Should Your Parents Work in their Retirement Years?

Working during the retirement years is not a subject that a lot of people want to consider. But if your parents will have few financial resources that will enable them to retire fully, working may be the only option. But it may not be as bad as it seems on the surface. How you present the idea to them can make all the difference in the world.

Why Your Parents May Have to Work During Their Retirement Years

There are a variety of reasons why your parents may have to work during their retirement years. Some have to do with a lack of preparation, but others have to do with the fact that times have changed, and some of the old retirement provisions just don’t exist.

Here’s some examples:

• Lack of a traditional pensions
• Social Security benefits aren’t as high as they expected
• Lack of adequate retirement savings
• Lack of adequate savings of any kind
• Too much debt

The last three reflect a lack of preparedness, however sometimes these are the result of major medical events, the loss of a job in the years leading up to retirement, or large costs associated with educating children.

Whatever the reasons for the lack of retirement income, it’s important that you are not too judgmental, and that you focus your efforts on pointing them in the right direction.

Framing The Silver Lining of Continued Employment

While it’s true that most people envision retirement as a time of not having to work at all, it’s more important that your parents are able to survive during that time. It’s actually not the worst outcome that could happen either.

Rather than emphasizing the fact that they won’t be able to retire, instead sell them on the idea of semi-retirement. This means that though they will have to work in order to survive, they shouldn’t have to work as hard as they did throughout their lives. They can still retire from their primary occupations.

This could be a matter of using continued employment income primarily as a supplement to Social Security benefits.

That may not give them all of the perks of the traditional golden retirement, but it should enable them to be comfortable and to have more time for leisure activities than they may have had in the recent past.

Encourage Them to Continue With Part-time or Consulting Work in Their Current Field

Generally speaking, the highest paying form of work will come from doing something similar to what they are doing during their careers. That would mean converting a full-time career into either a part-time job or consulting within the current field.

20 to 30 hours per week could be that they need in order to supplement their Social Security benefits. They can choose to work either so many hours per week, or even during busy times in their industry. That would leave them with short retirement periods in between assignments.

Encourage Them to Try Their Dream Career

Semi retirement may be the perfect opportunity for one or both of your parents to pursue their dream career. That can be an occupation that they always wanted to consider during their working years, but were unable to due to high expenses, or to the fact that the transition would result in a large decrease in income.

But without dependents, and having the benefit of Social Security income, retirement may be the time to pursue that dream career.

One of the side benefits to a dream career is if they really like the work that they’re doing, it won’t feel like work, and they may find themselves enjoying life more than ever.

Encourage Them to Start Their Own Business

It’s probably true that most people have some sort of business idea that they’ve played with, even though they never followed through with it during their working years. Now may be the time for your parents to put that kind of plan into action.

A business is not just a chance at providing yourself with an income. It can also represent the adventure of a lifetime. Not having a boss, being free to pursue any direction they like – and being in a business they enjoy – can be more rewarding than lifetime of sitting by the beach or playing golf.

And if the business is successful enough, they might find themselves able to fully retire in another 10 or 15 years. This can come about as a result of either earning enough money to save for retirement, or being able to sell the business for a large lump sum when they’re ready to retire completely.

If You Have a Business, Hire Your Parents

If you have your own business, consider finding a way to hire your parents. You can hire them either on a part-time basis, or even on a seasonal basis during the busy times of the year for your business. This may take the pressure off of your parents in having to either find a job or start their own business.

Having to work in retirement might not be a virtue, but if it is the only way for your parents to survive, then it’s a topic that you are going to have to bring up. And if you have concrete suggestions as to how they can do it – in a more creative, flexible, and rewarding way – they may be more open to the idea than you might imagine.

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.

All posts by Kevin Mercadante