Managing Your Parents’ Finances
Of the more trying endeavors a person must partake in over the course of a lifetime, seeing their parents sail debt-free into the golden sunset of their existence is particularly strenuous. It has become a commonly held belief in our culture, or at least in the minds of the elderly and their loved ones upon whom this burden is bestowed, that the management of a parent’s golden years is the child’s responsibility & that this is all a part of the reciprocal cycle of life. But make no mistake: Ensuring that the last years of your parents’ lives are peaceful and painless, without suffocating your own savings and ruining any relationships, is no easy task. A myriad of factors contribute to making the management of a parent’s finances rather arduous, whether it be a parent’s reluctance to cede control of their lives to a child or a nursing home, a parent’s reluctance to divulge any kind of financial information to anyone (including a child), or even a parent’s over-reliance on their off-spring. The following is a guide to managing your parents’ retirement, keeping them healthy and safe, and still conserving enough money and energy for you and your children’s future. The most crucial component of guiding your parents into retirement comfortably and without unnecessary stress is communication. Make sure to be cooperative and understanding, always opting to listen rather than bark orders; remember, the reversal of roles which occurs when parents are forced to rely on their kids can be difficult, especially for parents who are fearful of giving up control of their lives, so one can’t simply boss their parents around when it comes to both the money they have earned and the futures they want to make the most of. It is important to develop an honest, trusting relationship with your parents regarding their finances long before you are forced to do so by some untimely accident or shift of fortune. Early planning and open lines of communication between generations will help everyone assimilate, come to terms with and adjust to the eventual degeneration of older family members. Find out where your parents keep important papers, including their wills, powers of attorney, safe-deposit information, birth and marriage certificates, dissolution certificates, Social Security records and insurance policies. Also, make lists of pensions and investments, property and financial advisers.
The best is to ensure that your parents are safe and happy in their golden years depends on the capabilities of said parents. If they are intent on living independently, then consider signing them up for online or automatic bill pay, at least if you suspect them of not paying their bills. Make sure they fill their prescriptions; consider mail-order drugs that update automatically each month, or join a Medicare plan for prescription drug coverage. Fall proof the house by tacking down loose carpets, installing handrails and non slip strips in the shower and removing throw rugs and thresholds. In some cases, however, even the most thorough safety-check will prove insufficient in catering to an aging parent’s needs. A home-care nurse is an option if your parents cannot bear the thought of leaving their home, albeit an expensive one; annual costs for home care can top $20,000. In the same vein, the average cost of assisted living communities is about $70 per day, and a nursing home stay, recommended for people who are no longer able to care for themselves, can cost anywhere from $75 to $235 per day. Hopefully your parents will have some money saved from Social security, pensions and savings to help fund their later years, but if not there are others options. Consider selling your parents house to free up some cash. If all the kids are grown, cash out the life insurance and reinvest in something that yields a steady monthly income. Keep track of medical bills, as medical expenses are deductible if they exceed 7.5% of adjusted gross income. Advise your parents to ditch their credit card plans in favor of lower-interest cards. Also, Medicare begins at age 65, when all who’ve paid into the system during their career receive part A of the program, which covers inpatient hospital costs and nursing home care. However, Medicare does not cover the higher cost of long-term care this insurance can be purchased at reasonable rates.
A very important component of this process, at least for the child doing most of the work, is to remember that your needs come first. Help out your parents as much as you can, but don’t sacrifice your own immediate family’s future in the effort. Don’t carry out your parents debts. Decide the extent to which you are willing to help your parents with their retirement, and stick with it. Utilize services such as meal delivery or adult day care. Through all of this, however, make sure your parents are knowledgeable about and comfortable with the changes that are happening to their lives.
