YOUR TURN: MANAGING MONEY FOR MOM & DAD
Michigan Credit Union League - Your Money Matters
“I never dreamed I’d end up managing my mother’s money.”
Lot’s of adult offspring have spoken those words as their parents age. As children, most of us got our first financial training from mom and dad. Ironically, today more and more older people need their children’s help to manage their money.
According to the General Accounting Office, nearly 13 million, or one in 20, Americans need a hand from others for daily needs. Of those, more than half is older than age 65. But less than a quarter of them live in institutions. Most reside at home or in community settings.
One of the most difficult aspects of elder care is financial management. Adults don’t like to make financial suggestions to their parents, much less take over managing their money matters. Yet sometimes the help of family and friends allows elders to stay in their own homes longer and to enjoy relative independence.
Helping your parents or other elders manage their finances begins with planning ahead. Encourage elders to share with you where they keep their financial records, including wills, insurance policies, credit union records, and pension documents. Simply knowing where to locate such records will lighten your load in an emergency.
If possible, become a joint owner of things like checking and brokerage accounts, so you’ll be able to conduct business in case of disability. If parents have a safe deposit box, make arrangements to have access to it.
One of the easiest ways to simplify financial record keeping — for both payments and receipts — is through direct deposit of income and automatic payment of regular bills. It’s easier by far to have Social Security, pension, and other income deposited directly to a share draft, checking or savings account than it is to depend on traditional methods.
Technology provides a fast, easy, and safe way to avoid delays in the payment process. And saving for a rainy day does not end with retirement and advancing age.
One of the most important jobs of adult children is to review elders’ insurance coverage. Many forms of insurance — health care coverage and long-term care insurance, for instance — become more important with age. Elders often are the targets for unscrupulous sales of products having limited benefits. Make sure the coverage and price are appropriate for their needs.
Proper planning will pay off in a big way in case of sickness or disability. Don’t try to go it alone. Get advice from legal and financial professionals. The up-front cost may seem steep, but the advice will save time, money and anguish in the long run. And, just as you’d choose a doctor who specializes in a particular procedure, find experts in dealing with the financial concerns of older adults.
In addition to paid professionals, seek help from social service agencies dedicated to assisting older individuals. Contact your local coalition of aging groups. The Eldercare Locator is an excellent place to start. It will direct you to agencies in your area that deal with your concerns. Call 800-677-1116, or visit the Web site at www.ageinfo.org/elderloc.
One final caution: Before you attempt to take charge of your parents’ lives, be sure they really need help. Many older individuals are perfectly capable of handling their own financial affairs. It takes sensitivity and perception to know when and if you should step in. Money is a sensitive subject, and you don’t want your folks to regard you as intrusive.
But if you start early and plan ahead — with the cooperation of your parents — you can save both them and yourself considerable distress. And you’ll give them the greatest gift of all — peace of mind for their senior years.