If you’re concerned that your parents are getting older and worried about their ability to make wise financial decisions, you’re not alone. In fact, 10,000 experienced baby boomers are retiring each day—a trend that will continue through 2030!
When you combine the complex and ever-changing financial industry with the fact that there will likely come a time your parents will be unable or uninterested in managing their money, you may very well find yourself in a challenging situation.
According to a poll by the Pew Research Center:
- 75% of adults believe that they have a responsibility to provide financial assistance to their aging parents.
- 63% percent of adults have given some type of financial support to their grown children in the past year.As your parents move into retirement, it’s wise to plan ahead for any financial and legal responsibilities they may expect you to take on.
Starting the conversation
These days, 65 is hardly considered old age. But, it’s crucial to sit down with your parents and have an honest discussion about issues that may arise—before they need your help. What are their expectations for the future? What kind of assistance will they need from you? Will they have sufficient resources to cover their care as they age?
As part of this conversation, be sure their important documents and information are organized. You’ll want to know where to locate items such as:
- Wills and legal documents
- Investment, bank, and insurance account numbers
- Safe deposit boxes, real estate deeds, and automobile titles
- Emergency contact numbers (medical providers, neighbors and friends, and financial, tax, and legal advisors)
Looking into legal matters
If they haven’t already done so, your parents may want to hire an attorney to help them manage their affairs. For example, they may need assistance with:
- Appointing a health care representative. Without legal authorization, medical privacy laws prevent doctors from discussing a parent’s medical conditions with you. In addition to appointing a health care power of attorney, your parents may want to consider a living will, which provides instructions on how to manage treatment if they have a terminal or irreversible condition and cannot communicate.
- Reviewing and updating estate planning documents. Besides the basic estate planning documents, such as wills, durable powers of attorney, and revocable trusts, your parents may wish to draft a letter outlining who will receive personal effects like jewelry and family heirlooms.
Discussing their financial situation
Depending on your parents’ circumstances and financial savvy, they might need help managing their money as they age. Making arrangements now can help prevent confusion down the road.
- Review insurance coverage. Be sure to discuss your parents’ existing life and long-term care policies, and make changes if necessary.
- Enlist an advisor. Now may be a good time to get to know your parents’ financial advisor, or to talk to your own advisor about your parents’ situation. She can recommend products that are suitable to their investment goals, whether that means income, capital preservation, or growth.
Looking to the future
As your parents age, a number of other considerations will likely come into play. Will they be able to continue living at home? How long will they be able to drive? Although these topics may be difficult to discuss, it’s important to start the conversation early—for your parents’ sake as well as your own. By planning ahead, you’ll help ensure that everyone’s needs are met.
And remember, you don’t need to make these decisions alone. I’m happy to help support you and your parents with strategic planning for the next phase of their lives. If you have any questions, feel free to reach out to me. I’m always happy to help!
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