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How to Help Your Parents Avoid A Financial Mess In Old Age

The fact that we’re all living longer is extremely good news. But when it comes to planning our parents’ finances, it can be difficult. The fact that parents are living longer presents many personal challenges to the younger generation. Most experts accept that when it comes to looking after aging parents, it’s important to put yourself first.

According to the data, the number of caregivers has expanded dramatically in recent years. Metlife found that in 2011, there were more than 10 million children older than 50 looking after aged parents. That means that today, some 17 percent of men and 28 percent of women provide some kind of elderly care. That’s up from a mere 9 percent of women and 3 percent of men back in 1994.

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These shifting demographics mean that it’s more important than ever to help yourself and your parents avoid a financial mess in old age.

Here’s some advice.

Don’t Quit Your Job On A Whim

Before leaving your current job to look after an elderly relative, think strategically. First, ask yourself how likely it is that you’ll be able to find work once you return to the workforce. If you’re in a low-skill job, like cleaning, it might be difficult for you to get another job. If, however, you can work from home, making the switch could be a lot easier. Second, think about whether quitting work altogether is worth it. Quitting work might sound like a good idea to free up time. But could you be better off hiring domiciliary carers using the wages that you currently earn? Third, ask yourself whether your industry might change in the near future. Will you need to update your skills to remain employable? Or will you be able to use your past resume to land a job?

Get A Burial Insurance Plan

The cost of burial in the US is currently running at around $7,700. For many people, that’s a lot of money. And for some, it’s utterly unaffordable. The good news is that you don’t always have to pay funeral expenses out of pocket. According to burialinsurancpelans.com life insurance firms sell burial insurance for seniors. Check your policy to see whether it covers funeral expenses, so that you can avoid and nasty costs when your loved one passes on.

Build A Caregiving Budget

Whenever you make a major financial decision, it’s a good idea to make a budget. A budget will quickly tell you if your plan makes sense or not. Can you afford to live off your limited income? Or do you need to work at the same time as you care to make ends meet? Also, investigate what assets your parent has that they could put towards the cost of care.

Explore Free Advice Online

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These days there are plenty of official advice available online for those in elder care. The government currently runs its Eldercare Locator. This is a service that connects you to people and resources you might find useful. For instance, you can get advice on Alzheimer's disease, legal assistance, and home modifications. You can also use the National Association of Area Agencies on Aging to get local information on help available in your area.

Prepare Your Parents For Financial Scams

Scammers are increasingly targeting the elderly in order to try to steal from them. Scammers will often ring up pretending to be a bank or the police and ask for personal account details. Children need to train their parents to recognize this type of scamming activity so that they can protect themselves if they happen to be alone. Be warned, if your parent falls for one particular scam, they will more than likely be targeted in another. That’s because scammers keep a so-called “suckers list.” This is a list that scammers share among themselves of the people most likely to reveal sensitive information.

Use Tools To Calculate The Cost Of Domiciliary Care

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The vast majority of people facing old age want to spend their remaining time in their homes with their families. Living in a nursing can be difficult and expensive. So it’s important that you find out how much living at home is likely to cost. Some insurance companies have built tools and create workbooks that help calculate this cost. Perhaps the most detailed is the Genworth Cost of Care study, completed back in 2011.

Talk About Legal Matters, Including Your Will

Finally, don’t forget to talk to your parents about legal matters. Usnews.com suggests making sure a will is drawn up to prevent ambiguity when your parents ultimately pass on.

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