Do your aging parents need your help?

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 life-changing events.

That brings to mind a circumstance that is seldom addressed in the financial planning world. In fact, it’s not often discussed among family members either.

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 pocketbooks.

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’ financial adviser.

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.