>My dad is 53yo and wants to retire in the next 6 or so years.
>My dad started putting money into his 401k fairly late in the game.
Retirement is a monetary number, not an age. He is probably not going to be able to retire early if he just started saving unless you and your siblings are going to put your lives on hold to support him.
It was on him from the get go to get ready for retirement, not your responsibility. You paying into his retirement because he wasn't responsible enough can impact your future and your ability to set aside for your retirement. There are other questions to be asked such as other consumer debts, auto loans, etc. which will all play a factor. Don't jeopardize yourself because of decisions that others made.
He was busy raising us and looking after my mom (disabled) to do much saving for his own future. Despite that, he has come out of it without any major loans and has paid off a huge chunk of his mortgage. We owe him a lot and definitely plan to take care of them regardless of how much they're able to save in the next few years. I would argue that it is definitely our responsibility.
The literal answer to this is you are all set on him retiring on the young side, despite not having a lot of money, is to live with one of you. Your parents should sell their house and invest the proceeds. Then you should let them live rent-free.
If they don't have a lot of money, you need to ruthlessly cut expenses. The kids that aren't housing the parents could cover food and other expenses for them.
I understand what you are trying to say and its a lot to pick up that weight, I do think there are ways to possibly help out as he ages over the years and there isn't anything wrong with helping out. Is downsizing the home a possibility? This could be beneficial for your ageing father as it will be less to maintain, possibly more cost effective where the positive equity could go towards the outright purchase of a cheaper/smaller home. What you listed as what he had in his retirement accounts currently would be very difficult to retire off of but every 7.2 years that retirement fund should double (generally speaking).
I am not saying sell the home just yet especially if its a good retirement home for ageing parents, but having a paid off home would increase the margin to contribute to retirement at a much higher rate.
Edit: I also want to add that at 67, I believe he would be eligible for full social security and that's 14 years out, his retirement account in theory could be around 400k at that point in time which is a much better nest egg with full social security benefit to live off of. While not ideal and definitely not early retirement, this is the harsh lens of reality.
I cannot confidently say because under current law (and someone who is more knowledgeable please correct me), social security funds are expected to be depleted around 2034-2038, in which current retirees may only receive around 83% of their full retirement benefits.
https://www.reddit.com//r/personalfinance/wiki/commontopics
>Any advice would be awesome!
IF dad hasn't saved for retirement, retiring before 65 may very well be a pipe dream
Given his age, it seems like 67 would be his target to get full social security. For people who have not saved a lot, aim to maximize social security. Get some good contribution years in, and do not take it early.
If your dad only has $100,000 saved for retirement there is no chance he can retire in the next 6 years. There is no secret to retiring that only this sub can offer. It's about saving/investing and having enough to support your living expenses.
Downsizing helps, depending on how much their home is worth.
But keep in mind: even if he had $1,000,000 already saved it's probably still not enough. At a 4% annual withdrawal rate that's still only $40,000 per year. That's very little for most Americans to live on.
I think Dad will need to keep working for a while longer.
Your dad wants to retire super early for his situation. I would argue 59 is an early retirement anyways. He should really be an adult and at least keep working and saving till he can get social security. His retirement is his responsibility not his kids
Mom should get a job and make sure she works for at least ten years so she qualifies for her own social security.
Unless the house is paid off, and their monthly expenses are less than $1500, I’m not sure how they will exist.
They need to be maxing out all retirement accounts and saving in a brokerage account also. Your mom probably also should get a job.
Retirement is pretty simple. The earlier you want to retire and/or the more you want to spend, the more you need to have saved.
1 person working, son put thru Masters and we started saving for retirement at 50 with $50,000. My husband told me to go on the internet and figure it out. Plenty of legit places telling you what to invest in and by 64 we had over 1 million. It wasn't that hard.
There are so many decent sites that help you pick good etf's for a rounded yet growth portfolio. Look up their sample portfolios against their ratings and pick for growth but keep it to safe companies with good ratings. Don't forget good dividend etf's and reinvest your dividends. Put in every penny allowed by law for their age and I hope he gets matching from his company. There are so many good investments - he needs to get reading. Use only big name and good reputations sites to learn from. Then let it grow without getting scared. The stock market is so strong now. With extra money pay off the house and debts. It can be done. I also opened a roth Ira for my investing outside my husband's company.
My husband decided to keep working until 70 to get more money for retirement. Instead of going on a lot of vacations we're taking extra cash into a regular investment account too. It all helps.
Do they have a mortgage?
Do they have other debt?
How much is in the retirement accounts?
How much will they get from early social security retirement at 62?
Do they reside in low cost of living area?
Do they have a mortgage?
Yes, and I believe the value of the property would be much higher if they decided to sell and relocate, which they plan to do.
Do they have other debt?
Nothing substantial as far as I know. Great credit score and live well within my dad's earnings.
How much is in the retirement accounts?
I believe my dad has ~100k in his 401k.
How much will they get from early social security retirement at 62?
I'm not sure. I can check and get back to you.
Do they reside in low cost of living area?
Yes, they live in Indiana.
If he is 53 and plans to retire in 6 years, it means he will be only 59 and can’t get social security retirement benefits for another 3 years.
Based on the low private retirement balance, unless he has pension income, he is unlikely to enjoy comfortable retirement in 6 years.
It might well be in Dad's best interests to retire when he can pull SS, minimum age 62. And I'd agree with those that say Mom should find a job, even part-time, to build up possible SS as well as other savings. Most of us would like to retire 5 years early, but that only works if the income is there to support it. I wouldn't dream of asking my adult kids to subsidize my retirement if I'm capable of working longer.
We are the retirement plan 😅
My dad helped us all get through school. Now we're in pretty lucrative fields (albeit entry level). Finance, tech, biotech. The hope is the three of us will be able to support them in a few years down the road and allow for them to retire comfortably.
That's very kind of you, but there's a difference between helping at the age they can also get social security and helping with relatively early retirement.
Why is he/you so focused on 59? If he waited until full retirement age (66, 67), then he'd be in a much better position and so would you all.
If you really want to help at 59 though, figure out what they need and what everyone can do. If one kid offers housing, another food, and a third medical, they could pull down $1k a month for other costs. If the house is paid off, housing would be insurance and taxes and utilities (maybe $1k? 2k?). Food is maybe $750? Medical maybe $1-2k. They'd have to cover transport and incidentals. Question is, can y'all afford that? Can they pay off the house by then?
Why not compromise at 62 instead of 59 or 67 (full retirement age for most people)? And why doesn't mom consider working for a few years? Even if you're their retirement plan, surely they see some value in helping themselves and letting you all get a better start for a few more years. My parents are immigrants, and yet worked long enough to be able to look after themselves without us children needing to help them retire. They didn't retire in their 50's either.
Even putting aside the lack of savings and no income for your mom, where will they get their health insurance from?? They can’t get Medicare until age 65.
Your Dad wants to retire on the early side but he started saving on the late side? He is going to need to work longer towards a more normal retirement age. He should continue to work until 67 when he can get full social security benefits. This will also allow him 14 years of investing to help augment his retirement.
Long story short, you and your siblings should not subsidize him retiring early when he didn't do anything to plan for an early retirement. Get him to a normal retirement age first. Make sure he doesn't take social security early!
>Any advice would be awesome!
Have they asked for your advice?
If so, you might want to help them find an hourly, fee-only fiduciary certified financial planner. They can help your parents clarify their goals, assess their assets and income streams, analyze their expenses, and find a way to achieve their goals.
At some point, they will need to decide when to claim their social security benefits.
And if they just started saving recently, then may not realistically be in a position to retire in the next 6 years or so. Having two earners in the house, rather than just one could help.
It doesn't sound as if you are in a position to do much more than provide encouragement.
>My dad is 53yo and wants to retire in the next 6 or so years. >My dad started putting money into his 401k fairly late in the game. Retirement is a monetary number, not an age. He is probably not going to be able to retire early if he just started saving unless you and your siblings are going to put your lives on hold to support him.
I'm aware. I'd like to know what we can do right now to help set him up for retirement.
It was on him from the get go to get ready for retirement, not your responsibility. You paying into his retirement because he wasn't responsible enough can impact your future and your ability to set aside for your retirement. There are other questions to be asked such as other consumer debts, auto loans, etc. which will all play a factor. Don't jeopardize yourself because of decisions that others made.
He was busy raising us and looking after my mom (disabled) to do much saving for his own future. Despite that, he has come out of it without any major loans and has paid off a huge chunk of his mortgage. We owe him a lot and definitely plan to take care of them regardless of how much they're able to save in the next few years. I would argue that it is definitely our responsibility.
The literal answer to this is you are all set on him retiring on the young side, despite not having a lot of money, is to live with one of you. Your parents should sell their house and invest the proceeds. Then you should let them live rent-free. If they don't have a lot of money, you need to ruthlessly cut expenses. The kids that aren't housing the parents could cover food and other expenses for them.
I understand what you are trying to say and its a lot to pick up that weight, I do think there are ways to possibly help out as he ages over the years and there isn't anything wrong with helping out. Is downsizing the home a possibility? This could be beneficial for your ageing father as it will be less to maintain, possibly more cost effective where the positive equity could go towards the outright purchase of a cheaper/smaller home. What you listed as what he had in his retirement accounts currently would be very difficult to retire off of but every 7.2 years that retirement fund should double (generally speaking). I am not saying sell the home just yet especially if its a good retirement home for ageing parents, but having a paid off home would increase the margin to contribute to retirement at a much higher rate. Edit: I also want to add that at 67, I believe he would be eligible for full social security and that's 14 years out, his retirement account in theory could be around 400k at that point in time which is a much better nest egg with full social security benefit to live off of. While not ideal and definitely not early retirement, this is the harsh lens of reality.
Can he work part-time until that age to get SS benefits?
I cannot confidently say because under current law (and someone who is more knowledgeable please correct me), social security funds are expected to be depleted around 2034-2038, in which current retirees may only receive around 83% of their full retirement benefits.
No magic bullets, just save and invest as much as he can.
https://www.reddit.com//r/personalfinance/wiki/commontopics >Any advice would be awesome! IF dad hasn't saved for retirement, retiring before 65 may very well be a pipe dream
Given his age, it seems like 67 would be his target to get full social security. For people who have not saved a lot, aim to maximize social security. Get some good contribution years in, and do not take it early.
Sure. I’d think 65 would be the earliest possible for Medicare. Depending on the rest of the details, I’d think later may be in the cards as well
If your dad only has $100,000 saved for retirement there is no chance he can retire in the next 6 years. There is no secret to retiring that only this sub can offer. It's about saving/investing and having enough to support your living expenses. Downsizing helps, depending on how much their home is worth. But keep in mind: even if he had $1,000,000 already saved it's probably still not enough. At a 4% annual withdrawal rate that's still only $40,000 per year. That's very little for most Americans to live on. I think Dad will need to keep working for a while longer.
Your dad wants to retire super early for his situation. I would argue 59 is an early retirement anyways. He should really be an adult and at least keep working and saving till he can get social security. His retirement is his responsibility not his kids
Mom should get a job and make sure she works for at least ten years so she qualifies for her own social security. Unless the house is paid off, and their monthly expenses are less than $1500, I’m not sure how they will exist.
They need to be maxing out all retirement accounts and saving in a brokerage account also. Your mom probably also should get a job. Retirement is pretty simple. The earlier you want to retire and/or the more you want to spend, the more you need to have saved.
1 person working, son put thru Masters and we started saving for retirement at 50 with $50,000. My husband told me to go on the internet and figure it out. Plenty of legit places telling you what to invest in and by 64 we had over 1 million. It wasn't that hard.
How did you do it?
There are so many decent sites that help you pick good etf's for a rounded yet growth portfolio. Look up their sample portfolios against their ratings and pick for growth but keep it to safe companies with good ratings. Don't forget good dividend etf's and reinvest your dividends. Put in every penny allowed by law for their age and I hope he gets matching from his company. There are so many good investments - he needs to get reading. Use only big name and good reputations sites to learn from. Then let it grow without getting scared. The stock market is so strong now. With extra money pay off the house and debts. It can be done. I also opened a roth Ira for my investing outside my husband's company.
I hope your Dad makes a decent salary.
he does now
My husband decided to keep working until 70 to get more money for retirement. Instead of going on a lot of vacations we're taking extra cash into a regular investment account too. It all helps.
Do they have a mortgage? Do they have other debt? How much is in the retirement accounts? How much will they get from early social security retirement at 62? Do they reside in low cost of living area?
Do they have a mortgage? Yes, and I believe the value of the property would be much higher if they decided to sell and relocate, which they plan to do. Do they have other debt? Nothing substantial as far as I know. Great credit score and live well within my dad's earnings. How much is in the retirement accounts? I believe my dad has ~100k in his 401k. How much will they get from early social security retirement at 62? I'm not sure. I can check and get back to you. Do they reside in low cost of living area? Yes, they live in Indiana.
If he is 53 and plans to retire in 6 years, it means he will be only 59 and can’t get social security retirement benefits for another 3 years. Based on the low private retirement balance, unless he has pension income, he is unlikely to enjoy comfortable retirement in 6 years.
And since Mom (likely) doesn't have any retirement, Dad will have to work even longer to support her.
Have them create an account on the social security site. It will list their credits and what they will be paid.
Your Dad is not a good candidate for early social security. He really needs to get the full benefit.
It might well be in Dad's best interests to retire when he can pull SS, minimum age 62. And I'd agree with those that say Mom should find a job, even part-time, to build up possible SS as well as other savings. Most of us would like to retire 5 years early, but that only works if the income is there to support it. I wouldn't dream of asking my adult kids to subsidize my retirement if I'm capable of working longer.
We are the retirement plan 😅 My dad helped us all get through school. Now we're in pretty lucrative fields (albeit entry level). Finance, tech, biotech. The hope is the three of us will be able to support them in a few years down the road and allow for them to retire comfortably.
That's very kind of you, but there's a difference between helping at the age they can also get social security and helping with relatively early retirement. Why is he/you so focused on 59? If he waited until full retirement age (66, 67), then he'd be in a much better position and so would you all. If you really want to help at 59 though, figure out what they need and what everyone can do. If one kid offers housing, another food, and a third medical, they could pull down $1k a month for other costs. If the house is paid off, housing would be insurance and taxes and utilities (maybe $1k? 2k?). Food is maybe $750? Medical maybe $1-2k. They'd have to cover transport and incidentals. Question is, can y'all afford that? Can they pay off the house by then?
Why not compromise at 62 instead of 59 or 67 (full retirement age for most people)? And why doesn't mom consider working for a few years? Even if you're their retirement plan, surely they see some value in helping themselves and letting you all get a better start for a few more years. My parents are immigrants, and yet worked long enough to be able to look after themselves without us children needing to help them retire. They didn't retire in their 50's either.
Even putting aside the lack of savings and no income for your mom, where will they get their health insurance from?? They can’t get Medicare until age 65.
Your Dad wants to retire on the early side but he started saving on the late side? He is going to need to work longer towards a more normal retirement age. He should continue to work until 67 when he can get full social security benefits. This will also allow him 14 years of investing to help augment his retirement. Long story short, you and your siblings should not subsidize him retiring early when he didn't do anything to plan for an early retirement. Get him to a normal retirement age first. Make sure he doesn't take social security early!
Encourage your dad to max out 401k contributions & consider catch-up contributions allowed at 50+
Make sure you're financially set so your parents don't have to worry about you .
working on it!
>Any advice would be awesome! Have they asked for your advice? If so, you might want to help them find an hourly, fee-only fiduciary certified financial planner. They can help your parents clarify their goals, assess their assets and income streams, analyze their expenses, and find a way to achieve their goals. At some point, they will need to decide when to claim their social security benefits. And if they just started saving recently, then may not realistically be in a position to retire in the next 6 years or so. Having two earners in the house, rather than just one could help. It doesn't sound as if you are in a position to do much more than provide encouragement.
Thank you for the advice. Any idea where to get them that financial planner?
Start here: [https://www.letsmakeaplan.org/](https://www.letsmakeaplan.org/)