Developing a financial plan for aging parents
Aging is not only a physical and emotional process; it involves financial aspects that are sometimes overlooked. A time will come when your parents won’t be able to manage their lives as they used to be, and for some, this can be especially true about their finances.
While your parents’ need for assistance may be some time away, it is certainly better to start planning in the present than struggle in the future.
A well-prepared retirement plan includes the financial and logistic features that are able to set your parents toward a sustainable trajectory.
Involve Your Parents
Even though finances can be a sensitive and personal topic, you won’t be able to help and make a plan if you are unaware of your parents’ financial situation.
Below are some important questions to consider when creating a financial plan alongside your parents.
Where would they like to age?
Aging in place is a very common and understandable desire. After decades of building a life, nearly 80 percent of adults over 50 would prefer to age in their own homes (Davis, 2021). However, this is not always possible due to economical aspects, among other barriers.
If your parents choose to age in place, consider all the expenses this may represent:
– Transportation:
With age, reflexes change and people over 70 are more likely to be involved in a car accident. Considering a budget to get around by taxi, public transportation, Uber, or even hiring a driver.
– In-home care:
Watering the plants, preparing meals, household cleaning and chores, or even showering might represent a risk for some adults. In this case, in-home care can help avoid potential risks.
– Grocery shopping:
Going for groceries may not be an easy job. Besides transportation, carrying heavy bags can be a challenge. Consider a weekly budget that includes transportation and grocery bills. There are helpful websites that deliver groceries to your door for a monthly fee.
Do they have a will?
Encourage your parents to talk to trusted advisors to have or update their will. Communicating among family members to know who the executor is will avoid logistical and financial issues later on.
Have they made funeral arrangements?
Thinking about losing a loved one can be hard. Unfortunately, we don’t know when this could happen regardless of age. According to Forbes, the median cost of a funeral is $6,970 (Egan, 2022).
Talk to your parents about the kind of funeral services they would like to have. With this in mind, add this aspect to your savings plan. You can consider buying funeral insurance to cover the funeral or cremation costs, as well as final expenses.
Power of attorney
Talk to your parents about their interests and make agreements. A power of attorney will give you the power to decide in the event of medical, financial, or general situations.
In case your parents suffer from health challenges such as dementia, a power of attorney will provide you with the legal authority to make decisions for them.
Make sure to speak with your parents to know what they’d like in different situations so you honor their needs and wants.
A power of attorney could be granted for a certain time or in certain circumstances. Get close to an experienced attorney to discuss the importance of this.
Consider Tax Laws
It’s worth taking a look at the current tax laws and getting advice from a tax attorney to know your parent’s current situation and possible taxes they might face in the future.
Balance personal needs and personal situations
Supporting and providing care for your parents might be something you will face. Changing your job to save more money or have more time for your parents is something you may consider to be more relaxed in the future.
At 24/7 Nursing Care, our goal is to provide individualized referral services tailored to your needs. Our team is available to speak with you 24 hours a day, seven days a week even on holidays. Give us a call at (786) 518-3622 in Miami-Dade or (954) 949-1332 in Broward.
RESOURCES:
- Aging in Place | A Guide to Growing Older at Home. (2022, May 6). RetireGuide. Retrieved May 12, 2022, from https://www.retireguide.com/guides/aging-in-place/#:%7E:text=Aging%20in%20place%20is%20the,identify%20necessary%20home%20modification%20projects.
- Company, B. (2018, August 8). Caring for Elderly Parents? 4 Conflicts When Making a Care Decision. The Ashford Independent & Assisted Living. Retrieved May 12, 2022, from https://www.theashford.com/caring-for-elderly-parents-4-conflicts-when-making-a-care-decision
- Davis, B. M. R. (2021, November 18). Despite Pandemic, Percentage of Older Adults Who Want to Age in Place Stays Steady. AARP. https://www.aarp.org/home-family/your-home/info-2021/home-and-community-preferences-survey.html#:%7E:text=%EF%BB%BF%22%20Data%20%EF%BB%BFshows%20that,on%20this%20topic%20since%202018.
- Egan, J. (2022, January 19). How Much Does A Funeral Cost? Forbes Advisor. Retrieved May 12, 2022, from https://www.forbes.com/advisor/life-insurance/how-much-does-a-funeral-cost/
- Healthy Aging: Is It Time to Stop Driving? (n.d.). KAISER PERMANENTE. Retrieved May 12, 2022, from https://healthy.kaiserpermanente.org/health-wellness/health-encyclopedia/he.healthy-aging-is-it-time-to-stop-driving.zx3961#:~:text=People%20age%2070%20and%20older,or%20die%20from%20these%20crashes.&text=There’s%20no%20set%20age%20when%20everyone%20should%20stop%20driving.
- Randolph, J. M. D. (2020, August 11). Estate Planning When You’re Elderly or Ill. Www.Nolo.Com. Retrieved May 12, 2022, from https://www.nolo.com/legal-encyclopedia/estate-planning-when-you-re-elderly-ill.html
