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My parents were very secretive about their finances until one day I received a call at work from my parents banker. (Yes, they had their own banker) He said they only have enough money to live on for 2 more years. Apparently the banker had been warning and telling them for years that they need to sell their huge house and downsize. With the help of the banker (talking with them), I got DPOA and took over paying their bills online. I always thought that they were well off but they were just trying to keep up with the Joneses. It took another 2 years to convince my parents that they need to sell and move, they were in complete denial.
Have a banker do it over the phone? If I told my parents myself, they wouldn't believe me because they see me as 12 years old.
This discussion is also difficult when one's parents has saved for those "rainy days" big time, rolling in money, but refuse to let go of one thin dime when they really need to hire people to help them around the house.
When it comes to why didn't the parent save for their golden years, we need to stop and ask ourselves why did this happen. Maybe it was totally out of the hands of our parents? Maybe they were paying for their own parent's care, which could easily wipe out a good savings account very quickly. Maybe it was the lack of good jobs back when they were younger.
Or the parents spent like there would be no tomorrow. Money was burning a hole in their pocket. And now when they need funds for their elder care, there are none.
In any event, it is too late to correct the situation, what is done is done. Thank goodness for Medicaid [which is different from Medicare] to help out in situations like this.
Just make sure you or another family member was assigned to be Power of Attorney for your parents. That way, the POA can make financial recommendations when the parent can no longer make good decisions on their own.
I have friends (and there are folks on here) who figure that medicaid will pay. And they do when it is needed. But in my region of the country, the places that accept medicaid are pretty dismal. From my perspective, I'd rather have choices IF I can. I do understand there aren't many options for a lot of people. But this type of inquiry always makes me remember that we all need to save for our own care. Knowing what is available in your own community is powerful information and helps manage expectations.
When I applied for her Medicaid as her POA in order for her to be able to enter a nursing home (she has alzheimer and vascular dementia), I had to close her credit card and watch that her SSA income was managed correctly. She is now on Medicaid and only keeps $105 each month of the SSA income.
Each day, Mom wants to know how her money is doing - she still thinks she has a great monthly income and does not realize that most of it is actually going to pay for her nursing facility. She tells me everyday "take my credit card and go have fun" and "take $100 from the bank for you."
Rather than tell her over and over that she has limited income, I now just say, "Okay Mom. Thank you." Although I do not take any of her funds, my acceptance of her offer helps her maintain her self-pride and feel that she is still in-charged of something in her life.
That is now. When she was still living with my husband and I, I had to take her checkbook away (not an easy feat) as she kept writing checks to anyone who asked without putting in the register how much and to whom was each check. I caught a $500 mistake that took me a week to address with the bank.
How to talk to parents about finances? You can't. They are stuck in their own ideas of what they have. It is their illusion. So, if you already have POA, then do what you know is best to protect their funds and tell them whatever will give them peace.
Seriously? I would have lied to my dad before telling him he was out of money. I went so far as to tell my sisters that should Pop run out of funds, we would lie to him and each of us kick in a third to carry him. They agreed.
Fortunately, once I got Pop's affairs in order, he had more than enough to meet his monthly bills and have some extras besides.
The other prong is that, during their working years, most parents resist discussing finances with their children and feel it's none of your business what they have or whether they're saving enough. My mother certainly didn't ask our opinions when she decided to retire at 58 and use her inheritance from her parents to pay the bills until her SS kicked in. That was a dreadful mistake, but the grown kids had no say in it.
Now, at 87, my mother's finances are an open book. I do her taxes and my sister balances her checkbook. It's way too late to fix anything, though. I think she involves us because she expects us not only to correct any mistakes but kick in for any shortfalls. After all, she can't, right?
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