Growing Your Aging Parent's Wealth During Their Golden Years
Conventional wisdom among elderly retirees and near-retirees generally imposes certain principles; in fact, axioms of blindly accepted truths upon which their financial lifecycle should follow. Logically speaking, the working years are a time when a person should squirrel enough financial assets away, while simultaneously growing those assets to eventually provide the necessary income stream during retirement. This is often referred to as the accumulation phase.
Upon retirement, many elderly parents believe that the time to accumulate and continue to grow a hard-earned nest egg has now been completed. In fact, further being able to grow wealth after retirement is often thought to be impossible. At this juncture, conventional senior wisdom asserts that the focus must instead be exclusively on beginning to find a way to create a paycheck that will sustain them through a lengthy retirement. This is known as the distribution phase. In short, the general belief continues, there should be a clean cut between these two phases: your elderly parent's working years and the growth of their assets should end, while their retirement years and the distribution of those assets begins. There is no middle ground, right?
While the above scenario sounds reasonable, if not typical, it's one that could be a recipe for disaster. In fact, despite the above beliefs, retirement is not a time to forget what afforded your aging parents the ability to retire in the first place—wealth generation! Sure, their 50s and 60s are a time to begin contemplating, if not enjoying retirement, living off the hard-earned fruits of their labor, and pursuing goals they may have set aside in the past. But it is not a time where it's permissible to assume that their level of wealth will immediately and irrevocably begin their steep decline or move forever sideways. Doing so could permanently alter the well-intentioned plans.
With proper planning, not only can you help your senior parents leave a legacy that will last generations, help provide for your children's college education, or establish a program for charitable giving, to name a few of the common goals of elderly retirees and near-retirees, but you can also help your elderly mom or dad continue growing and creating wealth well throughout their retirement—if you follow these three principles.