As the last of the Baby Boomers reach retirement age, more Americans are tasked with providing increasing levels of care for their aging parents. Health and mobility may be at the top of mind, but money is also an issue — and the sooner you talk about it together, the better.
A little advanced financial planning makes it easier for everyone to navigate the years ahead and maximize your parents' independence and security. Here are five strategies for organizing and managing finances as your parents get older.
1. Start the Conversation Early
No matter what type of relationship you have with your parents, bring up the topic of finances as soon as possible after they retire. Start the conversation from a place of caring, rather than a drill session on the state of their money. While your exact questions may vary based on what you know about your parents' financial situation, here are some starting points:
- How well is your income covering your monthly bills?
- What kind of long-term assets do you have?
- Do you have any existing debt, and how much?
- What health coverage do you have?
- How is your financial information organized?
You don't need access to all of their details right away. But opening the door to communication can make things easier as your parents continue to age.
2. Organize Financial Documents
If you don't have any idea about your parents' assets and debt, it can be challenging to uncover all of those accounts later on. Working together, compile a list of bank statements, insurance policies, property deeds, and other financial and legal documents.
You can still encourage your parents to maintain their own records, but you should at least know how to access the information in the event of an emergency.
3. Simplify Their Banking and Bill Payments
Your parents may stay on top of their bills now, but you can plan for the future by helping them set up automatic bill payments. That way they won't miss due dates if their memory starts to fail or if they're hospitalized for an extended period of time.
If they're comfortable and you have a good relationship with your parents, you may even suggest that you have a joint account or be given financial power of attorney so you can manage their finances on their behalf if they can no longer do so themselves.
4. Protect Against Financial Scams
Elder fraud is a real threat. In 2023, scam-related financial losses for those 60 or older totaled $3.4 billion. Talk to your parents about common scams targeting seniors in Texas, like fake Medicare or credit union calls. Give them tips on how to recognize suspicious activity, like someone asking for a password or other sensitive information.
5. Plan for Long-Term Financial Security
Encourage your parents to create a will if they haven't already. If they have a sizable estate or complex assets, it may be worth enlisting the help of an estate planning attorney as well. Once you have those documents in place, schedule regular check-ins to see how everything is being managed. That way you'll see early warning signs of when you need to provide additional help, like strange purchases, memory issues, or unopened mail.
