Ira Fateman is a certified financial planner at SAS in San Francisco who conducts free personal finance workshops for Hebrew Free Loan www.hflasf.org/financialfitness). Reach him at [email protected]

Barbara and Ralph called me with an urgent but not unusual problem. “We’re very concerned about my parents’ financial situation,” Barbara said. “They seem to be running out of money, and they’re scared. I spoke with my sister, and neither of us can afford to support the lifestyle our folks are accustomed to.”

It’s difficult when people retire but live beyond their means. Often, adult children have to step in to serve as the safety net for their aging parents. Just as often, those same adult children neglect to plan for their own senior years.

Increased life expectancies bring challenges. My father died 10 days short of 96. My mother, nearly 98, lives in a memory-care unit in a retirement home. What once seemed like abundant savings are fast running out, and my brother and I may have to help.

Things were different when I was a kid in Brooklyn. We lived in a two-family home. My aunt, uncle and cousins lived upstairs with my grandmother. Her financial safety net was her family. Today, people often live far from their parents.

“So what do we do?” Barbara asked. “In the case of your parents,” I said, “I have bad news that’s sort of good and good news that’s very good.” Barbara and her sister, I explained, have options even if they aren’t preferred choices. She or her sister could take her parents in. Their parents’ assets could go toward a larger home or apartment that the generations would share.

“But the best approach, at least at first,” I said, “is putting your folks on a budget.” It requires sitting down and determining several factors. First, there’s income. Where does it come from? How much is it? And is it dependable month after month? Then there are expenses. No one likes to cut back, but Barbara — and Ralph — would have to provide some tough love, particularly if they wanted to maintain their — and Barbara’s parents’ — independence. Staying financially viable often means making trade-offs. What’s important to understand is that no one has to stop enjoying life. Still, people have to be realistic about what they can afford, then find pleasure in small things.

Barbara blinked away a tear. “That’s going to be tough, but we’ll find a way. We have to. I just hope Ralph and I don’t pose the same problem to our kids.” Here, I was glad to deliver the good news that was very good. If, like Barbara and Ralph, you’re in midlife or younger, you have time to plan a safety net for your own elder years. When to start? Now. Begin with these questions:  

1. How much income will I need in order to retire comfortably? Remember, there’s a difference between comfort and extravagance.

2. What will be the sources of my retirement income? Social Security, pensions, annuities, retirement accounts, savings, investment real estate, proceeds from the sale of a business and even part-time work all contribute.

3. Where will I want to live? San Francisco is more expensive than Tucson. It’s also cooler and more transit friendly. Examine such key factors as proximity to grandchildren, friends, weather and opportunities to pursue your interests.

4. Will the equity in my home help? If most of your net worth is tied up in your home, you may need to turn it into an income stream. Selling and downsizing can provide you with extra cash. A reverse mortgage can be right if carefully considered. A heads up: When it comes to your home, take your time making a decision.

5. What health-care coverage do I need? Medicare helps, and Part B is vital. A “Medigap” policy covers what Medicare doesn’t. That’s important, because you could face major out-of-pocket costs without supplementary coverage. If parents can’t afford to pay the premiums — generally $125-$300 per month per person —it’s worth it for their children to pay.

“I feel better,” said Barbara.

“Although we’ll have to roll up our sleeves,” Ralph added.

There’s a saying, “Old age isn’t for sissies.” It’s not just about declining health. Many seniors stay active into their 80s and beyond. It’s about coming to grips with finances. A safety net for aging parents — and for yourself — can make a world of difference.