousands of parents who trust Fabric to help protect their family. Apply today in just minutes at meetfabric.com/RamitSethi. Now let's move on to our second recommendation for working with aging parents. The 3 documents you need before anything happens. Now, you might think, hey, they're my parents. If something happens, I will make the right decisions for them. You're their kid. Of course you can access their accounts and you can tell the doctors and the banks what needs to happen, right? Wrong. The harsh reality is that without the right legal documents, institutions can treat you like a legal stranger to your own parents.

You need legal documents in order to help them. You can't just walk into a bank and take care of your neighbor's finances. And in the same way, you can't take care of your parents' finances that way either. They are legal strangers to you. Yeah, so that moment came for me of hitting that brick wall of no from the legal and financial system 4 days into caregiving. My mom had an operation on Tuesday. On Friday, the caregivers needed to be paid, and my mom was just out of surgery. She couldn't lift her arms, she couldn't sign anything, and I had sitting there with her checkbook and a pen saying, you know, what do I do? Do I take her hand and ink out some kind of signature. Banking system is so sophisticated these days. They have signature matching, they have voice recognition on the phone calls, they have two-factor authentication on everything. You can't just pretend to be somebody anymore in this day and age. It just doesn't work. I didn't know what to do and I was stuck.

Here's what Beth learned the hard way, and this actually will save you years of pain. You need 3 things in place before anything unfortunate happens to your parents., and if you wait until something happens, it might make it much more difficult, sometimes impossible, to actually help them. Here are the 3 things you need to secure. The first 2 are durable power of attorney and a healthcare proxy. Power of attorney allows you to legally make financial decisions for your parents, and a healthcare proxy allows you to make decisions that are medical in nature. Here's how Beth breaks it down.

If I should become incapacitated, you you know, I want my son or daughter or whomever to be able to do things for me. Say mom has dementia and you need to— far along into the illness, you need to put her in a nursing home. So if you're power of attorney, you can sell that house for her and use that money to pay for the nursing home. But if you don't have that document and mom has dementia and can't make that decision, you're going to have to go to court to do that. There's no other way to do it. And then you have to be accountable to the court until the person dies. So this is kind of like you can download this thing for free from the internet, or you can pay $18,000 and go to court and spend a year of your life dealing with it.

Once you get these two documents in place, you can make financial or medical decisions for your parents if they're in a situation where they can't do so themselves. And in case this sounds scary for parents, doing this does not mean signing your rights away. These documents are based on specific conditions that parents set up.. And until those conditions are met, it is 100% their decision, not their children. Look at this. Look at this finger. I was cutting a bagel the other day. I cut my finger. I had to put one of those Band-Aids around it. You think I'm going to sign away my rights to some kid just because I cut my finger? No. By the way, that bagel was delicious and it was worth the bloody finger that I incurred. Apollo's Bagels, love you. So remember, parents, don't worry that you are signing away all of your decision making. You set the terms of when these documents kick into play. Now, the third document you need to set up is giving yourself access to your parents' phones through something called legacy contact.

If you don't know how to access a person's phone, you're going to get stuck. It's another hard no. It's another absolute brick wall. The FBI can't even get in to unlock phones. And just knowing the code is not good enough, because think about your parents and their memories and their abilities with technology. They could change the phone code and not even know. You need to have a way to get into that phone, uh, whether they know how to get into it or not. And there's a little feature on phones today called a legacy contact, which is basically like assigning a beneficiary to your phone like you would a bank account. And you can name somebody, uh, very quickly in your settings, and if something should happen to you, it kicks out a QR code, and all they have to do is scan that QR code and it gives them the instructions for what to do next.

This is really important. Your parents' phones have access to so many other things, their email, two-factor authentication, all of it. So here's exactly what you need to do today. First, get the durable power of attorney and healthcare proxy. Get your parents to sign them, get them notarized at a bank or a pharmacy or even online, and they are good to go. And if your parents already did these, but they did them 10 or 15 years ago or in a different state, make sure they are still valid. Second, enforce your documents at the bank. Bring them to the bank, make sure they are in the system. Third, set up legacy contact on their phone so when you need to, you can get into their device to retrieve their medical information, their contacts, or their two-factor codes. Fourth, store all the key documents in one clear place and make sure that a sibling, if you have one, has both a digital copy and a physical backup that they can grab fast. I know that this might seem like overkill. I know that it might seem like I'll deal with this later, but just imagine when an emergency occurs where you need this material. You will thank yourself. Now, you know you need to get these documents in order for your parents, but what about for your own situation? Here's the truth. You can't take care of your parents if you haven't taken care of yourself first. And most people, when it comes to money, are flying blind. They're guessing about whether they've saved enough. They're overwhelmed by investment options. They're not even sure if they should pay off debt or invest more or how to invest. Does any of this sound familiar? This is exactly why I created my money coaching program so that you can take control of your money fast. Inside the program, I'll walk you through building your complete financial system in just 48 hours. Not someday. Not when you have time to figure it out. This week, you'll get live calls with me to get your specific questions answered. You'll get access to a community of people who are building their rich life, not just playing small and being frugal about everything. And you'll get a step-by-step plan for investing and paying off debt and getting your money working for you. Because here's what I've learned after 20+ years of helping people take control of their money. The people who are best able to help their aging parents with money are the ones who already have their own financial house in order. I don't want you to be panicking about your retirement while trying to figure out what to do for your parents. I don't want you to have to be making choices like, should I save for my kids' college fund or help mom or dad? If you want that kind of clarity and you want that kind of confidence with your money, Scan that QR code here or click the link below to join money coaching today. Give yourself every advantage to live a rich life. Let's get your financial plan locked in so you can handle whatever comes next for you and your family. That leads us to the next part. Find out what your parents actually want. Do you actually know what your parents want? You might think you do. Your siblings might as well. But have you really asked in a way that allows them to be honest, or has everyone just made a lot of assumptions? So imagine asking somebody, what would you do if you were unable to take care of yourself? That's a really scary question, and many people, especially as they get older, prefer to avoid it. But in this case, we can't allow that to happen. We simply can't. We have to press gently, but we have to press so that that person who is of sound mind can make their decisions now before they might be unable to make those decisions. So when the time comes to make a decision, whether it be moving into assisted living or selling the house or what kind of medical care they want, everyone has a different opinion. And you might be dealing with siblings who perhaps are not speaking to each other. One may have not visited home in years. Somebody might second-guess every decision. And of course, there is the guilt about whether you did the right thing.

Knowing what my mom wanted was pretty much the only comfort I had in the entire process of taking care of her, because I didn't have to second-guess myself.

Your parents probably want agency. They want to feel heard. And I guarantee most of them have never been asked what they actually want. But they're adults. They have clear preferences. You might just have to gently pull them out. They haven't had the opportunity to express them., and those preferences may surprise you. Here's how Beth handled her mom's passing.

She was in a great deal of pain. We had to make decisions about the kind of care that she wanted and what she was able to endure. And, you know, she didn't have cancer, she didn't have heart disease. Like, there was no one thing that was dragging her down. You know, there's this mentality that a lot of people have where you want to just keep fighting. She didn't want to do that because she knew what was happening in her own body. It was up to us to respect that.

This kind of clarity is only really possible when you dig deep and you get curious about your parents' real wishes. Without that, you might be making some of the world's hardest decisions without knowing if you are doing the right thing. So let's talk about how to be crystal clear about your parents' wishes beyond just the legal documentation. When you use the scripts that we talked about in the first section, consider turning those conversations into something more permanent. Grab your phone, hit record, ask your parents about the photos on the kitchen counter. Ask them who's in those old pictures. Ask them why they've saved this item in this drawer. What does it mean to them? Here's what Beth learned the hard way.

One thing my brother and I faced when we went to clean up my mom's apartment is that we didn't remember whether some of the stuff was important. We didn't know the stories behind it, where it came from, who whose it was first and that sort of thing. And so we didn't know how to value it or cherish it or what have you. There would be stuff that we remembered from our childhood next to stuff from Target, you know, and it just made no sense to us. And so what we had been planning on doing all along was videotaping my mom telling these stories. That's the one thing we ran out of time.

These informal recordings become invaluable when you're trying to understand what really matters to your parents later on. And write down what you learn. Share it with your siblings. This isn't legally binding, but it can create a really connective framework for bringing you all together and for making decisions together. Next up, get your siblings on the same page now. You know, one thing destroys families faster than almost anything else when it comes to aging parents: assumptions. Assumptions. I assumed you'd be the one to pay since you make more money. I assumed you'd move back home to take care of them since you don't have kids. I assumed we'd split everything 50/50. These assumptions just sit there dormant until suddenly there's a crisis, and then they explode. If you are watching this video, you are probably the responsible one in your family, the one who makes sure things actually happen. How much of that sounds true? Probably a lot of you are. But the identity that you have probably has to shift from peacemaker, your current identity, to agitator.

You know, this whole estate planning thing and managing money is everybody's own problem on their own. You know, will mom have enough money is like you think, oh, that's her problem. But really it's your problem. And you need to know if you're the one that's the— that they're going to call in an emergency. If the hospital's going to call you, then it's your responsibility. You're the one that's going to be left holding the bag, and so you're the one that's got to be the agitator.

Are you ready to adopt the identity of potentially being the agitator, asking questions that are almost certainly going to create uncomfortable conversations? Are you ready to take that role on? Imagine you've been wearing the same shirt your entire life, and now you have to take it off gently, put it aside, and say, it's time for me to take on a new role. Somebody has to lead, and that somebody is probably you. Here are a few things you need to do to get your siblings on the same page before something unfortunate happens. First, create a family map. Sit down and literally write out who you are responsible for— your parents, your in-laws, the aunt who may not have children, the neighbor who who's always been like family, and then share it with your siblings. Hey, here's who I think we might need to help at some point. Who am I missing? Would you change anything? Second, clarify roles and expectations. Now have a conversation with your siblings about what each of you is willing and able to do. For example, you might ask, can you contribute financially? Can you contribute time? Can you manage the legal documents? And then here's the key. Put it in writing. Send an email after the conversation summarizing what everyone agreed to, because 6 months from now, when emotions are high, people will remember things differently. So before we talk about what you are actually responsible for financially when it comes to your parents, let me ask you something. How many times have you watched a video like this and you felt motivated to take action? Maybe you left it open in a tab in Firefox and then life gets in the way. Here's what I've learned. The people who actually change their financial lives do not just watch one video and move on. So if you want to keep getting these word-for-word scripts and systems that you may have never heard about, hit that subscribe button right now and turn on notifications. Now, if you are thinking to yourself, am I responsible for my parents' finances? Well, let's talk about it. Maybe your parents have no savings and you're terrified you'll have to choose between taking care of them and your own family. Okay, let's slow down and let me show you what you are actually responsible for. You don't have to bankrupt yourself for your parents. You might be taking on way more responsibility than you actually need to when it comes to financially providing for your parents. Well, here's what you need to know. First off, you are not legally required to support your parents. There is no law that says you have to bankrupt yourself to take care of them. And in the United States, we have safety nets.. We have Social Security, Medicaid.

There are other options for long-term care, so they won't become destitute and homeless in the U.S. It's harder and harder these days because of cuts to Medicaid, but they won't go homeless. They're— they are entitled to Social Security, first of all, if they're U.S. citizens and they paid into the system. They are also entitled to Medicaid if they are truly out of assets. If they need nursing care, they will end up in a nursing facility. And for all of you out there worried about your parents who don't seem to have enough, I would say first of all, get some reality on the picture of how much they actually have, because they might have enough. It might not seem like they do, and it might seem scary because they have one pile of money and they have to make it last, but people tend to make things work somehow.

And there might be benefits that your parents aren't using or aren't even aware of. Here's an example. Beth told me about someone who had never signed up for their VA benefits as a veteran. He served in a war but didn't feel like he was eligible.

I was like, that's crazy, you served in a war, that money is there because you served your country, go sign up for it right now. And they read the chapter in my book about VA benefits and they went and signed up for it. And then right after After that, he got sick and now he gets a stipend, a monthly stipend from the VA and 16 hours of a home health aide per week.

They're, they're set now. There are a lot more options for your parents than you might think before they tap into their remaining finances or you tap into yours. First off, calculate the reality. What income do your parents have? Do they have Social Security, a pension, any investments? What are their actual expenses? Housing, food, medical care? Get the real numbers. And if you've watched my videos and my podcast, you know that most people don't even know this for themselves. So asking your parents to pull these numbers, you might need to give them a little bit of help. That's okay. You might find out, surprise, that they have more than you think, or you might find out that they have far less. Either way, you need to know the numbers. Second, use your parents' savings for their care. If you or your siblings find that your parents have savings set aside, use it.

That's what it's there for. Your parents' savings are there to take care of them. You can spend that money on them, and they can spend that money on their own care, and it's okay for that pile to dwindle. That's what it's there for. And sometimes siblings fight because that money starts to dwindle and they realize that it's going to go all the way to zero and there's going to be nothing left for them as an inheritance. And you know what? Too bad. That money is for your parents. Their savings.

It's not for you. But the worst time to do this, to make these big decisions, is at 2 o'clock in the morning when you can't sleep, or right after a phone call with the doctor. Wait until you're calm, wait until you're well rested to look at them. Third, state your capacity clearly to your family. Let them know how much you are able to help them. This money could go towards them traveling. More likely, it could go towards things like healthcare, and you want to let them know how much you are able to contribute. What this does is it actually puts some of the onus back on them to try to figure out what their plans are. Here's a word-for-word script that you can use. I really appreciate that we've been able to have these conversations about money. Based on what you told me, here is what we can contribute each year, and this number is based on our income and our expenses and our financial goals. So we can give $11,000 per year. That's what we're able to do. And you can use that money however you want. And fourth, research what benefits your parents might qualify for. For example, VA benefits if they served, Medicaid if they are truly out of assets, Social Security if they haven't claimed it yet. These are not handouts. This is money that they have access to and they should take advantage of it. A lot of this can feel overwhelming. We're talking about legal documents. And uncomfortable conversations and sibling dynamics. It's a lot. Here's what I want you to understand. You don't have to do everything at once, and you do not have to be the sole person doing it. Some of this responsibility is your parents, your siblings, but you probably have to be the person to lead it. Again, you don't have to have all the answers today, which leads us to take one step in the next 24 hours. I completely understand that you don't want to do this. This stuff does not seem fun, and I love talking about money. But the problem is that's what leads to situations where something suddenly happens and you've got zero access to your parents' accounts and you have to scramble. Our natural tendency is to say, I'll deal with this later. Don't do it. Don't let complexity overwhelm you.

Here's how Beth put it. Just that there's a solution to everything. Like, there are no stumbling blocks that cannot be taken apart. You can get through all of this somehow. It might be a huge slog, but it's all doable. I had to do all of it. I know how hard all of it is, but I got to the other side of it and it's all achievable.

All achievable. It's not easy, but it is achievable. So instead of getting stuck, I suggest you do just one thing in the next 24 hours. Send a text message to your parents, ask 'em a question, set up legacy contact on a phone. Review a document or schedule a notary. One step creates momentum and momentum starts to build on itself. So here's exactly what to do. First, take a look at the checklist here. Make your own list. What do you need to do? Write it down right now. It doesn't have to be perfect. Just start writing. Second, pick one task from that list and do it in the next 24 hours. You don't have to do everything. Just pick the most achievable task. Get it done. And third, bring your siblings into the loop. Send them a text or an email. Hey, I've been thinking about what to do as Mom and Dad get older. Things like their healthcare, their finances. I just set up legacy contact on Mom's phone. Have you done this yet? Here's how. And fourth, set a reminder in your phone to revisit this annually. Once a year, check in. Are the documents still current? Have your parents' wishes changed? Do your siblings still agree on the plan? A year from now, you're going to be a year older. Your parents are going to be a year older. And I promise you're going to wish you had started today. And if after starting this process, you start to wonder if your retirement is actually on track, then all you need to do is watch this video to identify what level of financial freedom you're at today and the exact steps to take next.