Most parents try to teach their children about money when they are growing up. Using piggy banks, allowances and their first savings accounts are some of the common tools. As time passes, children grow up and have kids of their own. Some of the aging parents start to “feel” the effects of aging and how it can influence managing their money at the later stages of life. So adult children often have to step in to help with financial matters.
If you are now helping your aging parents manage their money and financial affairs, I’ll show you a few ideas that may make it easier.
As we age, our brains cognitive functions start to slow down. Some studies suggest that this begins as soon as our early twenties! This makes evaluating financial information and the ability to act upon it more difficult. Sometimes just the lack of energy as we age slows our ability to pay bills or even balance a checkbook. Some conditions such as poor eyesight and hearing can dramatically impact the ability to make financial decisions. Arthritis and Alzheimer’s can seriously limit simple decisions. I’ve seen all of these first hand with my aging clients.
With previous generations, the husband often paid the bills and made the financial decisions. When the husband died, many elderly women found themselves making money decisions for the first time. This is just one example, but many times a surviving spouse faces difficult decisions they’ve never had to make before. This is where adult children may have to step in and help.
Some ideas for Helping
The first idea would be for an adult child to be added to the various accounts. This helps with monitoring their parent’s finances. This will alert children of payments that are due, late fees, or even large withdrawals. This will also go a long way in preventing senior citizen scams. Another idea would be to set up online banking and automatic bill pay. Adult children can make sure those obligations get met in a timely manner.
Direct deposit of social security and pension checks. This simple idea eliminates multiple trips to the bank, and it is credited much quicker.
Having aging parents move in with adult children may be more practical. It will make if far easier to monitor spending and decision-making. As an alternative, adult children may have to spend far more time with the parent at their residence.
Another good idea is to meet with the parent’s various advisors. That way everyone is on the same page. If the adult children have already been added to these accounts or have written permission to make decisions, the advisors know in advance who they are.
Adult children should also make sure beneficiary designations are up to date on life insurance policies and financial accounts. If possible, use a revocable trust and transfer on death appointment to assure these assets do not go through probate. Any asset that has a named beneficiary avoids probate. These are simple steps that can save a lot of trouble and money later.
Adult children should discuss financial decision-making with their aging parents as early as possible. Any approach should allow the aging parent to maintain as much independence as possible and continue to respect their wishes. Some parents are in denial that they need the help to begin with. In cases like this, you may need to consult a therapist who specializes in these issues. If you need some help with managing your aging parents financial affairs, write me at firstname.lastname@example.org, or call me at (859) 225-2596.