7 Ways to Help Aging Parents Handle Finances

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worried african american senior maleLive long enough, and it’s bound to happen: that moment when you realize that the role between parent and child has switched.  For more than half a century, your mom and dad were large and in charge – directing your every move like a drill sergeant – whether you liked it or not.  A blink of a lifetime later, you wake up and realize that it’s your turn to have “The Talk”.  Your parent may or may not realize it yet, but s/he desperately needs you to provide advice and counsel on a myriad of issues, large and small, weighing heavy on their chest.  You sigh deeply, embrace it, and determine to dive in and give back to your parent(s) in any way that you can as a way of saying thank you for all they have done for you over the years.

Certain situations require an expert, so I wanted to share a brief recap of 7 Ways to Help Aging Parents Handle Finances by Robert Powell, a MarketWatch Retirement columnist.  Robert has been a journalist covering personal finance issues for more than 20 years.  You can read his full article here.

Michael Finke, an associate professor at Texas Tech University maintains that “The problem is that we often don’t recognize the decline… the decline is so gradual and consistent (we measure the decline in financial decision making at about 2% per year), we often don’t recognize when we become vulnerable to making mistakes.”  Whether you’re the adult child stepping up to the plate, or the aging senior reaching out for support, congratulate yourself for acknowledging the reversal of roles.  You have just jumped the first hurdle in a marathon of financial and non-financial matters.  If you’re wise, part of your retirement plan will include someone to delegate important decisions to before your cognitive skills decline.

On the financial side, you can begin by fine-tuning your 401K.  If you plan to retire in five years or less, it may be time to adjust your investing strategy.  Choosing investments that require less active management and establishing a power of attorney will make things much easier – the sooner, the better.  The longer you wait, the more difficult it will be to persuade an elderly adult to relinquish control.  Once a plan is in place, don’t forget to update the documents in the plan on a regular basis.  Organizing things like wills, assets, end-of-life wishes, medications, and health records can be very helpful.

You should also discuss where to live.  Most people like to stay in their own home, but you must take driving into consideration.  If driving is no longer an option, will walking, catching a ride with family or friends, bus, or other forms of public transportation be possible for basic needs and medical attention?  In some cases, a retirement development or assisted living facility may be necessary.

As an estate planner for more than 25 years, I strongly encourage you to decide who will take over common tasks like paying bills, filing tax returns, handling property and investments, managing insurance policies and claims, and making health and medical decisions if the parent is unable to do so.  Key players should be introduced in advance of trouble; adult children, partner/spouse, financial advisor, CPA, attorney, etc.  If your parent doesn’t have a plan yet, one of the best gifts you can give them is a visit with a competent estate or elder law attorney to make sure their assets and future are protected.  I can only speak for myself.  The initial consultation is always free at Parrish Law.

 

As I mentioned a moment ago, health is also a hot topic.  What would your parent(s) prefer if they’re struck with a life threatening disease such as cancer?  “Do they want to stay at home at all costs? Would they be willing to relocate to a continuing care retirement community (CCRC) or nursing care facility if necessary?  Have they prepared financially for the contingencies or researched what those care options might be?”  If they’re fortunate enough to live many years in retirement, what’s the plan for staying healthy and whole?  Remaining active and social makes a huge difference.  I can personally attest to this.  I stand in awe of my mom.  She’s nothing less than inspirational with her life style!

 

If “The Talk” feels awkward for you, try to get the ball rolling by sharing a good article or book with your parent(s) on the topic.  Stories about others in a similar situation can break the ice as well.  Bottom line, when you come from a place of love and concern, your mom and/or dad will know it and they’ll appreciate it.  When they had “The Talk” with you back in the day, you didn’t necessarily like it; but, looking back, you’re probably really glad they did.  Tag – you’re it!

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