There may come a time when we have to or want to help seniors with finances. As our loved ones grow older, one area they may lose the capacity to manage successfully is their money. There are factors and situations that if and when, we don’t help seniors with finances, they may be vulnerable to fraud and loss. Indeed, according to the National Institute of Justice, 5% of Americans aged 60 and over have been a victim of financial abuse by a member of their own family and 6.5% have been similarly abused by non-family members. MetLife Insurance has estimated that nearly $3 billion is lost by the elderly each year to financial fraud, so knowing how and when to help seniors with finances becomes very relevant and very important. Here’s how:
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1. Pensions
Financial decisions can be tricky at any age with mortgages, tax, welfare and pensions seeming particularly confusing, so if an elderly person in your life is struggling with the intricacies of economics, there are several ways that you can help seniors with finances. If pensions are baffling your parents or an elderly family friend, seek advice from trusted financial sources on the range of pensions available or investment plans, so that you can help weigh up the options available and allow them to come to a decision themselves. Sometimes people just need an explanation of some of the finer points of a pension so that they can make good decisions on their finances in the future, and if their pension pot is held in high risk places, a simple juggle of their pension portfolio may be all that is needed to get things back on the right track.
2. Health Insurance
Health insurance is very important and it is reassuring to know that bills will be paid should an accident or illness occur. Accidents can happen at any time to anyone, and some people simply sign up to health insurance without finding out all of the details, and in the event of certain circumstance, they may not be covered. It is important to go over all of the small details of health insurance with seniors to ensure that the appropriate coverage is available, especially with pre-existing health conditions. This may be a sensitive subject as people may not want to discuss their aches and pains with relatives or friends, but it is essential to ensure that this matter is handled delicately so that appropriate health insurance is purchased.
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3. Retirement
While it may not be appropriate for everyone, many elderly people may not take too well to retirement and the desire can often be strong to continue in their career. While a full time job at the age of seventy may not be an ideal scenario, if the person is enjoying the job and performing well, doing the role part time or working from home could be financially helpful. Be careful as there may be extra tax forms to fill out, so if a senior person is keen to return to work when receiving their pension, visit a financial adviser together to make sure that all regulations are being adhered to... and to see what benefits are gained by going back to work versus retirement. Essentially the decision will lie with the person themselves, but at least you will be there to help with the decision and discuss the details.
4. Security
With the changes in technology over the years it is a good idea to keep an open dialogue with seniors to ensure that no one is using their cheque books, cards etc. to obtain money for purposes other than those stated to them. Ensure that you help seniors with finances and issues of security and identity theft as much as possible to prevent abuse of their money.
5. Power of Attorney
If a senior’s mental health is deteriorating, it may be a good idea to discuss power of attorney with them before they reach crisis point, to ensure that a trusted person is put in charge of their finances should their situation become so difficult that they are unable to make sound financial decisions. With power of attorney, the selected person can make decisions on the behalf of the elderly person to pay bills and deal with any other financial matters.
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6. Beware the Scams
The phrase ‘Mum knows best’ may be used a lot but sometimes elderly people can be an easy target for new scams and cons with many people signing up to contracts or giving out their bank details over the phone to cold callers so it is vital to discuss this with parents to ensure they don’t fall into this trap. Parents have been around and seen a lot of different things but they can also be trusting as well as wise. It can be easier for con artists to tug on the heartstrings of elderly people to ease open their purses, so if you hear of any scams being executed in the local area or countrywide, be sure to inform parents, elderly relatives etc. with appropriate action to prevent them losing money in a scam. They may not thank you for the advice at the time but they will be glad if they swerve a con.
7. Keeping Records
Most importantly of all, even though seniors may have managed their finances perfectly adequately their whole lives, lots of things have changed, so encourage them to maintain full financial records regularly and make sure they are aware they can ask for help at any time. Offer to help seniors with their finances and their money records because they may find it difficult to ask for it themselves and it it is better to spot a problem and deal with it before it gets bigger.
I hope these tips have shown you how important it is to help elderly family members with finances. It’s sometimes hard to accept our loved ones are getting old and unable to deal with things they way they used to but we can help them in so many ways and helping them look after their money is just one of them.
