How to Manage Your Elderly Parents' Finances

Although it's difficult to discuss, when your aging parents slow down, the children are faced with the task of planning mom and dad's financial future. The transition is difficult, but open communication and early planning can smooth the way to ensure that your entire family can enjoy the golden years together.

Difficulty: Moderately Easy

Instructions

1. Start thinking about this early. Develop an open trusting relationship with your parents regarding money well in advance of any serious crisis.Make it clear that your not trying to steal their money. Find out what your parents want to do once their health declines. Nursing homes, moving to a warmer climate, Being near family.
   All these things need to be discussed.

2. Rethink their investments. The fortunes of older parents must also be a consideration in their children's retirement plans and should be figured in when the children are deciding how to allocate assets. Most children underestimate the cost of funding the care of an aging parent. A 500,000.00 portfolio may seem like a large amount, but will only cover about nine years in an assisted living facility. If your parents are in their 70's and live into their 90's, you can get a real finacial hit.

3. Consider long-term care healthcare. 40 percent of people over 65 will spend some time in a nursing home, and the costs are astronomical. To cover the costs, some extra security in the form of long-term care insurance would be a good idea. Most older Americans have fairly stable retirement income from pensions and Medicare, but the higher cost of long-term care is not covered by those plans. That's why long-term care insurance is a wise idea.

4. Get organized. Knowing where investments, insurance policies, wills, and other key documents are located is a very important step in this process. Make a personal data checklist for each parent that outlines debt, income, taxes and medical histories. And check in with your parents often. It will make both of you feel better.

Tips & Warnings

• Retirement should be just one variable in what should be a plan based on longevity. The key is planning for longevity, not just retirement.

[mello10]

on 12/7/2009 Good tips on dealing with an elderly parent's finances

[solutionsforu]

on 12/6/2009 Good information to help manage elderly parents' finances.

[zoegus]

on 12/6/2009 Great article, I am doing this also for my 83 yr old mother, It is not easy. I promised my mother no nursing home, she lives next door to me!! 5*

[osusanna44]

on 12/5/2009 Great article on How to Manage Your Elderly Parents' Finances! This subject is one that many of us have to face at one time or another. Trying to help and guide my 80 year old Mother has been real trying but my siblings and I have been diligent at diving in. Better than all assets and money being tied up in probate court someday. Thanks for the great tips. 5 *****s

[jblovly]

on 12/5/2009 This is really informative. 5*