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Ensuring Financial Security and Wellbeing for Aging Parents

As the Baby Boomer generation continues to age and their children approach mid-life, the responsibility of caring for aging parents is becoming increasingly important.

The challenges of managing their financial wellbeing and ensuring a comfortable, secure retirement can feel overwhelming, especially for those who don’t know where or how to start. In addition to the financial challenges, caring for aging parents can also be emotionally and physically demanding. Many adult children are juggling their own careers, families, and other responsibilities.

Despite these challenges, there are several things you can do to ensure financial security and wellbeing for your aging parents.

Start honest conversations

The first step to securing your parents' financial future is to have open and honest conversations with them. The vast majority of aging parents want to talk about their wishes, with a recent survey stating that 53% would be relieved if a loved one started a conversation about their end-of-life wishes.

Having these difficult conversations with parents about their future health and wellbeing can be highly emotional. To make these conversations easier, start early, before any urgent medical issues arise that will already put parents under stress, be gentle in your approach and involve siblings and other family members in the discussion from the beginning.

Make sure to discuss their current financial situation, retirement savings, insurance policies, and estate plans. Understanding their assets is essential for creating a financial plan that addresses their needs and helps them reach their goals.

Create a financial plan

Once you have a clear picture of your parent's financial situation, you can create a comprehensive financial plan. This plan should include budgeting, retirement income projections, and account and tax information—to name a few.

To create a thorough financial plan, you’ll want to gather information on all of your parent's income sources, assets, liabilities, and expenses. Once you have gathered the specifics, you can assess your parent's financial needs and help create a budget. A budget will help you to track your parents’ income and expenses and ensure that they are not overspending. If your parents already have a financial advisor, ask if you can join them during their next meeting so you can get a better understanding of their financial plan.

Assess insurance coverage

Review your parents' insurance policies, including health, long-term care, and life insurance. Ensure that they have ample coverage to protect themselves against factors like unexpected medical expenses, or to provide for their loved ones at the time of their passing.

Consider long-term care planning

69% of Americans over the age of 65 will need long-term care, with 1 in 6 American workers providing care to an aging loved one in addition to holding a job.

As your parents age, the need for long-term care becomes more likely. Women are more likely than men to need long-term care and they typically need it for a longer period of time—long-term care can be even more important in cases of dementia.

Be prepared by researching available options, such as long-term care insurance, home healthcare services, or assisted living facilities. These choices can help maintain their quality of life without draining their savings.

Update estate planning documents

Ensure that your parents' estate planning documents, such as wills, trusts, medical directives, and power of attorney, are current. Make sure that you have your own notarized copies of each. It’s important their wishes are clearly defined and that their beneficiaries and decision-makers are properly designated.

Encourage a healthy lifestyle

Promote a healthy lifestyle for your parents by encouraging regular medical check-ups, a balanced diet, and regular exercise. Staying physically and mentally active can reduce healthcare costs and improve their overall quality of life.

Explore Social Security options

Social Security is a vital source of income for many aging parents. It can provide a steady stream of income to help them cover their basic living expenses. However, there are a number of different ways to claim Social Security benefits, and it can be confusing to know which option is best.

Social Security options available to aging parents include:

  • Retirement benefits: the most common type of Social Security benefit
  • Disability benefits: available to people who are unable to work due to a severe disability
  • Survivor benefits: available to spouses, children, and other dependents of deceased workers
  • Benefits from a former spouse


Consider downsizing

Downsizing is one of the most important financial decisions that aging parents can make. It can free up equity that can be used to cover living expenses, invest for retirement, or help with long-term care costs. It can also make it easier for parents to age in place safely and comfortably.

This is an emotional decision and can be a hard step for many aging parents. The goal is to have this decision made while the choice is still voluntary rather than mandatory (due to rapidly declining health).

Some of the key benefits of downsizing for aging parents are reduced living expenses,
smaller homes that are easier to clean and maintain, safer homes with fewer stairs and hazards, and, if they choose to move to a retirement community, the opportunity for more social interaction.

Seek professional guidance

Financial planning can be a large undertaking, and the rules, emotions and regulations surrounding retirement and elder care can change. Seeking the guidance of a qualified financial advisor or specialist can help ensure that you’re making the best decisions for/with your parents.

Preparing your aging parents financially for their last stage of life requires a lot of planning and open communication. By taking these steps and seeking professional guidance when needed, you can help make your parents' golden years truly golden. Visit OneDigital's Financial Academy for more resources to help you manage money more confidently and reach your goals.

Investment advice is offered through OneDigital Investment Advisors LLC, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.