It was smack-dab in the midst of a rollicking family feast during our annual summer sojourn of sun and fun when my mom first uttered a sentence that began with "When your father and I are dead."
I think I was 11 at the time.
Over the years, such depressing foresight became both a running theme with my mom and a running gag among family.
I'm long past the age of finding amusement in those planning efforts, however. In fact, I'm one-upping my mother by helping see to it she's well looked after financially in the here and now.
With our aging population growing rapidly, I'm certainly not alone in this concern. According to the Department of Health and Human Services, by the year 2030, there will be 72.1 million people over age 65, more than twice the number in 2000.
When the time comes to serve in this capacity, it's important to get a lay of the land.
The following are some helpful questions:
- Where do your parents keep their financial records?
- What are their monthly expenses, and how are they paid?
- What is their monthly income, and from where is it derived?
- What financial institutions do they use, and what are the account details?
- Do they receive any form of government assistance such as Medicare, Medicaid, or Social Security?
- What is the contact information for their accountant, financial planner, or any legal representative they've enlisted?
- If they have power of attorney or living trust documents, where are they located?
It's a long list, to be sure, but one that will give you a good roadmap on how best to work together for a comfortable future for all.
The job of helping with your parents' finances, one often thrust upon unprepared offspring, is much more than just paying the bills. For a helpful education on the myriad duties and responsibilities, the Consumer Financial Protection Bureau, or CFPB, has published a series of guides called "Managing Someone Else's Money."
Nora Eisenhower, assistant director for the Office for Older Americans at the CFPB, said that while many older Americans have lived frugally in anticipation of their later years, "it's critically important that they and their resources are supported by a financially savvy loved one who understands" the responsibilities of handling such finances.
If you have siblings and have been deemed "the organized one" tasked with overseeing your parents' money matters, it's critically important you keep good record of everything you do. Sure, family is family, but money is money, too.
Let's say you need to access a safe-deposit box -- do it with a witness. When you write a check, pay a bill, or meet with a financial professional, keep detailed notes as proof that you are handling your duties responsibly.
Keep in mind your parents were the prideful people who instilled sound financial values in you and probably won't advertise it's time to turn the tables. They may be too proud or independent to let you know they need assistance with their finances, so it'll be up to you to keep an eye out for signs.
Even parents in good health and of sound mind may have trouble managing their finances. A study by the Center for Retirement Research at Boston College estimated that 40% of retirees between 67 and 80 suffer a decline in income and assets, typically because of the loss of a spouse. Other reasons for the decline include poor spending habits, inflation, inappropriate investments, and a failure to plan adequately.
A parents' parent to-do list:
- Be observant, listen, and keep eyes open for subtle changes.
- Encourage parents to use professional advisors for taxes, investments, and other complicated financial transactions when necessary, especially for parents who don't live nearby.
- Utilize resources that allow you to securely co-manage bills and accounts, such as Manilla Bill Share.
- Know with whom your parents talk to or see, whether it's a friend, relative, or caregiver. Financial abuse can come from anywhere, sometimes the least likely suspect.
- Put parents on the no-call list for telemarketers. For help in doing this, visit the National Do Not Call registry at http://www.donotcall.gov/.
- Most importantly, make yourself available to your parents. It's time you're there for them.
Jim Staats is a technical support analyst at Manilla.com, the leading, free and secure service that helps consumers simplify and organize all of their bills and household accounts in one place online or via the four-star-plus customer-rated mobile apps. He has a bachelor's degree in industrial technology from California Polytechnic State University at San Luis Obispo. Wedged between stints supporting products at firms including Intuit and Sybase, Jim worked as a journalist reporting on real estate, business, technology, and other issues for print and online publications.