My mom is convinced she can’t afford to retire — but I ran the numbers and realized she may be better off than she thinks

Let’s pretend, for example, that Matteo’s mother, Dolores, has $2 million saved, a home that’s almost paid off, and a paid-off car. She’s frugal, so she spends just $50,000 per year, and she’s 68 years old. Matteo wants her to retire, but Dolores is convinced she can’t afford it.

Matteo has run the numbers, so what should he do next to inspire his mom to stop working for good?

Understand where mom is coming from

The first thing Matteo needs to do is to pause to understand his mom’s true fears.

“If she can already retire, the issue isn’t with the spreadsheet. It’s with the sense of identity, purpose, and the thought of seeing these accounts decline instead of increase,” Evan Mills, an associate financial advisor at Scholar Advising, told Moneywise.

Mills explained that since Dolores is a saver, she’s likely used to watching her account values increase over time, and she has been rewarded over her lifetime for being responsible and spending within her means.

“To tell someone overnight that the accounts they’ve watched grow are now going to start declining, and that’s okay, that’s a really hard thing,” he said.

If Matteo takes the time to listen, he may discover his mom has specific fears, like running out of money due to a health emergency or not being able to afford to keep her house if there’s a maintenance issue.

If she discusses these worries with Matteo, he may be able to overcome her reluctance by showing her that she’ll still be OK financially — even with some unpleasant surprises.

Show mom the truth about her numbers

Once Matteo understands where Mom is coming from, the next big step is to show Dolores the math that really proves she’s ready to retire.

“I’d build a roadmap for where the retirement funding is going to come from,” Mills suggested. “Show her how much cash she has to withdraw, and what it looks like if there’s a market downturn.”

Mills explained that if Dolores has an emergency fund and a well-diversified portfolio, Matteo should easily be able to demonstrate that her plan is “still robust against any volatility she might face in retirement.”

The reality is, a $2 million nest egg produces around $80,000 per year at a safe withdrawal rate, and that’s not including Social Security benefits. That’s $30,000 more than Dolores is spending now.

Matteo can show her exactly where this money will come from to pay her bills, and end up with extra. This should put her mind at ease.