As parents age, the prospect of having to help them in their daily lives as a financial (or even full-time) caregiver becomes reality to many. According to Harris Interactive, 42% of adults have taken responsibility for some part of their parents’ financial decisions.
At first, this responsibility may seem overwhelming. However, there are a few suggestions that can help when someone may have to take over their parents’ finances in the near future.
Of course, these suggestions are just that, we recommend contacting a financial planner for a more comprehensive plan that aligns with you and your family’s financial goals.
Keep in mind that some retirees also decide to continue working part time during their retirement and some find that, once their homes are paid off and their children leave the nest, they have far less expenses than they used to have when they were in the full-time workforce.
And while there are numerous retirement calculators online, they usually only deal with a few numbers and don't take into consideration the myriad choices a retiree can have when planning for their future.
Planning for retirement should never be left up to a rule of thumb and averages. Each and every retiree has their own specific set of circumstances that will affect how they need to plan for their retirement.
Contact Steel Valley Investment Group of Raymond James for more information on how you can get started planning for your retirement today.
1. Start the Conversation Early: While it may not be something your parents want to talk about, beginning the conversation about what will happen when you may need to take over their finances can pave the way for a smooth transition with less red tape. These conversations may also include a financial planner who can help to maximize your parents’ investments, especially if they may go toward long-term care.
2. Talk to a professional: A recurring theme when taking over your parents finances includes talking to someone who is familiar with those types of circumstances. Attempting to put everything together on your own can result in frustration and confusion.
3. The Little Things: When thinking about taking over your parents’ finances, the big things may come to mind like “net worth” and “investments” and “retirement funds.” However, other things, such as their ability to drive, their utilities, and even internet passwords may also have to be categorized and taken care of. Be prepared to possibly have to roll up your sleeves, metaphorically and literally, when diving in.
4. Power of Attorney: William Power, in his well-written and insightful Wall Street Journal article “The Difficult, Delicate Untangling of Our Parents’ Financial Lives,” says you can’t really overstate the importance of power of Attorney.
“Everybody is always told how important it is to get a “power of attorney” document, or POA. But let me assure you: As important as you think it is, it is more important than that.”i
“The notarized form gives you the legal right to do financial transactions for someone. When you are stepping in to help run someone’s financial life, you can’t do anything without it, including dealing with banks, pensions, financial advisers, medical facilities. Over and over, you will need to fax, mail or bring in that POA.”ii
Taking over your parents’ finances is a serious task that should be taken seriously. To that end, your first step should be talking to a professional advisor. Please reach out to Steel Valley Investment Group of Raymond James to set up an appointment.
i GreatCall.com: https://www.greatcall.com/currents/blog/caregiver/2016/04/08/financial-caregiving-what-you-can-learn-for-yourself
ii Wall Street Journal: https://www.wsj.com/articles/the-difficult-delicate-untangling-of-our-parents-financial-lives-1459130770
Views expressed are those of the author and not necessarily those of Raymond James & Associates and are subject to change without notice.