Among those used to living independently, such impairment can have devastating financial consequences, because they’re both likely to make mistakes managing their money and because they’re more susceptible to financial scams. Seniors lose some $36 billion per year to elder financial abuse , with nearly half of that coming from legal but deceptive practices like pushy telemarketers or charity fundraisers, according to research from True Link Financial, a company that sells products and services to protect older Americans from financial abuse and exploitation.
In addition to worrying about their parents’ well-being, adult children must also face the reality that their parents’ money problems could become their own, if a parent eventually runs out of money and turns to their children for assistance.
If you’ve got aging parents and are concerned about their continuing ability to manage their own finances, here’s what to do.
Have a discussion now. It can be difficult for both parents and their adult children to contemplate a role reversal, but putting off the conversation isn’t going to make it any easier. “You want to talk about these things before there is a problem,” says Kai Stinchcombe, True Link CEO.
Rather than being confrontational, start the conversation by talking about your own finances or relaying the story of a friend who helped set up a support system for his parents.
Get your papers in order. You’ll want to arrange for financial power of attorney. That will give you the right to make decisions on mom’s behalf, should she become unable to do so.
Find out where your parents keep important documents, and check to see whether they’re up to date.
Put technology to use. It’s more common than ever for adult children to live geographically apart from their aging parents. That can make it difficult to keep regular tabs on a parent who might need it.
The power of technology can help: Enroll your parents’ bank accounts and other assets online, so that you can login remotely as needed and set them up for auto-deposit of Social Security or pension payments. “These days you can get to a point where you can pretty much get through your financial life without ever having to touch a piece of paper, and that’s where you want to get with an older parent,” says Howard Gleckman, author of Caring for Our Parents: Inspiring Stories of Families Seeking New Solutions to America’s Most Urgent Health Crisis.
There are also Web services, such as Eversafe or True Link that will monitor financial accounts and credit reports and alert you of any suspicious activity.
Enlist professional help. Meet in person anyone who helps your parents with financial decisions, such as an accountant, financial planner, or even a bank manager to establish a relationships now and to get a sense of whether they’re looking out for your parents’ best interest. If you think your mother or father may have trouble handling the everyday money tasks, consider hiring a daily money manager, to lend a hand.
- Beth Braverman