7 Things You Should Do When Your Parents Haven't Saved for Their Retirement

Talk to your parents—but skip the blame game.

The first and most important thing you can do is to open up the conversation with your parents. Like any other issue, you can't possibly fix their lack of retirement savings if you don't have all the information and know exactly what you're dealing with.

Keep in mind that this will be a tough conversation for everyone. Sethi notes that discomfort is often a result of parent-child role reversal, as well as feelings of guilt or shame on the part of the parents.

It's highly likely that your parents will be embarrassed and perhaps even a bit on the defensive about explaining their finances to their child. In their mind, it's not supposed to be this way. Discomfort aside, this is a crucial first step.

Ideally, you'll want to be clear about the gravity of the situation and let them know how it affects everyone. When doing so, however, do your best to steer clear of the blame game. At the end of the day, what's done is done. Not only will pointing fingers not solve anything, but if you cause your folks to feel like they're under attack, it could put them on the defensive—and then all bets are off, and time is ticking.

Your goal here is to help your parents understand that this is a shared circumstance, and your only interest is to try to get their ducks in a row and help them plan for the future.

Get other family members on board.

Siblings can be an abiding source of love and support, and this situation is likely no different. By enlisting their help, you'll not only find someone to share the financial responsibility and shoulder the emotional burden, but they could also be a source of fresh ideas for dealing with the issue.

Dig into financial details and get started on a budget.

While budgeting won't fix the problem, it will help your folks stretch a dollar or two. First, you'll need to get a clear picture of what they have and what they'll need.

During this conversation, do your best to figure out the following:

• Do they have any current income?
• Do they have any assets?
• Do they have any sources of retirement income? i.e., social security, pensions, etc.

After you have ascertained what they have coming in, you'll need to take a good hard look at what's going out. That list could include things like:

• House notes
• Car payments
• Utilities
• Healthcare costs

When you examine your parents' outgoing cash flow, it can be easy to get stuck on the big things, like those mentioned above. But it's incredibly important to remember small, recurring expenses that tend to add up over a month or year. To that end, you'll need to drill down to expenses such as groceries, gas, magazine subscriptions, and maybe even the $20 slipped to the grandkids every month.

Encourage them to try phased retirement.

The best time to broach the financial aspects of your parents' retirement is before your parents have retired. Doing so may keep a few good options on the table for helping them.

Stephan Baldwin, who runs an assisted living center, urges adult children to "consider talking with [your parents] about phased retirement. Maybe they can partly retire while still generating some income that will at some point in time help them retire. In its most basic form, phased retirement is an employment agreement in which a worker is allowed to reduce their working intensity gradually, for a set amount of time, until the person completely retires."

Baldwin goes on to explain that phased retirement "has gained traction for many reasons, one of them being that many people are approaching retirement age without substantial savings. This working model allows them to enjoy some retirement benefits while still generating income from their work."

Look for new sources of income.

If your parents are already in retirement, tightening the purse strings will only go so far. The truth is they may have to essentially come out of retirement to make ends meet or to maintain their current lifestyle. And while the standard employment model may be a bit much due to their age or health concerns, there is plenty of hope to be found in the gig economy.

Surprisingly, millennials and Gen Z are not the only ones leaning into the gig economy. According to a study on gig work and its impact by generation conducted by Edison Research, 11% of those aged 55 and older have gig jobs. Whether it's there due to circumstances beyond their control or simply because they want some extra cash, the fact is not only are older folks there, but they are actually thriving.

In fact, another survey conducted by Prudential on gig work and financial wellness shows that the average annual income (gig only) among those 56 and older is $43,600.

From ride-sharing to pet sitting, the gig economy has grown by leaps and bounds in the past decade. So it's quite possible that your parents can find a way to put whatever skills they have to work for them, generating an income without returning to a 9-to-5.

Use the resources available to you.

Cameron Huddleston, a family finance expert with Carefull, suggests reaching out to any of the various resources and organizations that are available to you, such as your local Area Agency on Aging. "These non-profit organizations can help you find low and no-cost services that will provide support for your parents," Huddleston says.

Beyond that, Huddleston advises adult children to reach out to "your state chapter of the Financial Planning Association to ask if there are financial planners in your parents' area who will provide their services for free or at a discounted rate.

Additionally, consider meeting with a financial advisor who can help review your parents' financial situation and find ways to stretch the resources they do have. There are financial advisors who will work on a pro bono basis. And finally, If your parents have very limited income and assets, they might qualify to receive long-term care through Medicaid."