The last few times you’ve stopped by your elderly parents’ home you’ve noticed a pile of unopened mail on their dining room table, and that several of the envelopes were stamped with “payment due” on the outside. Lately your mom and dad have also been complaining about bill collectors harassing them on the phone.
What should you do?
A discussion about finances is something your parents will oftentimes avoid due to pride, privacy concerns, and the desire to maintain their at-home independence. Other than money issues your parents seem to be healthy and quite capable of taking care of themselves on their own. But something needs to be said about their financial affairs so that they can continue comfortably aging in place within their home. Having the “money talk” with your mom and dad is certainly never easy. In order to plan for that process here are several ways you can help your aging parents manage their finances.
What Money Problems do Seniors Face?
A recent study published in The Journal of the American Geriatrics Society found that advancing age diminishes a senior’s ability to make wise financial decisions. The onset of a serious illness, medications they’re taking and dementia can further impair decision-making. In addition, senior financial problems are exacerbated by phone scammers, dishonest repairmen they invite into their homes, and even shady caregivers. Seniors oftentimes get tricked into unknowingly opening up multiple credit cards and lines-of-credit in their names. Family members are also notorious for asking for money from elderly relatives. And just like the rest of us, seniors sometimes buy things they really don’t need, like unread magazine subscriptions and unused club memberships. When you combine all these factors with aging, it’s easy for seniors to financially get in over their heads and struggle to pay their bills. But the good news is that you can help mom and dad get their finances back on track by using the following tips.
Hold a “Money Talk” with Your Parents
First discuss what you’ve observed with other family members. Then choose a spokesperson to lovingly approach your parents about their financial affairs and why the family would like to help. Emphasize that it’s their money, and that no one is looking to take it from them. Schedule a casual family meeting in your parents’ home. Engage your parents in an open discussion about their bills, their financial challenges, and how you all would like to assist them. Determine if they would be comfortable with a designated Power-of-Attorney (POA) to go through their financial information and manage their affairs. Another option is to bring in an outside money advisor, like a certified financial planner or non-profit credit counselor.
Develop a Financial Plan for Your Parents
From what’s discovered during the “money talk”, implement changes geared towards mom and
dad’s long-term financial wellbeing. Whether they are working through a family member with POA or an outside financial advisor, these bases should be covered:
- Close out all but one or two credit card accounts.
- Sign them up for with the National Do Not Call Registry to protect them from telemarketers.
- Enroll them with a fraud detection company that monitors identity theft.
- Ensure all their mail is being opened, and bills paid, in a timely fashion.
- Monitor who they come in contact with including relatives, strangers and caregivers.
- Discuss asset protection with them in the event one or both become ill.
- Watch for excessive and unnecessary purchases.
- Reduce life insurance policies with benefits that exceed their current lifestyle needs.
- Recommend conservative retirement fund investments as opposed to riskier ones.
- Offer to help out with home repairs or major purchases so they don’t get scammed.
- Familiarize yourself with any wills and trusts they have. If they don’t have a will, encourage them to set one up soon.
- Discuss early asset transfers with your parents to guard against future estate taxes, notably if they have a large “nest egg”.
- Communicate routinely with other family members.
- Watch for warning signs of declining health in your parents.
In the end, keep in mind that it’s your parents’ money, and they’ve earned the right to spend it as they see fit. Even seniors with moderate dementia can still express their wishes clearly, so avoid overstepping boundaries as their POA. And finally, The National Council on Aging recommends holding the “money talk” with your aging parents while they’re still in their early 60s- typically before declining health sets in requiring caregiving assistance.
Other Aging Issues that We Can Manage
A senior’s ability to manage their finances diminishes with age. When it happens to your parents, as their adult child you want to ensure their financial well being so that they can continue living comfortably at home. At some point the aging process will also begin interfering with your mom or dad’s ability to carry out daily living activities like personal hygiene, cooking, housework and getting around.
At First in Care, we are not financial experts. What we do specialize in is top-quality senior in-home care that’s flexible and reliable, delivered in an effort to give you peace-of-mind that your aging parents are getting the compassionate caregiving they deserve. And, our affordable in-home care can be tailored to any family’s budget, so that your aging parents’ nest egg will remain safe and secure. For more information on how First in Care’s family-trusted senior home care services would benefit your loved one in the Manatee County, Florida area, request a consultation today.