According to research from the Indiana University School of Medicine, about a quarter of people age 65 or older have at least slight cognitive impairment. For many adult children of this group, the stat brings up an important question: When should you step in and take over – or at least assist with – your parents’ finances?
It’s a question Elly knows well. She says she’s at the beginning stages of helping out, checking in periodically to make sure her mother, who is still living independently, is on the right track. She’s also helping her sell some property and generally making sure her mother’s bills are paid – at this point it’s more about prompting and reminding her mother to pay them, rather than stepping in and writing the checks.
How do you assess where your parents stand – and how much help they need?
Check out the bills. Are there piles all over the house? If you remind your parent to pay, have they already done so or have they forgotten? As in Elly’s situation, bills can tell you a great deal about whether your parents are staying afloat. Make sure they are opening their mail, staying on top of what needs paid when, and actually making the payments on time. If they’re not, it’s a sign they need some help.
Watch purchases. If a steady stream of expensive items are flowing through their doors – particularly if there is no rhyme or reason to the purchases – it may raise a red flag that spending is out of control. Many people don’t realize the reality of making their money last in retirement – it can feel a bit like a vacation with no end date. Get them on a budget that allocates how much they can spend each month, both on fixed expenses and discretionary items. Then help them stick to it.
Take note of calls from creditors. This is obviously a red flag and a signal that the bills aren’t being paid and spending may be out of control, particularly if your parent seems confused about why the calls are happening or what they are in reference to.
Recognize a lack of mobility. Being unable to get around in general may also mean your parent is not able to get to the bank or the post office. Consider it a call for you to step in and help. People in this age range may not be able or willing to bank online, so you can either set up and manage that system for them, or help them get to and from the bank or ATM as needed.
Get a power of attorney. It’s important to put a power of attorney in place to handle financial matters sooner, rather than later. Whether that’s you, a sibling, or another family member, get the documentation set up so someone will be authorized to make decisions down the line. Likewise, it’s important to talk through all of these issues before they come up.