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The stakes only go up if the family is middle class and the parents are inretirement.
Does this sound like a situation familiar to you and your kin?
This statistic highlights the widespread anxiety about financial security in later years.
In middle-class families, helping parents pay off debt without incurring additional debt is essential.
Here are 10 ways the middle class can help retired parents pay off debt without going into it themselves.
Sit down with them and review their debts, assets, income, and expenses.
This assessment provides a clear picture of what needs to be addressed.
Understanding their financial landscape helps in creating a realistic debt repayment plan.
Help your parents consolidate their debt into a single, lower-interest loan or credit card.
This can simplify their payments and reduce the amount of interest they pay over time, Davidson said.
This can make a substantial difference in managing debt effectively.
This can be a fulfilling way to stay active and financially productive.
It can significantly reduce their monthly expenses and free up funds to allocate towards debt repayment.
Use 30% for discretionary spending like entertainment and hobbies.
And, put 20% towards saving and debt repayment.
This option can provide immediate relief without requiring monthly mortgage payments.
Prioritize Needs Over Wants
Help your parents prioritize their needs over their wants, Davidson said.
This strategy should be approached carefully to ensure they still have enough savings for emergencies and essential expenses.
Throughout the debt reduction process, it also offers emotional support and guidance, Keller remarked.
These professionals can provide personalized guidance and help your parents develop a plan to get back on track.
A financial advisor can offer invaluable insights and strategies that are customized to your parents needs.
These resources can provide valuable guidance and negotiate with creditors on your parents behalf, Keller added.
Local Area Agencies on Aging and the National Foundation for Credit Counseling are two examples of these programs.
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