How to Help a Low-Income Relative Plan for Retirement

When someone doesn’t have a lot of income, retirement can be very scary. They may worry that the little money they have now to support themselves won’t be able to help them when they cannot work anymore. As a relative of a low-income relative, it can be difficult to see them tackle retirement planning alone. Helping them create a good retirement plan can help them have a self-sufficient and comfortable retired life.

Maximize Income

During retirement, your relative will have a very set income because they will no longer be working. Whatever money they have will come from savings or social security. To make the most off of social security, they should strive to work for 35 years or more. 

Social security benefits are determined from 35 years of a person’s highest income. Therefore, if your relative works for 35 years or more, there will be a better chance that their benefit will be greater.

Sort Out Healthcare

As your relative reaches retirement age and beyond, they will probably experience more health problems. This is because older bodies are not as strong as before. Serious health issues during old age can be very expensive and hard to budget, especially if you are on a tight stipend. Luckily, Medicare and Medicaid can help low-income American citizens. Both Medicare and Medicaid can help pay for end-of-life care. This will help reduce the amount of debt accrued and passed on to surviving loved ones at the end of your relative’s life. 

Help Them Save Money

Social security should be able to provide for your relative’s basic needs once they are retired. It is always nice, however, to have some additional money in case of emergency or need. If your relative has money saved away when they are retired, they can use this in addition to social security funds. To help your relative save money, you must first have them write out a clear budget. Once you both see what their actual income and expenses are, you can assess which areas you can cut from to save money. 

No one wants to see their relatives struggling financially now or during retirement. By planning with them now to avoid such struggles, they can have much more stability during retirement. Helping a relative with financial planning can also help offset the responsibility that might fall on you during later years if they are sick or accrue a lot of debt. 

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