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Financial Planning

Financial checklist for clients with aging parents

Are any of your clients among the one in seven adults in the United States helping take care of an aging parent?

If so, in addition to emotional and physical support, they may be responsible for helping their parents with their finances as they get older.

How can your clients help their aging parents with finances?

Remind your clients that even if their parents are retired and not as active as they once were, there are still plenty of reasons they should keep a close eye on their financial well-being, from monitoring credit to managing retirement account distributions.

We've put together a checklist you can share with clients to help them better understand how to help parents with their finances as they age.

Financial checklist for aging parents

Check mark Keep an eye on their retirement savings.

After retirement, your parents will be responsible for managing their retirement savings. Make sure they are keeping expenses in line with their plan so they can afford to do the things they are passionate about.

Check mark Monitor credit reports and beware of identity theft and fraud.

Everyone is entitled to a free credit report each year from each of the three reporting agencies. Go to to request reports. Make sure each agency has accurate information; there may be differences from one agency to another.

Check mark Be prepared for required minimum distributions (RMD) at 72.

The IRS requires a minimum distribution from employer-sponsored retirement plans such as 401(k), 403(b), 457(b) and IRAs. Mandatory distribution involves tax implications and decisions regarding which assets to designate. Work with an accountant and financial professional to learn how the rules will apply to your parent's specific situation.

Check mark Consider delaying Social Security distributions for as long as possible.

When should your parents apply for Social Security? Taking early withdrawals at age 62 could decrease the benefit amount by as much as 25%. For this reason, financial experts often recommend postponing benefits if at all possible. That said, each situation is different and deserves careful evaluation. Don't expect the Social Security Administration to be an advocate for your parents. Seek the counsel of a knowledgeable financial professional.

Check mark Keep an emergency fund current.

Your parents should continue to maintain a healthy balance in a savings account emergency fund to offset unexpected expenses. This may allow them to avoid tapping into any less liquid investments held in retirement accounts.

Check mark Stay in close contact with a financial professional and accountant.

Work closely with a financial professional to maintain a comfortable balance of investment risk. Now's the time to get savvy about the rules and tax implications associated with withdrawals in retirement. Before your parents consider taking retirement fund distributions, they should consult with an accountant or financial professional.

Check mark Discuss their living situation.

Do your parents own a home that they plan to stay in for the long term? If so, make sure they consider any remaining mortgage payments as well as the costs that come with maintaining a home. They may want to consider other options, such as moving to a less expensive area or downsizing to a smaller home or senior living community. Also keep in mind that even if your parents are active and healthy now, they may need a home that can accommodate changing physical needs as they get older. Now's the time to start thinking about other options such as assisted living or long-term care facilities.

Check markAssess the most advantageous tax deduction strategy.

When your parents pay off their mortgage, they may significantly reduce their itemized expenses. Taxpayers 65 and older have a higher standard deduction. Using the standard deduction may be more beneficial than itemizing deductions. An accountant will know the rules about what deductions apply.

Check mark Consult with an estate planner and/or eldercare attorney.

Many financial professionals specialize in estate planning and ways to protect the value of your parents' estate and minimize the tax burden of those who may inherit from the estate. If your parents haven't already planned for the distribution of their assets, this may be a good time to do so. An attorney can help them protect the rights of a surviving spouse; deal with Medicare issues; draft trusts and wills; and prepare other needed legal documents.

Check mark Create a master information document.

Although it has no legal effect, a master document can be an important tool for the person responsible for cleaning up an estate after someone passes away. It's basically a document that explains what and where all the assets and debts are and how to handle accounts, including information on what needs to be done to close them out and get the assets to the people who should have them.

Interested in more ways to help your clients who may be caring for elderly parents? Find out what your clients should know about elder financial abuse



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