A few weeks ago, we covered a trending topic in the news – the growing rate of seniors entering retirement in debt – and this week we thought we’d follow it up by discussing the issue of talking about financial restructuring with aging parents. None of us want our parents to struggle financially, especially in their retirement years, but the conversation can be a difficult one.
As of this year, Canada has more people over the age of 65 than under 15. The age group that now encompasses the baby boomer generation – 50 to 69 – makes up 27% of the Canadian population. That is a vast segment of the population set to retire shortly, or already enjoying retirement.
Talking to aging parents can be tough because, while they used to take care of you, there is often a role reversal at some point in life and you will likely come to take care of them. Talking to a parent about their debt can be humbling. In cases where you have a parent who doesn’t have assets and is in debt, it is a delicate topic to bring up – but one that really should be covered to improve their overall wellbeing.
One thing that you have to think about as far as debt in retirement is that debt can be a burden, so while this may be an uncomfortable topic, your parent is living with payments looming over their head each month. This is especially true for those on smaller fixed incomes.
There is no shame in looking at financial restructuring strategies to help your parent better meet their financial obligations. Instead, doing so often allows for a greater understanding and acceptance of what may be troublesome and an opportunity to fix the things that may be causing them stress.
The route you go depends on your parent’s personal financial situation. For example, if your parent owes more than they can pay back and is having difficulty managing their monthly payments, a good first step is to speak with a Licensed Insolvency Trustee. A Licensed Insolvency Trustee can look at their overall financial picture and make strong recommendations that include solutions to reduce your parent’s debt, interest and payments.
If your parent has investments or equity locked up in assets and owes far less in debt than the available equity, perhaps you need to pursue avenues to unlock that equity and consolidate.
Everyone’s situation is different, and the best solution is one that is based on a careful consideration of all the facts. What you can do is start the conversation. Starting the conversation will help your parents enjoy a better financial situation in retirement. Giving them information about the resources available and helping them to access those resources is a great way to start!
At Spergel, we understand how uncomfortable this conversation can be, but we can help make it easier.
To discuss strategies for financial restructuring, please get in touch with us today. Call 310-4321 for a free consultation.