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Making Sure Loved Ones Are Prepared for Their Retirement Years

02/25/2015 12:43 pm ET | Updated Apr 27, 2015
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If a senior relative faces a sudden, debilitating illness or starts losing control of everyday finances, would you know where his or her retirement, estate and long-term care issues stand?

If the answer is no, you're not alone. In many families, it takes a crisis -- a prolonged hospital stay or problems at home with neglected maintenance and bills or even evidence of fraud -- to instigate this conversation.

Even if your older relative is fiercely private about finances, don't wait to have this conversation. Consider approaching them now for two reasons:

  • Today's money mysteries can overwhelm families later. Key family members need to know whether an older relative's retirement resources -- pension, investments and savings -- are being maximized to comfortably meet living expenses and potential serious health or long-term care needs. If those resources are found to be lacking, family members should work together to help the senior correct the problem or assist in meeting the shortfall.
  • Emergency and caregiving plans should be decided and shared. According to 2013 research from the Pew Research Center, four in 10 U.S. adults are caring for a loved one with significant health issues. All adults -- not only seniors -- should have legal documents including wills and powers of attorney in place to guide financial and health decision-making in an emergency. Further, key family members should meet annually with the senior relative to update these plans for any changes in financial or health status, giving the senior an opportunity to redirect their wishes if they choose.

To jumpstart this conversation, here are some suggestions:

Find the missing links. Key family members may not know if a senior has legal health and financial directives in place or where their relative keeps their retirement, investment, insurance, banking or physician information. Start by making a list of what you and other key family members don't know about the senior's planning, and consult outside resources to help you make a list.

Schedule a family financial meeting. Ask your senior relative for a specific day and time you and key family members can meet. Depending on the senior's willingness to do this, it may take some time and multiple invitations, but be persistent. It is not always necessary to involve all direct family members in a preliminary discussion, but make sure that relevant individuals are aware of the meeting. Work with your senior relative to assess his or her financial situation, identify next steps and specific responsibilities.

Locate important documents and accounts. A senior relative may say they have critical documents in place, but you actually need to know where they are. Ask the senior to show you where he or she keeps the will and health, finance and business (if applicable) directives to guide money, health and end-of-life issues. Also, locate where checkbooks, insurance policies and investment or savings account data are if you need to find them. Ask how your senior organizes monthly bills so family members can keep payments current if the senior cannot.

Consider seeking financial counseling. Any number of reasons, from illness to fraud, may explain how an individual can lose control of their personal finances. If the senior has been working with a qualified financial or tax advisor, the family team should know who those professionals are in case they need to meet with them later. Sometimes outside tax, financial or legal professionals can enable or mediate tough parts of the discussion. You, your senior relative and key family members should discuss who those professionals should be, what their fees are and what you expect them to do.

Make and agree on a plan. After all the information gathering and discussion is complete, make a plan -- in writing, if possible -- to review the senior's wishes, set an action plan and assign responsibilities as necessary. As mentioned above, review this plan every year. If problems emerge in any topic area from retirement to health issues, you'll find guidance throughout the Practical Money Skills for Life website.

Bottom line: Asking older relatives about retirement, estate and long-term care preparations can make for uncomfortable conversations. Making a plan and initiating early conversations to involve the right people can ease the financial strain and stress on everyone involved.

Jason Alderman directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney

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