The primary goal of retirement planning is to make certain that your money lasts as long as you do. Some have often said, in a humorous manner of course, that perfect financial planning is when you’re out of breath and out of money on the same day.
In reality, as life expectancies have lengthened and interest rates
remain at historic lows, it’s a real challenge to make certain that your
income continues into old age and that the nest egg is not depleted.
As a financial adviser, I’ve been blessed with great clients, many of
whom I know far more about than just their finances. They share stories
about their spouses, their children, their friends, their grandchildren,
and occasionally, even their great grandchildren.
When you work with people year in and year out, you really do get to
know how they think and what they’re concerned about. That’s not just
regarding financial goals, but also their personal goals and objectives.
In real life, it’s rare that everything goes as planned. Sometimes
people become ill and sometimes their lives end way too soon. As an
adviser, it’s my duty to help people and their families prepare for such
That brings to mind a circumstance that is seldom addressed in the
financial planning world. In fact, it’s not often discussed among family
I’m referring to the mental deterioration of an aging parent. Often
times, aging parents have made good financial decisions over their
lifetimes and have significant nest eggs. But now, unfortunately, they
are vulnerable to financial predators.
There have been more than a few occasions where I’ve noticed a client
not quite as mentally sharp and took it upon myself to contact the
client’s adult child to voice my concern. I have also suggested to
clients that perhaps they should have their son or daughter accompany
them the next time we meet.
I’ve observed over the years that aging people are more vulnerable to
making poor financial decisions. Quite often, it’s because they tend to
be very big-hearted. I can still recall my wife’s aging grandmother, who
had very few assets, yet was sending money to a television preacher who
ultimately had a major personal scandal.
On occasion, a family member will hit grandma or grandpa up for a loan
that will likely never be repaid. Or a son or daughter with good
intentions will step in to “help” and undo the entire portfolio because
they knew somebody who once read an online article and now considers
themselves an expert at providing investment advice.
Those are the good guys. The bad guys are even more insidious and there
are plenty of them out there. Real con artists who zero in on the aging
because they know there’s a good chance they can get into their
What can be done to prevent this happening? I don’t think more laws
would help reduce potential issues. But I do believe that it is
important for adult children to have a familiarity with their parents’
A good financial adviser should be an entrusted lifelong member of the
family team. A lifelong financial adviser that communicates with
extended family members can certainly help minimize some financial
problems that tend to find aging people with assets.