I used the friend approach. A friend who was helping her parents set up on -line banking, checking into assisted living etc. That way i was able to open up the conversation with my mom. Unfortunately - i discovered she never did 401K all of the years she was working nor did she save any money from her large divorce settlement. When we looked at assisted living costs i also found out she assumed i would give her $2000 a month that she didn't have for the assisted living. (i'd have to earn $3000 per month to have $2000 after tax). When she heard "can't afford that" the @#$# hit the fan, but we did find a beautiful assisted living pegged to income that she is still considering for "someday". It is a conversation you need to have before you get into crisis mode and try to figure it out.
I know, it's hard. 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.
jvalenti444, talking finances with one's parents is always difficult. Either they act like they are part of a witness protection program and refuse to give any information.... or they think what they have saved will get them through the next 5 or 10 years, but in reality it won't, because if they have memory issues they may still think bread is 25 cents a loaf.
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.
We have had this issue with our elderly aunt. She never married and has no children. I have told her there is no money and I do not give her money. As I got in deeper with the finances, she gave every charity $100 every year regardless of own financial situation. She then used her credit cards to pay her day to day living expenses. Needless to say, all credit cards were stopped and "paying" people to take her places has ceased. I buy all her supplies and control her income and I still give her very little money as she spends it on cigarettes while the taxpayers are paying for her inhaler for COPD. I pretty much tell her that she made her bed and now it is time to lie in it........
Misunderstanding of who pays what is a big issue across the country. When a friend of mine was diagnosed with lou Gehrig's disease at age 51 she eventually had live in aides. Our friends thought medicare paid for that! LOL When I explained it didn't, they asked where the money was coming from. Her savings! EACH of our friends said, they wouldn't last a year doing that! Her illness went for 8 years before she passed. And there was still money to distribute. No she wasn't a millionaire. And she didn't have a silicon valley or wall street job. BUT she did save for a rainy day and we drew down her retirement money , etc. 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.
Mom has always been a very independent person and all her life she was the accountant for her husband, both at home and at his private practice...he was a surgeon.
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.
I just want to say how blessed I was with parents who set aside funds incase they would need them. They paid off their home and that meant if needed, we could sell the house to meet their needs. My parents were not wealthy either, but they had learned to live through the depression and were careful how and where they saved and spent their money. They had a few investments (not a lot and some life insurance). They met with a lawyer and set up a Will and a Trust. I was their POA and am also the Trustee. Both of my parents are deceased now. We will do a final distribution from the Trust to all 5 of us heirs tomorrow. How greatful I am that my parents had the mind to prearrange many things for their final days! They truly demonstrated their love for their children by having transparency with me as their POA and allowing me to care for them in ways that would not have been possible had they not pre-planned. While being POA and Trustee has not been easy, I am truly appreciative of parents who showed great wisdom in planning for their latter years. This has encouraged my husband and I to consider how we can best bless our 3 kids when that time comes for us.
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 discussion needs to begin early- like in their early 70s. My parents were in denial that things would change and didn’t plan ! I find that irresponsible. I learned a lot from watching myself and my brothers scramble to get their lives in order and find them a medicaid facility once they needed full time care. It required 10+ years or planning by us kida to get their house and meager assets in a trust/ fix their home for them, shop for them , socially support them as they isolated themselves from people their own ages- etc. if you see denial from parents about their lives - I recommend calling it out and having tough talks. This website (aging.com) has ideas and resources to help.
I think there's sort of a catch-22 here. By the time our parents are elderly, it's really too late to do much to improve their finances. You can try to persuade them to tighten their belts and not spend so impulsively or on frivolous purchases, but even that can be a hard sell with a lot of people. It's too late for them to contribute to a 401(k), delay their retirement, or anything that could add real money to their savings.
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?
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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