By Financial Planning Standards Council
Aging doesn’t eliminate the need to maintain a household, pay bills on time or manage investments properly. But what it often does steal is the ability to handle these tasks effectively.
“There are many stages to being a senior,” says Lise Andreana, CERTIFIED FINANCIAL PLANNER® professional and author of three books including Financial Care for Your Aging Parents. “Many people remain active and don’t appear elderly right up to their mid-70s, but ill health or incapacity can happen at any time.”
Eventually, there may come a time when your elderly parent or parents can no longer manage their own affairs and you have to gently but firmly take the reins. This can be a very emotional transition – not only might you feel uncomfortable in your new role, but you may find your parents do their best to hide their need or diminishing well-being. Don’t expect them to simply pick up the phone and ask for help – it’s more likely they will do their utmost to keep it from you.
If you have elderly parents, you may need to be more intuitive instead of waiting to be asked. Ms. Andreana says there are often signs that things are not as they should be: unexplained bruises, forgetting to take medication or pay bills, car accidents, less interest in personal hygiene, hoarding food or perhaps the reverse – an empty cupboard. One-off, these slips often mean nothing, but when the behaviour is repeated, it’s time to take a closer look.
“For the average senior, these things begin to happen in their early 80s,” says Ms. Andreana. “One day you’ll notice that parents are doing less and their world is becoming smaller.”
Being responsible for the financial well-being of your parents can be very stressful, but you don’t need to go it alone. A qualified financial planner can help ease the burden and can show you how to best navigate all of the potential issues.
The key is to open an honest and straightforward conversation before these signs begin, continues Ms. Andreana.
With the help of a CFP® professional, you can have a better sense of where to begin and what to do next. For example, talk to parents about their values, what they want to leave behind and how they envision your role when they can no longer take care of themselves. Ensure that wills and powers of attorney are in place and updated to reflect those wishes, and that you know where bank, investment and credit card accounts are lodged. A CERTIFIED FINANCIAL PLANNER professional can also help you explore the costs and alternatives for ongoing care.
Don’t forget about your own financial well-being, too. One of the biggest costs of personal care for an elderly parent is time. When people quit their job in their 50s or 60s in order to care for a parent, they can jeopardize their own retirement, says Ms. Andreana. “Instead, work with a CFP professional who can help determine how long available dollars will last and help everyone make decisions based on the right plan and budget.”
In addition to planning for your parents’ financial well-being, you may also want to think about safeguarding and protecting them from financial abuse. Financial abuse of the elderly is the most prevalent of those reported, says Marta Hajek, director of operations with Elder Abuse Ontario. “It’s also one of the most difficult to identify. A family member may exert pressure to sell a home or sign legal documents that the senior doesn’t understand, caregivers may press for account PINs under the guise of helping manage finances, and individuals may be isolated from friends,” she says.
Here, again, it’s important to look for the signs: Is the elderly person uncomfortable when one sibling or individual is in the room? Are there strange purchases showing up on credit card statements or unexplained bank withdrawals?
In the end, taking the financial reins is tough, but it can also bring a sense of relief – after all, you have your parents’ well-being at heart, and they may feel relief in knowing that their financial interests are being dealt with properly, particularly with a CFP professional to guide and assist you in the process.
If you need help finding a CERTIFIED FINANCIAL PLANNER professional in your area, visit FindYourPlanner.ca