Five Strategies To Help Prevent Financial Difficulties In Seniors
Care At Heart shares 5 strategies to help prevent financial difficulties in seniors
You may have been financially reliant on your parents when you were younger, but as they age, you may need to step in to assist them in managing their own funds.
Fixed incomes, unforeseen medical bills, growing costs, and even con artists can put an elderly person’s finances in jeopardy.
There are methods to help prevent financial financial difficulties in seniors without jeopardizing your own financial goals, which is the good news.
You may start working together on a plan to get them back on firm financial ground once you have a complete picture of their financial status.
Step 1: Organize yourself.
The first step, according to Thomas C. West, CLU, ChFC, AIF, senior partner of Lifecare Affordability Plan, a financial management solution for older persons, is to comprehend your parents’ balance sheets, this help seniors in financial difficulties.
You’ll want to know what assets they have in addition to their liabilities, and you’ll want to obtain a sense of their cash flow.
“It isn’t uncommon for adult parents to downplay any financial issues that they might have,” West says. I would advise adult children to work carefully and hard in order to obtain as much comprehensive information as possible.”
It would be beneficial to let your parents know they aren’t alone in their battle.
According to a recent survey, baby boomers owe an average of $28,672 in non-mortgage debt, which is somewhat more than what the average millennial owes.
Step 2: Set goals and make a plan.
The second strategy to help prevent financial difficulties in seniors is to determine what you can offer in terms of money or time.
If you have siblings, each of them could be able to help you in a different way.
For example, you could volunteer to help with snow removal so that your parents don’t have to pay someone, and your brother could handle the cable bill.
However, West advises being self-aware of your personal situation when seeking financial assistance to prevent getting into difficulty.
You may face difficult decisions along the way, such as whether to help your parents pay off their debt or save for your own child’s school.
When presented with a difficult decision, West recommends talking through what would happen if you didn’t pay each bill in order to decide your top priority.
Are there any expenses that, if not addressed, may have unacceptably negative consequences?
If someone is going to be discharged from a nursing home, for example, paying for their care may become more important than paying off your mortgage early.
If you do decide to make a financial contribution, keep in mind how complicated your finances can become.
If you co-sign a loan or add your parents as authorized users to your credit cards, you may be held accountable for their debt in the future.
Step 3: Seek outside assistance.
Consider assisting your parents in locating the tools and resources they require to make better financial decisions on their own if it makes sense.
This can help you prevent financial difficulties in seniors, save money and emotional stress.
The best options for your parents will be determined by the areas in which they require the most assistance.
Consider directing them to the National Foundation for Credit Counseling, a nonprofit organization that assists people with debt management plans, if getting out of debt is a priority.
Alternatively, if you believe your parents require financial literacy assistance in order to properly comprehend their situation, you could refer them to the Consumer Financial Protection Bureau’s online resources.
You might also check to see if your parents are eligible for any state or federal assistance programs. They may also be eligible for Medicaid or SNAP if their income has changed.
While such programs can not directly assist with debt, they can assist with medical and food bills, respectively.
The VA Aid and Attendance program may be able to help you save money if one of your parents is a qualifying veteran.
You might also check at local options that could assist with other costs, such as low-cost transportation for seniors.
Step 4: Keep your parents safe from scammers
West advises checking your parents’ credit records to make sure they haven’t already been targeted by crooks.
Consider putting a freeze on your credit reports once you’ve checked them for mistakes. A security freeze, often known as a credit freeze, is the most effective approach to prevent new accounts from being opened in their name.
Only your parents can disclose credit reports for inquiries if you have a credit freeze in place.
You should also teach your parents how to recognize scam warning flags.
Remind them not to click any links in emails or texts from unknown senders, and to keep their financial information private.
Report the incident to the Federal Trade Commission if you feel your parent has previously been a victim of fraud.
If you’re not confident in your parent’s ability to spot a scam, it’s time to consider taking over their financial decisions.
Step 5: If necessary, obtain a durable power of attorney.
A “durable” power of attorney is a legally enforceable instrument that your parent signs to authorize you to make financial or medical choices on their behalf if they become incapacitated.
“You have to maintain someone’s independence until they reach a point where they aren’t making decisions in their own best interests,” West adds.
However, you should prepare the document before the situation becomes critical so that your parent can sign it.
You shouldn’t be the only one who makes the choice.
“Make sure you have an objective third-party present to help you assess if pursuing a power of attorney is appropriate,” West advises.
Then, to prepare the documentation, employ an expert local attorney.