As we age, our finances may become more complex. The challenge to elders can be both emotional and financial. In addition to the cost of living increases, there are many other factors that contribute to the need for elder care. The following advice will help parents keep their aging parents safe, comfortable, and financially stable.
One way to help is by giving them a little extra money each month. This practice is not only beneficial for the elderly but also helps relieve some of the stress they might be feeling while caring for their loved ones. There are two ways to do this:
1) Set up a trust fund with an annuity that allows your parent’s bank account to continue growing at a fixed interest rate for a set number of years or
2) Add an additional amount into their checking account every week or month (up to $2000/yr).
A trust fund allows your parents’ bank account to grow without any risk–in the event something happens to them,.
Elderly Behavior
Elderly behavior can be deceiving. It may appear that they are unaware of what’s happening, but the reality is that many elders living in poverty have a higher-than-average risk of experiencing financial abuse. With this in mind, it’s important to be aware and alert as you watch your parents’ behaviors.
One way to monitor their behavior is by looking at their bank accounts daily or weekly. If they seem to be spending more than usual or if there is an unusual withdrawal from the account, it may be time to step in and ask them about the situation. When people are forced into situations where their money is being taken away from them, elderly financial abuse becomes a significant issue.
Expensive Care
As your parent’s age, the costs of care can grow exponentially. It is important to be prepared for this expense and to make sure they won’t be left in a state of financial disarray when their time comes. There are many services that can help with this–in-home care, nursing homes, and assisted living facilities.
Another way to help is by starting an estate plan that safeguards your parents’ assets and provides them with the support they need if something should happen to you and them.
Financial Safety
It’s important to build a financial safety net for your parents so that they’re not worried about their finances. Here are some ways to help them:
– Set up a trust fund with an annuity that allows your parent’s bank account to continue growing at a fixed interest rate for a set number of years or
– Add an additional amount into their checking account every week or month (up to $2000/yr).
– If you have children, create a will. You can also designate guardians or nursing homes.
Managing Money
for Elders
You want to make sure your parents are taking care of themselves. One of the easiest ways to help is by reviewing their bank account regularly. You can do this by checking the balance, reading their emails, and keeping up-to-date with what they’re spending their money on.
The other strategy you can use is to set up a recurring monthly payment that automatically goes into your parent’s bank account. This option will allow your parents to know what they have coming in, without you having to worry about it.
1) Set up an automatic payment for $50 or more each month or
2) Set up an automatic payment for $100/month over six months or
3) Set up an automatic payment for $200/month over three months or
4) Set up an automatic payment for $300/month over two months
How to Set Up a Trust Fund or Annuity
According to the Federal Reserve, you can set up a trust fund or annuity for your parents by filing Form TSP-3 with the Office of Personnel Management (OPM). It’s important to note that if your parents are working, they will need a letter of authorization from their employer.
To set up an annuity, you need to open an account and issue a certificate of deposit (CD) to your parent. The bank will provide an annual interest rate based on the amount of money that was invested–the higher the amount, the higher the interest rate. When they cash out and withdraw money, they’ll receive a monthly payment of the accrued interest.
Setting Up a Regular Payment Plan
If you choose to set up a trust fund with an annuity, this will require your parent’s bank account to be open for the year. You’ll need to take them to the bank and explain how this will work. The safest option is for your parent’s bank account to be closed. This way their money is not at risk and they are still able to enjoy their retirement by continuing saving.
You can also add an additional amount into their checking account every week or month (up to $2000/yr). This option also allows them a little more freedom as it allows them some discretion over when they receive the money.
Conclusion
There is no doubt that aging parents can be a challenge for their children. In order to help them, it is important to understand the many factors that come into play when they are coping with their finances. The following article discusses how to help your elderly parents manage their money, how to set up a trust fund or annuity, and how to set up a regular payment plan.