How to Help Your Elderly Parents with Financial Planning
Acting as a guardian or caregiver for an aging parent is a task with no shortage of challenges. In the midst of helping to maintain their living quarters, taking them to doctor appointments, making sure that they have the best hearing aids on the market, and the other seemingly mundane tasks of daily life, it can be easy to forget about their finances.
You should make an effort to address their financial situation sooner rather than later. As they progress through their golden years, you want to be sure that they are financially sound, and able to meet the financial challenges that can arise during this time of life. Here are some things to consider when helping your parents with their financial planning.
When you lose your working income due to retirement, you may need a means of replacing at least some of it. Taking out a reverse mortgage on your home might be that solution. Unlike a standard home loan, a reverse loan pays you without the need for quick repayment of the funds. In fact, when a reverse mortgage calculator tool establishes a borrowing cap you can borrow any amount up to that cap and pay it back at your leisure. The only major stipulation is you have to stay in the home. Moving out triggers the lender to call in your loan balance. The ability to take many years to spend the money freely as you want can make your retirement much more comfortable than it would be if you remained low on funds.
Have the Talk Early
While your parents may feel that they don’t need any help with their finances, remember that as we age our ability to handle complex tasks diminishes. This means that, although your elderly loved one may not need any help at the moment, chances are that the day will come when this is no longer the case.
Talk with your aging parents about helping when there is still plenty of time before they need your help. This can help them adjust to the idea of having someone else assist in this area. Many people of this generation were raised to be extremely independent, and getting used to accepting help can take time.
Start Off Small
Given the sensitive nature of your task, and given the amount of time it will take for your parents (as well as you) to adjust, it’s best to ease into the task of helping them with their finances if you can. Rather than jumping in and completely managing everything right from the start, try to ease into it.
Perhaps you could start off managing a few items, and then slowly expand your responsibilities. Of course, every elderly person will be different, and it may very well be that you never have to completely take over your elderly loved one’s finances. But it’s good to at least have some involvement so you can keep your finger on the pulse of your aging parent’s financial situation.
Get the Documents You Need Early On
When assisting in financial planning, you may need a few documents from your parents before their financial companies will talk with you. Documents like a financial power of attorney, trust papers, and so on can all come in handy.
If you can, it’s good to have these documents prepared and signed early on in the process. Ideally, you would have them before you ever begin assisting with your loved one’s finances. That way, when the time comes for you to step in and start helping out, it’s one less thing you have to deal with.
Consider Their Unique Financial Situation
Whatever you do, you should not approach your parents’ finances like you would your own. You have different fiscal goals at your respective stages of life. Make sure that you steer the financial decisions with an eye toward the needs and resources of your elderly parent, not your own.
When it comes to insurance, keep in mind that your aging parent likely does not need something like a huge life insurance policy. Given that life insurance is intended to replace the lost income when someone dies, and given that your parent is likely retired, the need for expensive policies is minimal. Instead, consider something like a life insurance policy for seniors that will cover the cost of a funeral and burial arrangements.
While this is a challenging time for both of you, following these steps can help make it easier. If you need more information, spend some time online researching. You’ll find that you are not alone during this time, and there are many resources to help you.
