Your own money issues are probably on your mind daily: paying the bills, saving for retirement, perhaps putting your kids through college. You may even be worried about your kids’ financial future: will they rack up too much student loan debt? Be able to find a job? You probably don’t think about your parents’ money all that often. After all, they were the ones who raised you and taught you (hopefully) about earning, spending and saving. But there are some things you should know about your parents’ finances as they age.
Change is Challenging.
It might seem kind of funny to watch your elderly parents try to figure out a cell phone or an iPad. But it’s no joke when they struggle to manage their finances because they can’t keep up with the technology. When they started banking, you needed to walk into the bank and hand a paper slip to the teller to make a deposit or withdrawal. Your statement came in the mail every month, and you paid bills by writing checks. Now, you can do all your banking from your smartphone.
These changes can be difficult for an older person. Banks might put new policies or procedures in place that are confusing or frustrating. Whether an older person has physical problems seeing a screen or manipulating technology, or simply can’t get the hang of digital banking, they might have difficulty accessing their financial information and completing transactions. They might be too proud to ask for help, so you might want to gently check in.
Another type of change can also wreak havoc with a senior’s financial affairs. Widowed older people whose spouse took care of the finances may not be used to managing their own money. They may struggle with reading statements, making a budget, or paying bills. Again, don’t wait for them to ask—offer help.
They Could Be Targets.
Financial fraud is on the rise in this country, often aided by technology. The Federal Trade Commission has reported that seniors are often targets of scams, and have been disproportionately affected by fraudulent schemes. What is more, older Americans who are fraud victims often lose more money than younger people.
There are a number of reasons scammers go after seniors. Older people often have accumulated assets, from retirement accounts to home equity. They may, as noted above, be inexperienced with the internet and technology and thus be easier to manipulate. Being honest themselves, they may be more inclined to trust others. And, if they are lonely, isolated from family or friends, or experiencing cognitive issues, they could simply be easier to take advantage of.
Older People Have Debt, Too.
While many seniors have nest eggs that can make them a target of scammers, others have significant debt—often much more than their children know about. Your parents may have lent you a hand financially without asking for repayment, or insisted on helping your kids pay for college. They may have run up credit card debt, refinanced a mortgage, or had significant medical expenses.
If your parents are in debt, they are not alone. The amount of debt carried by households headed by someone 75 or older has gone up about 20% in less than a decade. Your parents may be worried about growing debt, but may not want to burden you with their concerns, especially if they know you have your own.
Helping Older Parents With Their Finances
Fortunately, there are things you can do to help protect your parents’ finances and ease their worries. A big one is to help them cut back on spending. Are they hanging on to the family homestead because they want to pass it on to you? Encourage them to downsize to a smaller home that will cost less to maintain. While you’re at it, help them draw up a budget and look for expenditures that may be able to be cut, like big cable plans or unnecessary subscription.
Consider taking your parents to meet with a financial professional who can evaluate their finances and make suggestions about problem areas.
If you’re worried that your parents’ bills are not getting paid on time or in full, try to figure out why. Are they struggling with digital banking? See if you can make a date to take them to the bank on a regular basis, and to sit down once a month and pay bills with or for them. If you suspect cognitive decline, share your thought with your parent’s doctor and ask that they test for dementia.
Consider taking your parents to meet with a financial professional who can evaluate their finances and make suggestions about problem areas. If your parents simply don’t have enough income, they may be able to apply for assistance. A website established by the National Council on Aging, BenefitsCheckup.org, can help you find out if they may qualify for various government and private benefits.
Talking to your older parents about their finances is hard, but so is worrying about them—and so is suffering in silence. Talking will help you all feel better. If you think you might need to take over your parents’ finances or need the input of an elder law professional, we invite you to contact our law office to schedule a consultation; we are here to help.