Financial Planning With Your Aging Parents

Dec 12, 2013 | Investing for families

Starting a conversation about financial matters can be tricky. We’re often taught that it is not “polite” to talk about finances, and money matters touch on some incredibly personal and even emotional topics. But opening up the dialogue is critical to financial health – not just your own, but that of those close to you.

More and more adults are finding that they fall into the sandwich generation, people who are caring for their children and helping to support their aging parents at the same time. If you are in this situation, you can help your parents and yourself by getting involved and empowering your parents to create detailed financial roadmaps for the future. Here are some key questions to ask.

What is your parents’ financial situation?

  • Do they have any debt?
  • If they aren’t yet retired or are semi-retired, how long do they anticipate working?
  • How much do they have in savings?
  • What are their major plans for the future – for instance, do they anticipate relocating later in retirement?
  • What are their major goals and hopes in terms of their finances? What are their concerns?

Where are their assets located?

  • Encourage your parents to make a list of all their savings, checking and investment accounts – how much is in each, and where the accounts are held. Even if your parents don’t share the list with you, it can be a very helpful reference for their household that gives an at-a-glance sense of the big financial picture.
  • Do your parents own property? If so, where are the deeds kept? Do they have heirlooms or valuables stored at home or in a safety deposit box?

Do they have important documents in order? Where are the documents kept?

  • Do your parents have a will that is up to date?
  • Have they designated their Durable Power of Attorney for financial matters, and is that person aware of their wishes?
  • Should the need for long-term care (like assisted living) arise, different options can have significantly different financial impacts. What are your parents’ plans or preferences? Do they have important forms, like healthcare Power of Attorney and Advanced Directives, in order?

Building a sound financial plan for the future is empowering for your parents and important for the financial health of all family members involved. Starting the conversation on these key subjects is an important and positive first step.

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