Caring for Aging Parents While Securing Your Own Financial Future

Allworth financial advisor Allison Scoggin, CFP®, shares strategies for managing the financial and emotional responsibilities of caring for aging parents while staying focused on securing your own financial future.

 

 

If you’re caring for aging parents, you’re probably facing a unique balancing act—managing their needs while trying to secure your own financial future. As a financial planner, I see this scenario often. It’s both rewarding and challenging, and it requires a thoughtful approach to ensure that both your parents’ well-being and your own financial health are maintained.

Here are some practical steps to help you support your loved ones without sacrificing your future stability.

1. Get a Clear Picture of Your Parents’ Finances

One of the first things to do is gain a full understanding of your parents’ financial situation. This can be a delicate conversation, but it’s essential to have an honest discussion about their income sources, debts, savings, and expenses. It’s also a good time to ask about their insurance coverage and any existing long-term care plans.

Why it’s Important: Knowing the details will help you anticipate future needs and avoid surprises down the road. If you’re managing this without clear information, unexpected expenses could crop up, putting you in a tight spot.

How to Approach It: Start by framing the conversation around your shared goal of ensuring they’re comfortable and well-cared for. Emphasize that knowing their financial picture is about helping them maintain independence and security, not about prying into their personal business.

2. Explore Long-Term Care Options Together

Long-term care is one of the biggest financial challenges for families. The cost of assisted living, nursing homes, or in-home care can add up quickly, especially as needs become more complex. Talking with your parents about their preferences and looking into options together can help you plan for this, even if it’s down the road.

Consider Options Like:

• Long-Term Care Insurance: If your parents don’t already have it, look into whether it might still be available and beneficial for them.
• Veterans Benefits: If either parent is a veteran, there may be benefits available to help cover care costs.
• Medicare and Medicaid: Learn about what these programs do and don’t cover, as this can help in decision-making.

The Bottom Line: Preparing for long-term care options before they’re needed gives you and your parents a clear roadmap and some peace of mind.

3. Set Boundaries Around Financial Support

Many people feel a strong sense of duty to financially support their aging parents, especially if they’re facing unexpected medical or care expenses. While it’s natural to want to help, be cautious about sacrificing your own financial goals—like retirement savings, debt management, or emergency funds—to do so. You need a financial foundation for yourself, too.

Ways to Set Boundaries:

• Decide What You Can Reasonably Offer: Assess your finances to determine what you can afford to contribute without derailing your own plans.
• Communicate Clearly: It’s okay to let your parents know that you’ll do what you can, but that your support has limits. This transparency helps set realistic expectations for everyone involved.

Helping your parents doesn’t mean putting your own security at risk. Remember, the goal is to support them sustainably, not to drain your resources in the process.

4. Update Legal and Financial Documents

When caring for aging parents, making sure their legal and financial documents are in order is essential. These documents help you understand their wishes and give you the authority to make decisions if they’re unable to do so.

Important Documents to Review:

• Will: Make sure it reflects their current wishes.
• Power of Attorney: This authorizes someone to make financial or legal decisions if your parents are unable to.
• Healthcare Directive: This document details their medical wishes in case they cannot communicate them.

Taking Action: Schedule a time to review these documents with your parents and an estate attorney, if needed. It’s much easier to handle these things now, when they can fully participate in the decisions.

5. Prioritize Your Own Financial Future

While it’s natural to want to focus on your parents’ needs, it’s equally important to keep sight of your own financial goals. Saving for retirement, paying down debt, and building an emergency fund should all be on your radar as you support your parents. 

Strategies to Keep You on Track:

• Automate Your Savings: Make contributions to your retirement accounts automatic so you’re consistently investing in your future.
• Create a Separate Emergency Fund: Consider setting up a fund specifically for any unexpected expenses related to your parents’ care. This keeps your own emergency fund intact.
• Stay in the Conversation: Revisit your financial goals periodically to ensure you’re still on track. Working with a financial advisor can be incredibly helpful here, giving you both perspective and accountability.

Balancing Caregiving and Financial Well-being

Supporting aging parents while managing your own finances is no easy task. It requires patience, planning, and open communication. The key is to approach it with a clear plan—understand your parents’ needs, protect your financial boundaries, and keep your own goals in focus.

Remember, you’re not alone in this journey. Many people are navigating similar situations, and there are resources and support systems available. If you’d like to discuss strategies tailored to your family’s unique needs, I’m here to help. Let’s work together to find solutions that support both your loved ones and your future.

Allison Scoggin, CFP®

Partner Advisor

No matter what changes may happen in life, I believe it’s possible to refocus any situation in a way that helps to create positive change. That is why I love being a financial advisor and helping my clients listen to their inner voice and change their outcomes for the better.

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