I find there are two questions commonly asked about retirement. How much do I need, and how much can I spend? These may seem to be the same question or at least related, but there's a lot of difference if we look a bit closer. Most of us have at least two major sources of income in retirement. Social security is the first source, and a critical one at that. The second is most typically savings in our 401k and/or rollover IRA's. You fed's will have a third, your pension (also a critical source of income). What's different about social security / pensions from 401k/IRA savings? Of course, it's that our social security and pensions will keep paying us for as long as we live.

And that takes us to the second question of how much can I spend. It really matters how long you live. Here's a funny thing. If asked, many people have a different answer depending on how the question is posed. You might answer differently if asked whether you will live to a certain age, versus if you were asked whether you will die by a certain age. That's because we often think of different things when each question is presented. When asked whether we will live to a certain age, we tend to think of the reasons we will live that long. When asked whether we will die by a certain age, we tend to think of the reasons we will die.

If you were asked how long you expect to live, what would you answer? While it might make sense to be very conservative, after all most people are afraid of running out of money, it also means that we could be imposing a restriction on our life unnecessarily. I ask people whether they'd like to take a longevity test. It may not be prescient, but I think it beats simply guessing.

Baby boomers are surrounded by family. That sometimes means our millennials still live at home, and at the same time we find ourselves caring for our parents. Today, let's talk about our parents.

At some point we may need to take over our parents financial lives. Often times it's in the middle of a medical crisis that we are called upon. Have you ever thought about how someone would take over your financial life? I think most of us would conclude that it would be no easy matter.

Most of us keep our financial situation to ourselves. It's not easy to share this information. If there are multiple children, it's that much more complicated to share our situation. Well, your parents are in the same boat.

What to do? That's easy. Sit down with them and have them lay out their full financial situation. What their income is, what their assets are, what their debts are, how they pay bills.....

That may sound easy, but probably isn't. As an alternative, engage a CFP to work with your parents. Your parents will find it much easier to lay out their situation with a qualified third party. What you want is for that person to map out their financial life and have a plan for how to deal with the situation before that medical crisis occurs and you find it becomes necessary to take over their financial life.