As soon as you and your aging parents sign the power of attorney document, you must immediately create a long-term financial plan. Without a solid plan in place, your family could face major financial hardships in the near future. Here is a look at some tactics and strategies that you can use to help your aging parents manage their money.
Start Downsizing Immediately
Nearly 30 percent of the senior population has no money left over at the end each month after covering their essential expenses. That is just one of the many reasons why you should help your parents downsize as much as possible. Moving into a smaller home and replacing their new cars with reliable used vehicles could end up saving them thousands a year.
Speak With a Tax Specialist
State and federal taxes change dramatically after an individual retires, and many older adults don’t realize that they qualify for dozens of tax credits and exemptions. Hiring a tax specialist once every few years should be thought of as an investment in your parents’ future. A tax specialist or financial adviser can also make sure that your parents’ retirement accounts are being properly handled.
Consider Upgrading Their Health Insurance
Almost every older adult is going to face at least a few health issues over the years, and insurance is their first line of defense against skyrocketing medical bills. A comprehensive policy will cover a wide variety of expenses ranging from emergency room visits to dental implants. Their insurance is also going to help them cover some preventative treatments that improve their overall quality of life.
Learn to Delegate
Trying to cover every daily chore and errand on your own is completely impractical. Delegating those tasks to professionals will cost a little extra money initially, but it is going to free up quite a bit of your time and make your life less stressful. Many companies offer affordable cleaning and food prep services specifically for older adults who need a little extra help.
Schedule Biannual Family Meetings
Once every six months, you and your parents should sit down and go over every aspect of their finances. During those meetings, you need to take a look at their expenses as well as their income. You can also discuss issues such as upcoming medical treatments or changes to their retirement accounts.
In addition to these few tips and tricks, you also need to keep an eye out for any signs that your parents might be struggling with cognitive health issues. Even if your parents are independent right now, there may come a point when you need to take over all of their financial responsibilities in order to avoid serious problems.