Talking to Aging Parents About Their Finances
Do you know if your parents have a will? If anyone is trying to sell them an annuity? If they are paying all of their bills? If you answered no to these questions, it may be time to have a conversation with them. You may be groaning right now – who enjoys talking about money? – but doing this can help ensure your parents’ well-being.
Encourage your parents to contact the creditors/service providers for any bill they are struggling to pay. (If preferred, you may be able to talk to them yourself with your parents’ permission.) Many creditors offer hardship programs – short-term arrangements that allow you to make smaller payments. Utility companies frequently have payment assistance programs for limited-income customers.
For aging parents suffering from memory problems, bills may go unpaid simply because they forget. Handling the bill-paying yourself is one possibility, but if you do not have the time, you may find it helpful to use the services of a daily money manager. Daily money managers assist with financial tasks, such as opening and paying bills, balancing checkbooks, and organizing and filling out paperwork. Professional daily money managers charge a fee for their services, but low-income seniors may be eligible for free assistance through a volunteer program. (You can contact your local Area Agency on Aging for more information.) Of course, since there is the potential for abuse, you should choose a daily money manager carefully and periodically check up on his or her work.
Long-term care costs
If your parents do not already have a plan for financing their long-term care, help them create one. Putting aside a set sum each month can help your parents amass a good chunk of change, but if they do not already have a significant amount of savings, it may be difficult to save enough now to completely cover their costs. Besides saving, another option is to purchase long-term care insurance. Many policies cover both nursing-home and in-home care costs. The best time to purchase this insurance is when you are in your 50s or 60s. Since there are many different provisions to consider, you and your parents may want to talk with a qualified insurance advisor about what would best meet their needs. Long-term care insurance is expensive, so it can be tempting to go with whoever offers the cheapest policy, but avoid purchasing one from a company with questionable financial health.
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