Family conversations about money often times involve the parents educating their children about money. But for some of us, there comes a day when these traditional roles are reversed, and the adult children find themselves helping their parents figure out their finances.
AOL’s DailyFinance looks at what to do if you find yourself needing to financially assist your parents during their later years. Many retirement-aged individuals these days find themselves financially underprepared due to debt, a paucity of retirement savings, or a combination of the two.
The article suggests a first step in helping elderly parents: sitting down and getting a clear picture of their current financial state. Be sure you get a complete look at their debts and assets, and try to find any recurring expenses that can be cut. Getting rid of these items can add up to significant savings.
Once you have this clearer picture, don’t make any rash decisions. If you find any debts beyond your loved ones’ control, you may want to think twice before you officially take them on. A seemingly helpful action like co-signing on a loan could affect your financial standing as well as theirs. Instead, you could simply gift your parents some funds to help them out.
The article also suggests resisting the urge to use your parents’ 401(k)s or IRAs to pay off debts. Funds from these vehicles can become susceptible to creditors if they are made liquid.
You might also try to protect your parents from making bad decisions. Their age may make them easy prey for scams, or even make them forgetful when it comes to paying their bills. If such instances happen, you may need to take steps to assure that they don’t happen again. Many organizations assist the elderly with financial planning services. Don’t be afraid to make an appointment for outside help from an expert who may have more solutions.
Have you found yourself having to assist your retirement-aged parents? What advice do you have for someone in this position?