Caring for your elderly parents finances can be a tricky situation. Having the conversation with them about paying their bills and saving money in savings accounts, money market accounts, or cd accounts is not going to be easy but there comes a time when you do need to take over. Seniors are constantly targeted for fraudulent investments and many times their trusting nature and poor memory can lead seniors to lose thousands or hundreds of thousands of dollars.
Power Of Attorney
It is important to establish a power of attorney for your parents needs. This individual will be responsible for carrying out the final wishes of your loved one. In some families the parents will appoint this to one of their children in other families it could be a close friend or their lawyer. The power of attorney will need to step in when people suffer from dementia or Alzheimer’s and are considered incompetent to make their own decisions. Your parents need to mull over this decision carefully and choose the correct person to be their power of attorney.
Create A Plan
When you sit down to talk to your parents about their finances it is important to come prepared with a financial plan. Clearly show them everything related to their income and expenses so they can see how much money they have to spend each week. Include some short-term investments like money market accounts or CD accounts to show them how they will continue investing in their elderly years. Be open to them and listen intently, it is their money after all and you need to be supportive of their wishes. Create a financial plan that includes medical expenses along with long-term care needs.
Elderly parents need to be informed of their financial situation. Some parents may like to carry around cash to pay for their groceries and other things where others feel comfortable with writing checks or using credit cards. Make sure you are sitting down with them monthly or weekly to go over the bills and to show them exactly how much money they have.
Continue To Invest
Some children are re-active more than pro-active with their elderly parents financial situation. Do not wait until your parents are struggling to pay their bills and confused with their finances, start when they are still able to do a lot of the budgeting on their own. Talk to them about their investments and make sure they are not placing money into high risk investments. Individuals in their 70s or 80s need to have a very low-risk investment approach. Money market accounts and CD accounts provide them with an opportunity to earn interest money, even if it is not a lot of money. Some of the other investments to consider include treasury bills and bonds. This will provide them with low-risk but also gives them flexibility with their investments so they can easily access them in the event of a medical emergency.
Take the time to meet with your elderly parents and help them to manage their finances now so you can save yourself a headache in the future!