How to help aging parents with their finances
November 28, 2005
From MSNBC:
Talking to your older parents about their finances is as hard for youas it was for them to talk to you about sex. Both conversations,however, are absolute must-haves. But this month you have an edge. Thenew Medicare drug plan has opened for enrollment and that gives youjust the opening you need to have a conversation about finances and thefuture with your folks. Here’s a look at the ground you want to be sureto cover:
- Make sure they’re on stable financial ground.Your parents, thankfully, will likely live a lot longer than theirparents before them. It would be nice (for all involved) if whateverassets they’ve stockpiled for retirement (supplemented by SocialSecurity) could last as long as they do.
But in order to make thathappen you need to understand — or to bring in a trusted financialadviser who understands — how your parents are living today. Do theyhave a substantial pension? Are they draining their savings? Or arethey subsisting on Social Security? In other words, do they have enough? - Helpmake their money last. Although the financial industry (and financialwriters like me) have a lot of emphasis on accumulating assets, wehaven’t talked enough about withdrawing money from retirement accountsin a way to make it last. If your folks aren’t sure how much they cansafely withdraw each year, four percent of total assets is usually agood starting point.