Money can be a sensitive subject to discuss, but you’ll need to talk to your parents about it in order to get to the root of their problems and come up with a solution. Before you start the conversation, consider the following four scenarios as signs that your parents might be experiencing financial challenges, and how you can make things easier for them.
1. They are Dealing with Debt
Perhaps your parents have fallen behind on their mortgage or credit card payments. Maybe they’re dealing with the aftermath of a large, unexpected medical bill. Or it could be that years of generously supporting their children and grandchildren have left their finances in shambles.
Whatever the cause, debt among older Americans is a growing trend. In 2010, the average debt for a family in which the head of household was age 75 or older was $30,288. In 2016 (most recent data available), that number grew to $36,757.1
2. They are Falling for Fraud
According to a report by the Federal Trade Commission, older adults have been targeted or disproportionately affected by fraud. Moreover, older adults have reported much higher dollar losses to certain types of fraud than younger consumers.2
Why do scammers target older individuals? There are many explanations for this trend. Some older individuals lack an awareness about major financial issues. Others may be attractive targets for scammers because they have access to retirement account assets or have built up home equity. Additional factors that increase an older adult’s vulnerability to scams include cognitive decline and isolation from family and friends.
3. They aren’t Used to Managing Finances
The loss of a spouse can create many challenges for the survivor, especially if the deceased spouse was in charge of finances. Many widows or widowers might find themselves keeping track of statements, paying bills, budgeting, and handling other financial matters for the first time, which can be a complicated reality to face.
4. They Struggle with Change
As financial institutions continue to innovate and increase online and mobile access to customer accounts, it can be difficult for older consumers to keep up. For example, some older adults may struggle with accessing their financial information online. Others might get frustrated or confused when financial institutions implement new policies and procedures, especially if they’ve had an account with an institution for decades.
One report described the most common issues that older consumers identified with bank accounts or services. The top three complaints involved account management (47%), deposits and withdrawals (27%), and problems caused by low funds (12%).3
Ways you can help
Regardless of the reasons why your parents might be having money problems, there are steps you can take to help them.
- Set up a meeting with a financial professional. Encourage your parents to meet with a professional to evaluate their financial situation.
- Help them reduce spending. Look for big and small ways that they can scale back on expenses, such as downsizing to a smaller home, cutting cable plans, or canceling unnecessary memberships/subscriptions.
- Have them tested for dementia. If you’ve noticed behavioral or memory changes in one or both of your parents, share your concerns with a medical professional. Cognitive decline can result in difficulty managing finances.
- Lend money (using caution). If you decide to help your parents monetarily, consider paying your parents’ expenses directly rather than giving them cash so you can ensure that their bills are paid on time.
- Help them apply for assistance. The National Council on Aging has a website, BenefitsCheckUp.org, that can help you determine your parents’ eligibility for federal, state, and private benefit programs.
If you have questions or need assistance, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
1 Debt of the Elderly and Near Elderly, 1992-2016, Employee Benefit Research Institute, 2018
2 Protecting Older Consumers: 2017-2018, Federal Trade Commission, 2018
3 Monthly Complaint Report, Vol. 23, Consumer Financial Protection Bureau, May 2017
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
