Aging with Financial Security: Practical Steps for Planning Your Parents’ Finances
- UENI UENI
- Jan 10, 2024
- 3 min read
There are often red flags you may notice that indicate your parents have reached a point where they need help with their finances. At first, your parents might be resistant to this, believing they can still manage their financial lives. To avoid a potential misunderstanding, it is critical that you clearly communicate your concerns. Some of these red flags to be aware of include:
They are making odd purchases or being careless with their money, which is out of character.
Creditors are beginning to call.
Scammers are targeting them through phone, snail mail, and email and you believe they are vulnerable.
They struggle with normal behaviors, such as balancing their checkbooks or forgetting to turn off the stove and lock their doors at night.
This is a difficult time for everyone involved. But the sooner you take action, the easier it is to mitigate unfortunate events from occurring and for you and your parents to start adjusting to the changes.
Consider these practical steps for helping your parents plan their finances:
Collect And Organize Financial And Legal Documents
Not only does it provide you with a better picture of where your parents stand financially, but it is also pivotal for decision-making and taking necessary actions on their behalf.
Keep A Separate Record Of Important Account Numbers
Maintaining up-to-date and accurate records is crucial when it comes to financial planning. If you don’t have a record of the account numbers, it will be difficult to monitor for security purposes and manage accordingly.
Stay Organized And Keep Your Parents’ Finances Separate From Your Own
Ensure you stay organized and keep your parents’ finances separate from your own. This can help mitigate the risk of misunderstandings or uncomfortable questions being asked. Family dynamics can be a sensitive subject to discuss, but even more so when it comes to money. A potential solution for this is to develop a transparent culture of discussing finances and making informed decisions together. Several techniques for staying organized include:
Create a budget for your parents’ expenses.
Maintain a payment schedule for bills.
Continue to make manageable goals to work toward.
Stay Vigilant Against Identity Theft And Scams
Identity theft and scams targeting the elderly are getting worse, and people can lose significant savings to these predators. Several methods to help protect parents from financial scams include:
Monitor their credit report or, if necessary, lock their credit and freeze their Social Security number.
Become their power of attorney.
Regularly communicate with family members in case they notice red flags.
Be on the lookout for scams and block potential scammers.
Verify everything with trusted or qualified people.
Safeguard personal information, including regularly changing passwords, shredding documents, and ensuring parents are only giving information when necessary and to verified parties.
Regularly review their accounts for any misuse of funds or strange activity.
Talk To Them About Power Of Attorney
Powers of attorney can be an effective tool when managing your parents’ finances and estate planning. Some of the benefits of a power of attorney include:
Making financial and personal decisions on their behalf.
Working through insurance issues and helping them save money.
Paying bills on time.
Monitoring accounts against fraud and scams.
Updating beneficiaries in the event of death or the wishes of the parents.
Revising other aspects of the estate plan.
Consult A Financial Professional
Financial planning is complex, and in a world that is constantly shifting and evolving, it can be extremely challenging to prepare yourself and your parents for potential roadblocks. Decisions made today may impact you decades down the road. Having the most accurate financial plan for your parents is beneficial in both the short and long term, and also can help you avoid expending time and resources to correct any missteps.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Sources:
This article was prepared by LPL Marketing Solutions
LPL Tracking # 623856
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