In December, US News columnist Kate Stalter published an article that covered some of the most frustrating aspects of helping to manage an aging parent or relative’s investments. She also gave some helpful tips for family members (usually adult children) who are trying to help avoid elder abuse and fraud or simply to avoid financial missteps for their aging relatives.
As I may have mentioned before, seniors who are currently in their 70s to 90s (often called the “Greatest Generation” or the “G.I. Generation”) tend to value their independence and autonomy above other values. This can make discussions about finance a touchy subject. Stalter makes an interesting point about how to approach these discussions: don’t have the discussion in your parent’s home. She mentions that the kitchen table (for example) of the family home, while comfortable, symbolizes the parent-child role, and it is where “they [the parents] are in charge.” A more neutral environment might be the best place to have this discussion with your family.
Stalter cited an ongoing study by Daniel Marson of the University of Alabama at Birmingham (funded by the National Endowment for Financial Education) which noted that there were generally a few very specific warning signs that financial cognitive trouble might be occurring for older adults. These warning signs included problems with everyday arithmetic and difficulty identifying risks in investment opportunities.
Interestingly, seniors also may become overconfident about their control of their finances as they age. Not only do seniors tend to want to handle their finances all on their own, they may also overestimate their ability to navigate their investments and banking decisions as they get older.
Every senior is different, and some people might need help early on (even as early as in their 50s) while others might be able to handle their own finances well into their 80s or beyond. Stalter encouraged families to work together with their parents and aging relatives by sharing financial info so that errors, possible outside financial abuse, and missteps could be caught quickly or avoided altogether.
Although Stalter suggested that parents and children share the parents’ financial info via online apps such as Mint or eMoney Advisor, these systems might be somewhat difficult for elderly persons to navigate if needed. A better idea might be to start with sharing paper copies of account statements or summaries of financial accounts. This would create a good starting point for parents and their children to help manage investments and financial decisions together.
However you help your parents, it is important to know that without guidance, many seniors do not have the ability to see that their financial competency is declining. Broaching this subject may take patience or repeated attempts to convince your parents that they are ready for help, but it is much better to become comfortable with these discussions before financial troubles are already at hand.