Each day between 2011 and 2030, 10,000 baby boomers will celebrate their 65th birthdays. As the boomers grow older, their middle-aged children may find themselves in a challenging situation: providing financial assistance to their parents as well as their own kids.
If your parents are entering retirement, it's wise to plan ahead for any financial and legal responsibilities they may expect you to take on.
Starting the conversation
These days, 65 is hardly considered old age. But it's crucial to sit down with your parents and have an honest discussion about issues that may arise—before they need your help. What are their expectations for the future, and what kind of assistance will they need from you? Will they have sufficient resources to cover their care as they age?
As part of this conversation, be sure that they have their important documents and information organized. You'll want to know where to locate key items, including:
- Wills and legal documents
- Investment, bank, and insurance account numbers
- Safe deposit boxes, real estate deeds, and automobile titles
- Emergency contact numbers (medical providers, neighbors and friends, and professional advisors)
Looking into legal matters
If they haven't done so already, your parents may want to seek an attorney's assistance with issues such as:
- Appointing a health care representative. Without legal authorization, medical privacy laws prevent doctors from discussing a parent's medical conditions with you. In addition to appointing a health care power of attorney, your parents may want to consider a living will.
- Reviewing and updating estate planning documents. Besides the basic estate planning documents, such as wills, durable powers of attorney, and revocable trusts, your parents may wish to draft a letter outlining who will receive personal effects like jewelry and family heirlooms.
Discussing their financial situation
Depending on your parents' situation and financial savvy, they may need help managing their money as they age. Making arrangements now can help prevent confusion down the road.
- Look into banking options. Most banks offer automatic bill payment services from checking or savings accounts—a convenient option if your parents are comfortable with the Internet.
- Review insurance coverage. Be sure to discuss your parents' existing life and long-term care policies, and make changes if necessary.
- Enlist an advisor. Now may be a good time to get to know your parents' financial advisor, or to talk with your own advisor about their situation and strategies to help them meet their goals.
Looking to the future
As your parents age, a number of other considerations will likely come into play. Will they be able to continue living at home? How long will they be able to drive? While these topics may be difficult to discuss, it's important to start the conversation early—for your parents' sake as well as your own.
And remember, you don't need to make these difficult decisions alone. We're here to support you and your parents with strategic planning for the next phase of their lives.