Managing our own money is challenging enough, even with the help of a financial professional. But we often overlook a crucial area – understanding and navigating our aging parents’ finances.
Older adults face a variety of financial challenges. They may feel less confident making financial decisions. They may have a harder time understanding their bills and brokerage statements. Studies show they have a greater chance of being targeted by financial scams.
Here are five key places to start in helping your parents with their finances in their golden years:
Get to Know Their Income
Start by understanding where the money is coming from. Explore their pensions, social security, retirement savings, rental income, and other assets. Knowing their income sources helps anticipate potential issues, like fluctuating income or the need for extra support.
Have the Estate Plan Chat
Discussing your parents’ estate plans might be tough, but it’s necessary. Understand their will, any trust arrangements, and their wishes for dividing assets. Know who they’ve named as executors or trustees. Having these talks early on prevents misunderstandings and legal headaches later.
Tackle Healthcare Costs
Old age often brings soaring healthcare costs. Make sure to:
- Check if they’re enrolled in Medicare.
- Confirm if they have supplemental health insurance.
- Find out if they have long-term care insurance.
If not, discuss these options and understand what healthcare costs could look like down the road.
Watch for Financial Abuse
Unfortunately, the elderly are targets for scams. Regularly check their financial transactions for any signs of suspicious activity, like unexplained withdrawals or sudden changes in their financial condition. Be cautious of new, unknown ‘friends’ showing unusual interest in their finances.
Talk to Your Financial Advisor
A trustworthy financial advisor is a lifeline for managing your parents’ finances. They can assist with retirement income planning, estate planning, and managing investment portfolios. If your parents don’t have a financial advisor, help them find one – just make sure they’re a fiduciary, legally obligated to act in your parents’ best interests.
Navigating your parents’ finances may feel complex, but it’s a vital part of helping to facilitate their comfort and security in their golden years. Take the time to understand their financial situation, plan for future costs, and seek professional advice. By doing so, you can guide them through this stage of life with confidence and peace of mind.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities and advisory services offered through LPL Financial, A Registered Investment Advisor. Member FINRA/SIPC.