I’m 27 and trying to save my boomer parents — they have no retirement savings and are in debt. How can I help?

It’s natural for many parents to want to help their adult kids land on their feet by providing some financial support. But every so often, these roles can get reversed.

Imagine you’re in your late 20s with a solid handle on your personal finances. Maybe you’re well on your way to paying off your student loan debt, and you don’t owe any money on your credit cards. Maybe you already even have a well-funded IRA or 401(k).

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On the flip side, your parents, who are in their early 60s and only have a few more working years ahead of them, are in dire financial straits: little to no retirement savings and credit card debt. Perhaps your parents are even banking on using Social Security as their primary source of income during their golden years.

But with the average retired worker today collecting a mere $1,918 benefit per month, that’s hardly a solid plan — especially if a chunk of that money needs to go toward paying off credit card debts.

However, if you’re willing to step in and help set your parents up with a game plan, you may be able to save their retirement — and avoid a situation where you’re forced to support them once their careers wrap up. Here are some ways you can help.

1. Create a strict budget

First things first: set a budget. Whether you resort to using an app, spreadsheet or a simple paper and pen, figure out how much your parents take home each month — and how much they spend on average each month.

Be as specific as possible — don’t just add a “housing” category without breaking it down into more detail. Consider how it breaks down by including, for example, any rent or mortgage payments, utilities, internet, and property taxes.

As part of the process, you’ll also need to get your parents on board with the idea of reducing their expenses — from minor changes (canceling underutilized streaming services, for example) to major cutbacks (such as going from a two-car household to sharing a single vehicle).

Of course, for a budget to be successful, it needs to be realistic. If your parents have never gotten into the habit of saving in an IRA or 401(k), they’re probably not going to start socking away 50% of their income just because you’ve intervened.

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However, if they can go from saving 0% of their income to 10%, that gives them an opportunity to start catching up while adhering to a tight budget.

2. Break the cycle of credit card debt

The problem with credit cards is that they can charge high interest rates and compound interest, so people who owe money end up trapped in a vicious cycle of debt. For anyone to retire comfortably in this situation, that cycle needs to end.

The average credit card APR, as of mid-July, is 27.62%, according to Forbes Advisor.

Consider trying the popular snowball method, a debt-reducing strategy where you pay of the smallest debt first while making only minimum payments on any other debts. Once you’ve paid off that smallest debt, use that motivation to pay off the next smallest debt, etc.

There may also be a way to swap that APR for a lower one, such as taking out a personal or home equity loan and using it to pay off credit card balances at a much lower interest rate.

If your parents are in their early 60s, they may have a paid-off home with plenty of equity to tap. Fortune reports that as of 2023, baby boomers’ held a collective $18 trillion in home value.

However, taking out a personal loan or home equity loan is not a decision to be taken lightly as it could come with additional fees and the possibility of going into an even deeper debt hole.

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3. Set up automatic retirement plan contributions

If your parents don’t have a nest egg, they’re actually not alone. An astounding 27% of Americans have no retirement savings, including 401(k)s and IRAs, according to a Credit Karma survey.

Americans aged 55 to 64 have a median before-tax income between only $82,000 and $185,000 in retirement account balances, according to the Federal Reserve’s latest Survey of Consumer Finances.

According to Forbes, this means Amercans’ retirement savings fall short by nearly $500,000.

Once your parents are set up with their new budget, arrange for whatever portion of their income they can afford to land in an IRA or 401(k). If they have access to a workplace plan, that’s the one it pays to prioritize, since there may be an employer match involved.

In conjunction with this, it pays to encourage your parents to work a few more years — perhaps into their late 60s or early 70s, if their health allows for it.

If your parents are able to contribute $500 a month toward retirement over the next 10 years — even with a somewhat conservative portfolio delivering a yearly 6% return — that leaves them with $79,000 in savings. It’s still well below the median savings balance for people their age, but it’s better than $0.

4. Get involved as soon as you can

A 2024 Savings.com report found that 47% of parents support their adult children financially in some way. However, a 2022 GOBankingRates survey discovered that 63% of adult kids plan to provide financial support to their parents in their retirement.

If that’s something you can do comfortably, and it’s something you want to do, there’s nothing wrong with giving back. But if you’d rather not be forced to support your parents in retirement, then your best bet is to intervene as early as possible.

Another option? Find your parents a great financial adviser. It’s not always easy for parents to take advice from their kids. Bringing in an unbiased professional could be the thing that helps them get on track and avoid financial struggles later in life.