Many of my clients in their late 50’s and early 60’s are become more involved in their parent’s financial matters. This is important, and it would be better if they became involved even earlier… before there is a problem.
In one case, as dad became ill his daughter started helping mom with the bills and finances. They realize dad had neglected to make his last premium payments for over a year on a life insurance policy he had for over 20 years. By the time they discovered the problem, it was too late. The policy had lapsed. Dad passed away a year later. It was a costly mistake… over $100,000 in missed benefits.
In once study done, they asked a simple question to those in their 50’s. If a lottery pot was at $2 million, and 5 people had winning tickets, how much would each person get? (The correct answer is $400,000.) Between 50-60% of those in their 50’s answered correctly. When that same question is asked to a group of 90 year olds, only 10% get the correct answer. Cognitive abilities diminish with age and it becomes more difficult for someone to gauge the right trade-offs when it comes to financial decisions.
It is important to become involved in a caring and loving way. To do so, you need to have knowledge of financial matters yourself, and it’s important to have your own financial matters in order so you offer thoughtful assistance.
Dana Anspach
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