If you help to manage the care of an aging parent or family member, you’re in good company. An estimated 50 million Americans, often women, are the unpaid caregivers of their older loved ones. These numbers are only expected to skyrocket as large numbers of baby boomers continue to reach retirement age.
Often when we think about the type of care a family member provides, the traditional ones come to mind. This could include helping with basic household tasks like cooking or cleaning or helping with personal care and medical needs. What isn’t as widely talked about – and is equally important – is the importance of managing a family member’s financial affairs, especially when an older family member’s ability to do so is becoming increasingly difficult.
The importance of having a family member in this role cannot be understated and it can take time to convince an aging parent that it will ultimately benefit them to grant access to view their online banking and other resources. A first step may include setting up a parent with an online account. However, this is becoming more commonplace and a recent report cited that 72% of those 70 and over have entered the world of online banking.
Roughly 92% of caregivers are also financial caregivers, which includes spouses, adult children, relatives, partners or even friends who provide unpaid financial assistance or support to someone 50 or older. The majority of financial caregivers assist their relatives, most typically their parents.
Types of financial caregiving
The duties and responsibilities of financial caregivers can vary considerably, based on your family member’s own unique needs. Generally, the most frequent task they may help with is paying bills, whether they are still living independently or in some type of assisted living or care facility. They may also help to manage their bank accounts, keep track of their investments, assist with navigating the complex world of health insurance including Medicare and Medicaid and help with taxes.
Why financial caregiving is important
Understanding an older parent’s financial picture can be tricky, especially if they are initially hesitant to share details with family members out of embarrassment of the desire for privacy. And it can be even more challenging if an older parent is dealing with more intensive healthcare needs or experiencing an illness or injury, and your immediate focus is on other more pressing matters. But keeping their financial picture on track is essential to keeping their lives stable, effectively planning for the future and avoiding financial difficulties or pitfalls down the road.
It’s even more imperative when you realize that older adults are major targets for financial abuse and fraud. Medicare fraud, telemarketing tactics or phishing scams that specifically go after the elderly can wreak havoc and be devastating to their financial futures. The sooner you can get a handle on and understand their financial landscape, the sooner you’ll be able to spot the warning signs of unusual or unauthorized activity and spare them the often devastating effects they bring.
Cognitive changes or decline
Sometimes identifying the need to step in to help your aging parents with their financial needs can be subtle and hard to spot. Other times it can be much more apparent when bills begin to pile up or there are financial errors or red flags you begin to notice. If your parent is dealing with the slow-dance of cognitive decline or confusion from a disorder such as Alzheimer’s disease, vascular dementia or another progressive condition, they will need complete financial oversight to make sure their finances are protected. Consider becoming their financial Power of Attorney (POA), a critical and urgent step to take as soon as possible so that they remain out of harm’s way.
Strategies for financial caregiving
Naturally, the ideal time to begin the process of understanding your parent’s financial picture is early in the game, when they are in a state of stable health, both physically and cognitively. If you’re fortunate to have family support, consider calling a family meeting with your parent or loved one along with other family members, if appropriate. It can also be especially helpful to consult with a financial advisor who is well-schooled on the specialized needs of older adults, especially the nuances of planning for long-term-care needs down the road.
Keep meticulous records
Financial caregiving can be complex, especially when you are juggling many balls in the air. Remaining well-organized, keeping detailed records and documentation is key to ensuring your family member’s financial records are in the best possible state.
Becoming a financial caregiver for your aging parent is an important part of ensuring their present circumstances remain on solid ground and ensuring they are well-positioned to greet the future. It’s a crucial piece of the puzzle in providing for your loved one’s financial health and well-being as you lovingly partner in their complete care. Comprehensive online tools such as Kincern can make this task easier and less stressful for the entire family and provide peace of mind as well.