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Retirement lessons children can learn from elderly parents

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Many boomers caring for their parents may not to be planning ahead as well as they could be

CELIA KRAMPIEN/The Globe and Mail

Baby boomers caring for their aging parents have long faced challenges, from taking on this added role as caregivers to juggling the time demands of work and their own children's needs.

These boomers – often referred to as the "sandwich generation" – face a financial planning crunch as their own retirement approaches. Many have parents well into their 80s and 90s and are responsible for their care, with some even supporting those who have outlived their savings. As the time quickly comes when there will be two sets of retirees in the family, experts say it's important for boomers to secure solid retirement plans.

"You really need to look after yourself first," says Sandra Abdool, a regional financial planning consultant at RBC in Burlington, Ont. "If you haven't put the pieces in place and you have to care for others, you're not going to be set up for success."

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The 26th Annual RBC RRSP Poll, conducted in November 2015, found that just 49 per cent of Canadians have a financial plan. In particular, Ms. Abdool says many boomers caring for their parents may not to be planning ahead as well as they could be, noting that this situation is beginning to become more prevalent among clients as the population ages.

Putting a retirement plan in place means considering your financial health, as well as your personal health, she adds. You also need to define the needs that your parents have and whether they require money or time, or both, and then plan appropriately. "Develop a relationship with an adviser you trust, so that if you need to put your own financial plan on autopilot, you can."

Once all of the needs and options are known, research the resources available to help your parents, as well as yourself – preferably well before you have to draw on them, Ms. Abdool advises. "Ask for and accept help. There are lots of support services within our community: family members, local churches, support groups. Just reach out."

Help and advice also are often available through employee assistance providers and under health care plans in companies, notes Audrey Miller, a social worker who is the founder and managing director of Elder Caring Inc. (a Toronto-based company that helps families navigate care options for seniors). She says that help and advice are often available through employee assistance providers and under health plans in companies.

Questions on people's minds the most as they age are: "What's down the road?" and "Is my money going to last?"

"This is a conversation that we're all having," explains Ms. Miller, who has a mother in her early 80s living in another province, as well as two children in their mid-20s still finishing extended university degrees and sometimes living at home. "It's a very interesting time."

The biggest issue is the amount of care people need as they age, she adds. Statistics Canada reports that 35 per cent of Canadians are in a caregiver role while working. Many baby boomers are also looking after and in some cases supplementing their parents' finances and learning the surprising cost of health care at advanced ages, which can reach $500 a day or higher.

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"It's about having your eyes open and understanding what your parents are going to need, what's available and the costs," Ms. Miller says. "You have to plan for the unexpected and then think, 'What would this mean for me?'"

Ms. Abdool adds that those baby boomers now paying the cost of looking after their parents, who may be living with conditions such as Parkinson's or dementia and need expensive care, could end up revising or recalibrating their own retirement plans. For example: They might choose to work longer in order to build up sufficient funds for their own retirement.

"You need to sit down with your adviser and look at what things to change, to meet the needs of this new financial reality," she says.

Many grown children looking after their parents' affairs are learning important lessons that they can apply to their own lives, Ms. Abdool comments. "They're looking inwardly and saying, 'I don't want to put my children in this situation, so I'm going to prepare differently for when I'm at this stage.' It's a fantastic opportunity to sit down and put some plans in place."

A lesson to take away from the fact that your parents might be living much longer than expected is to build some flexibility and choice into your own retirement vision, she says. "Life never happens exactly as we plan."

One thing you shouldn't count on is that long-awaited inheritance, which may come some day, but should never be part of your financial planning. "It's like building a plan with the hope of winning the lottery," Ms. Abdool adds. "A plan should be built on what you can control and what you reasonably expect in the future."

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This content was produced by The Globe and Mail's advertising department, in consultation with RBC. The Globe's editorial department was not involved in its creation.

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