When the time comes to help your parents begin the next phase of their life, they may come to you in search of a little guidance. The truth is that elder financial planning is a lot more complicated than it should be. Still the realities are what they are so it’s important that your parents not be under any misconceptions and that they know how to handle their money.
If your parents ever come to you for help with financial planning you should make sure you have all the facts on the table and you should be as honest with them as possible. With these rules in mind it’s possible for them to maintain a satisfactory quality of life.
One of the first things you need to do with elder financial planning is outline all your parents’ expenses. What are their annual property taxes? If they don’t own their home what is their monthly rent? What about medications? Utilities? Regular doctors’ visits? Food? Transportation? Incidentals?
Next you need to figure how much income your parents have coming in. When you are talking about elder financial planning that income can take a variety of forms: Social Security, a pension, 401k distributions, investment income, or some other work-related income.
If your parent(s) ever get an inheritance or a similar one-time payout, you shouldn’t count that as income. Instead, use these to pay down debt and cushion their savings. Also, do your parents have any stock investments, bonds, mutual funds, bank CD’s, outdated accounts, or other overlooked investments which could be added to the list?
Once you‘ve figured their income and expenses, the next thing to do with elder financial planning is to figure how much is left over each month. There will hopefully be an ample enough amount left over so that your parents can continue to live with the quality of life they deserve to enjoy. Just like anything else with financial planning, there could be a small margin of error so you may want to make sure that you have as much information as possible.
At the end of the day elder financial planning is a pretty basic thing; the particulars and complexities lie in the individual variables combined with the unexpected health issues which plague many elderly people. If you can’t figure it out or you need some help then it’s a good idea to talk to an experienced and objective financial professional that specializes in this area. Look for an individual that’s not only impartial but also experienced in handling situations like yours.
It can be difficult sometimes to watch your parents get older; but if you can help them get through this new phase of their financial lives your parents and your conscience will both be the better for it.
— Chip Gordy, MBA, CRPC is a Financial Advisor with Coastal Wealth Management, LLC, 10441 Racetrack Rd, Unit 1, Berlin, Md., 21811 and specializes in Wealth and Retirement Planning. He can be reached at 410-208-4545 or chip@coastalwealtmgmt. com. Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Coastal Wealth Management LLC & Cambridge are not affiliated. The views expressed are not necessarily those of Cambridge and should not be used as investment advice to buy or sell securities mentioned.
If your parents ever come to you for help with financial planning you should make sure you have all the facts on the table and you should be as honest with them as possible. With these rules in mind it’s possible for them to maintain a satisfactory quality of life.
One of the first things you need to do with elder financial planning is outline all your parents’ expenses. What are their annual property taxes? If they don’t own their home what is their monthly rent? What about medications? Utilities? Regular doctors’ visits? Food? Transportation? Incidentals?
Next you need to figure how much income your parents have coming in. When you are talking about elder financial planning that income can take a variety of forms: Social Security, a pension, 401k distributions, investment income, or some other work-related income.
If your parent(s) ever get an inheritance or a similar one-time payout, you shouldn’t count that as income. Instead, use these to pay down debt and cushion their savings. Also, do your parents have any stock investments, bonds, mutual funds, bank CD’s, outdated accounts, or other overlooked investments which could be added to the list?
Once you‘ve figured their income and expenses, the next thing to do with elder financial planning is to figure how much is left over each month. There will hopefully be an ample enough amount left over so that your parents can continue to live with the quality of life they deserve to enjoy. Just like anything else with financial planning, there could be a small margin of error so you may want to make sure that you have as much information as possible.
At the end of the day elder financial planning is a pretty basic thing; the particulars and complexities lie in the individual variables combined with the unexpected health issues which plague many elderly people. If you can’t figure it out or you need some help then it’s a good idea to talk to an experienced and objective financial professional that specializes in this area. Look for an individual that’s not only impartial but also experienced in handling situations like yours.
It can be difficult sometimes to watch your parents get older; but if you can help them get through this new phase of their financial lives your parents and your conscience will both be the better for it.
— Chip Gordy, MBA, CRPC is a Financial Advisor with Coastal Wealth Management, LLC, 10441 Racetrack Rd, Unit 1, Berlin, Md., 21811 and specializes in Wealth and Retirement Planning. He can be reached at 410-208-4545 or chip@coastalwealtmgmt. com. Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Coastal Wealth Management LLC & Cambridge are not affiliated. The views expressed are not necessarily those of Cambridge and should not be used as investment advice to buy or sell securities mentioned.