Watching our parents grow older isn’t an easy sight for any of us. Not only do some roles start to shift (when did we become the sensible ones?), but handling aging parents also often includes navigating additional responsibilities and difficult decisions. 
The day may come when your parents can no longer manage their financial responsibilities and other day-to-day tasks on their own. They might come to you for your support once they realize it, but many parents are hesitant to speak up about their diminishing capabilities. They may be too embarrassed to admit they are having difficulties and ask you for help.
If your parents or in-laws are approaching this phase of life, you may feel overwhelmed with how to handle this situation. You don’t have to navigate this difficult transition alone. We are here to offer support and guidance for everyone involved. Here are some tips to help you navigate “the money talk” with the aging parents in your life.
Cues Your Parents Might Need Help
You will likely be among the first to notice when your parents need additional assistance managing their money. But knowing when it’s time to start taking over some aspects of their financial life can be difficult to decipher. Here are some common signs that it may be time for you to step in and start helping your parents manage money:
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Piles of unopened mail may indicate they’ve fallen behind on bills.
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Losing track of wallets, cash, checks, or debit and credit cards.
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Making unusual or impulse purchases out of character for them.
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Regularly falling for scams or giving out their private information freely.
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Fading memory can result in missed payments, double payments, and incorrect payment amounts.
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Complaints about not having enough money even though they’re financially secure.
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Diminishing vision can affect their ability to drive and manage their finances accurately.
Tips for Talking About & Managing Money
There is no one right or easy way to navigate this complex topic. The most important thing is to approach the subject carefully and remain sensitive to your parents’ feelings around getting older and diminishing capacity for managing tasks. You know your parents best, so we encourage you to integrate these tips and guidance with your knowledge of your family to formulate an appropriate plan.
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Talk Early & Often:
Bringing up “the money talk” early ensures you have ample opportunity to discuss things while your parents are still of sound mind. This tactic gives everyone a much better chance of success, rather than being forced to rush into everything all at once if their mental or physical health suddenly changes. By being proactive, you can tackle big topics in small chunks and lay the foundation to speak more freely with your parents down the road.
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Take Small Steps:
When it is time to start managing some financial and other essential tasks for them, make small changes. This strategy allows you to take on greater responsibility and let your parents gradually give up their independence.
For example, rather than diving into fully managing their finances for them, ask them to add you as a joint member on their accounts. Or if they need help paying bills, perform the task together for a while before you take it over completely. This way, you can help when needed, but your parents still retain the freedom of managing money on their own.
Making a few minor changes at a time rather than diving in headfirst makes the transition much easier for everyone.
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Ask for Professional Guidance:
Consider meeting with a financial advisor to help navigate conversations about managing finances. Our advisors can offer their professional insight to help you determine what steps to take for your unique circumstances and provide personalized guidance and support – especially as it relates to their retirement accounts and future living expenses.
Conversation Topics to Cover
To help make this transition easier for you and your family, here is a helpful list that covers the most common items to consider discussing with your aging parents.
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Important Documents & Legal Information:
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Power of Attorney (POA): A legal document that gives an individual the authority to act on behalf of another individual. There are different types of Powers of Attorney, including Healthcare POA and Financial POA.
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End-of-Life Wishes: Your parents’ wishes for how they would like to be treated once they reach the end of their life will be addressed in specific legal documents. These documents may include their Living Will or Advanced Healthcare Directive, in which they can specify which treatments and procedures they do or do not wish to receive should they become incapacitated. Other final wishes may be addressed in a Letter of Last Instruction, which pertains to financial matters, funeral arrangements, and other personal affairs.
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Estate Planning Papers: These documents may include your parents’ Will, Trust, and Estate. Each of these documents addresses how assets will be managed and distributed either during the remainder of their lifetime or after death.
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Retirement: Discuss their current retirement plans and ensure you are aware of any relevant accounts they hold, such as 401(k)s from their jobs or Individual Retirement Accounts (IRAs). Ask your parents to confirm that they understand the withdrawal regulations for their accounts.
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Benefits: Verify if your folks are enrolled for any government-provided or job-related benefits they’re eligible to receive. Set reminders or create a calendar for upcoming enrollment periods and deadlines to ensure they don’t miss out on any available benefits.
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Day-to-Day Maintenance:
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Financial Accounts & Goals: Review all accounts and assets your parents own, including Checking Accounts, Savings, and Investments. Ask about anything else they may be saving for besides retirement and help them set up automatic transfers to their Savings Account.
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Make a List: Create a list of all important numbers and information, and make sure it is stored somewhere that is easily accessible. This list should include birthdays, Social Security numbers, Driver’s License numbers, insurance IDs, veterans IDs, Medicare/Medicaid IDs, and any other important numbers. You can also include a list of doctors, medications, pharmacies, bills, financial accounts, and anything else you may need.
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Streamline Their Finances: Cut out any inactive or underused accounts, subscriptions, or credit cards like retail store cards. Consolidate their existing financial accounts where possible and transfer those funds to the highest-earning options. Tackling this step can help your folks save money now and make managing their accounts easier for you later.
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Repaying Debt: Talk to your parents about any existing debts they carry and make sure they have a plan in place to pay off their balances or help them create a payoff plan.
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Paying Bills: Discuss when you may need to take over the responsibility of paying bills for them and how they would like to navigate that transition. Set up automatic bill payments to ensure all bills are paid properly and on time.
We’re Here to Help!
Assisting our aging parents can often be challenging. Becoming the responsible grownup for our parents is not ideal, but you don’t have to navigate this transition alone. We’re here to offer support and guidance throughout the transition. With the right resources and a clear plan, you and your parents can move forward together toward a more stable financial future for everyone.
We understand the importance of comprehensive financial planning and are here to offer guidance tailored to your unique needs. Please stop by the Credit Union or call 410-687-5240 to schedule an appointment.