Are Your Folks in their Golden Years? It May be Time to Talk Finances.

Ann Wengronowitz |

If you have aging parents, finances are likely one of the first things on your mind. In addition to understanding their personal finances, you want to ensure that their basic living needs are being met. After all, retirement is a time for pursuing hobbies and ambitions. 

An early conversation goes a long way; it can improve the lives of you and your parents. This is particularly true if you are a caregiver for your folks, as such an undertaking can have a huge impact on your own personal finances. If caregivers need to take time away from their employment, wages may go down, affecting pension payouts, Social Security arrangements, and future career prospects. Furthermore, women tend to be more adversely affected than men, as they are often expected to take on caretaking responsibilities for aging family members. 

So, what can be done to mitigate the financial risk to yourself and your family while caring for elderly parents? The most important step is to make time for yourself. Caring for loved ones while they are most vulnerable can be emotionally draining and highly stressful. 

Taking practical steps to ensure that you stay financially solvent and that your parents’ wealth and possessions are protected should be high on your priority list. If you’re feeling overwhelmed with your finances, we’ve put together a few tips to help you protect yourself and those you love. 

It’s time to chat

Talking to your folks about money can be awkward, upsetting, and enlightening in equal measure, but it needs to be done. Knowing their wishes for the future can help you create a plan of action when their living arrangement changes, medical issues arise, or the unthinkable happens. Engaging in open conversation while they are physically and mentally healthy is also a good way to help ensure that their wishes are understood. 

You may find that your parent is unable or unwilling to talk about the future for a variety of reasons. They may feel that it is not your place to ask questions or may be unwilling to burden you with their personal finances. On the other hand, they could face medical conditions that render them physically unable to convey their wishes. In these instances, you will need to do as much financial organization as you can without them. Factors you should consider include; 

Insurance for long-term care

Do your parents have long-term care insurance? If not, do they need it? If you think there is a chance that your folks will need long-term care somewhere down the line, taking out an insurance policy could potentially save your family a large sum of money. This is particularly true if you or your family are unable to take time off to care for them if their health starts to fail. Discussions about future care can be very difficult but are absolutely vital. 

Living Arrangements

As your parents' age, they may find it increasingly difficult to live on their own. If they did not purchase long-term care insurance in their earlier years, you may need to help pay for home care or assisted living communities. Alternatively, you can ask them to come and live with you. If you’re willing and able to be a caretaker, this could be a viable option. Remember, however, that these decisions can affect your entire family and you will need to chat with your kids, partner, siblings, and extended family before making firm decisions. 

If you need to reduce your hours or even quit your employment to care for your folks, you will also need to consider the adverse effects on your personal finances. If giving up your job entirely seems to be the only option, it is worth talking to other members of your family about paying you as an independent contractor. This will allow you to set up a simplified employee pension plan (SEP), thereby helping you fund your own retirement needs. If you are married, you could also boost your retirement funding by making spousal IRA contributions. 

Protecting their assets 

It is important that you know your parents’ wishes regarding their assets after they have passed. Inheritance can be a contentious topic for families; complete clarity is important if you want to ensure their assets are protected. Make sure they have talked with a lawyer about their will and necessary documents in the event of their disability or death. 

Crunching the numbers

Once you have had the necessary discussions with your folks, you can prepare a data record to organize their finances. This document should include comprehensive data about the financial situation and care plans, including: 

- Financial information such as their investments and bank accounts 

- Funeral plans and final wishes 

- Legal information such as their will and health-care directives 

- Insurance policy information 

- Medical history and medication information 

- Location of any safety deposit boxes, as well as entry codes or the locations of keys 

- User IDs and passwords to financial and online accounts. 


Hiring a financial advisor 

You don’t have to do this alone. Hiring a financial advisor to help with arranging your parents’ assets and securing their care will take a load off your mind and help avoid potential mistakes. With so much to think about, enlisting a helping hand can help ensure that you do the best for you, your parents, and your wider family. 

By opting for Confidere Financial, you can rest assured that you will receive financial advice and recommendations that always strive to put you and your parents’ needs first. We are based in Minneapolis but serve clients all around the country. If you’re interested in using our services, do not hesitate to arrange an appointment in-office or via video call. We are ready to answer your questions!