Article

Complex Waters of Aging Parents' Finances

Complex Waters of Aging Parents’ Finances

Managing our own finances can be a challenge. But as your parents move into retirement and beyond, their financial landscape can become complicated. Here are some tips on how you can help guide them through this stage of life with confidence and peace of mind, ensuring their comfort and security in their golden years.

June 6, 2024
Complex Waters of Aging Parents’ Finances
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

As professionals, managing our own finances can be a challenge. However, one area that we often overlook, yet is vitally important, is understanding and navigating our aging parents' finances. As they move into retirement and beyond, their financial landscape can become complicated, making it necessary for us to step in. Here are some crucial areas to focus on:

Understand Their Income

Understanding your parents' income sources is the first step in comprehending their financial status. This includes pensions, social security, retirement savings, rental income, and other assets.

Knowing where the money is coming from can help anticipate potential issues, such as a fluctuating income or the need for additional support.

Discuss Their Estate Plan

Having a conversation about your parents' estate plans can be difficult, but it's essential. This includes understanding their will, any trust arrangements, and their wishes regarding the division of assets. It's also important to know who they've named as executors or trustees. Having these conversations early can prevent misunderstandings and legal complications down the line.

Plan for Healthcare Costs

Healthcare costs can skyrocket in old age, and it's essential to understand how these expenses will be covered.

  • Are they enrolled in Medicare?
  • Do they have a supplemental health insurance plan?
  • Do they have long-term care insurance?

If not, it may be worth discussing these options and understanding what healthcare costs could look like in the future.

Be Aware of Potential Financial Abuse

Elderly individuals are unfortunately often targets for financial scams and abuse. It's important to regularly check in on your parents' financial transactions and be vigilant for any signs of suspicious activity. This can include unexplained bank withdrawals, sudden changes in their financial condition, or new, unknown 'friends' who show an unusual interest in their finances.

Your Financial Advisor

A trusted financial advisor can be an invaluable resource for managing your parents' finances. They can help with everything from planning for retirement income to advising on estate planning and managing investment portfolios.

If your parents don't already have a financial advisor, consider helping them find one. Remember, it's critical that this advisor is a fiduciary, meaning they're legally obligated to act in your parents' best interests.

The Circle of Life

Navigating your parents' finances can be a complex task, but it's a critical part of ensuring their comfort and security in their golden years.

By taking the time to understand their financial situation, planning for future costs, and seeking professional advice, you can help guide them through this stage of life with confidence and peace of mind.

Other content you may like

  • Risk in Times of Uncertainty

    September 16, 2020
    2020 has brought about quite a few challenges (to say the least). With so much uncertainty it can be hard to plan next month, let alone the distant future. This month Strong Valley is introducing a new tool and framework to help feel more prepared. We can't predict the future, but we can help you feel more prepared to take it on.
    Read this Article
  • Senior woman alone on a bench

    12 Reasons You Could Go Broke in Retirement

    August 26, 2020
    Retirement is a major milestone that brings many life changes. One thing that doesn't change for most people: the fear of running out of money. According to the Transamerica Center for Retirement Studies, the most frequently reported retirement worry is outliving savings and investments. Across all ages, 51% of respondents cited this concern, and 41% of retirees claim the same fear. Additionally, only 46% of retirees think they've built a nest egg large enough to last through retirement.
    Read this Article
  • Money Market Assets at Historic Peak

    March 30, 2023
    This month’s Student of the Market looks at U.S. stock performance after peaks in Money Market fund assets and performance following peaks in inflation. The big question in many minds is “how long will this inflation last?” An answer might be found in these stats on prior inflation cycles. Plus a chart on a possible downside with risky income asset classes and more market insights.
    Read this Article
  • Rules for Charitable Giving are Always Changing

    Rules for Charitable Giving are Always Changing

    October 27, 2021
    There are many tax tactics to keep in mind for preparing next year’s return. Starting well in advance of the tax filing deadline is simply a prudent thing to do. But rules for charitable giving are confusing and you must be careful before entering that deduction. Here’s some things to think about regarding Charitable Giving: recent changes made by IRS, sorting through the maze of IRS rules and knowing who you can make donations to.
    Read this Article
  • The link you have selected is located on another server. The linked site contains information that has been created, published, maintained, or otherwise posted by institutions or organizations independent of this organization. We do not endorse, approve, certify, or control any linked websites, their sponsors, or any of their policies, activities, products, or services. We do not assume responsibility for the accuracy, completeness, or timeliness of the information contained therein. Visitors to any linked websites should not use or rely on the information contained therein until they have consulted with an independent financial professional. Please click “Continue to Link” to leave this website and proceed to the selected site.
    phone-handset