Given that very few South Africans are financially prepared for retirement, your parent’s retirement can have a direct bearing on your future financial position – especially if you’ll be required to provide financial support at some point in the future.
If your parents are not living within their means, cash flow problems are likely to arise, which could put financial pressure on you and your siblings. Ideally, help your parents draft a realistic budget and set up a system to help them track and record their expenses. Making use of pensioner discounts is a great way to reduce expenditure, although you may need to help your parents access these discounts online.
If your parents have long-term insurance in place, encourage them to review their cover and ensure that their beneficiary nominations are updated. Determine whether they have any whole-of-life severe illness cover in place, as this may be valuable in the wake of a dread disease diagnosis. If their life cover is geared to provide liquidity in their estates, ensure that the cover is appropriately structured to achieve this purpose.
Depending on the nature of their retirement income, the death of the first spouse may impact the surviving spouse’s retirement income. It is important to understand what the surviving spouse would receive in terms of income going forward. It’s also important to understand what living arrangements have been made for the surviving spouse, especially if living alone is not an option.