Is it worth buying long-term care insurance? | Smart Change: Personal Finance

My parents were in their 40s when I was born. When I was in high school, my mom and dad were already considered seniors. But both of my parents were intelligent, caring and practical people with a razor-sharp spirit, especially my father, who had a particularly keen sense of humor. Watching my parents grow old while I was still so young was a surreal experience. As time went by, and they were entering their 70s, I could see that they were taking longer to ponder simple decisions. Almost anything new that seemed overly complicated became a little annoying to them.

Most of us will see our parents slow down with age. Then, one day, things suddenly change and it becomes our turn to keep an eye on them. This goes beyond the obvious physical things like making sure their sidewalks are shoveled during the winter. Regardless of whether they have shown signs of severe cognitive decline – or just the occasional hiccups in memory – protecting loved ones from the physical harm is not our only job. It is also up to us to watch out for predators that could threaten their financial well-being and safety.

Protecting your aging parents means staying on top of activity across all accounts and knowing who has access to them. A fiduciary financial advisor will also keep their information safe and help protect their money.

Finding a financial advisor you can trust who has the experience you need and who is committed to working in your best interest can be overwhelming. That’s why you should consider Wealthamp’s free financial adviser matching service. Each consultant in the Wealthramp network is strictly controlled. Answer a few quick questions, review your advisors’ matches, and schedule a free meeting with one or all of your matched advisors. Wealthramp will never sell your data. You won’t get pushy sales calls from them.

Elderly: the most common victims of scams

The National Council on Aging notes that at least 5 million cases of financial elder abuse are reported in the United States each year. It is probably much worse. Researchers estimate law enforcement is only aware of one in 25 cases.

The True Link Financial Elder Abuse Report sets the amount of losses suffered by seniors due to financial abuse at $ 36.5 billion, but the real amount is likely much higher than that, CNBC reported this year. . Older people control about 75% of wealth in the United States and the reality is that older people can’t afford to lose money because they don’t have time to recoup their losses from scams.

Financial abuse can hide in plain sight

Victims tend to be more affluent, but in truth any middle-income senior citizen can be a victim. So what does financial abuse look like? These are just a few smoking guns:

  • someone who changes their will or other legal documents
  • money or goods used without their knowledge or authorization
  • counterfeit signatures
  • someone who borrows money without paying it back
  • fraudulently obtain power of attorney or protection
  • fraudulent insurance or investment schemes
  • lotteries and lottery scams that require you to pay money to claim your winnings
  • identity theft
  • fake health or pharmaceutical products
  • unnecessary or predatory lending practices

But it can also be much more subtle. A broker, insurance agent, or other financial advisor might launch complicated investments that are supposed to provide security and be low-risk, but are actually meant to earn the advisor huge upfront fees and ongoing fees.

Outsmart predators

Adult children may not always be available to their parents. They may have no reason to notice, but there are some things you can do to be careful of them even from a distance. One of the most useful steps to take is to pay attention to who is watching their finances and who is aware of how much money they have.

For example, the friendly neighborhood banker can convince them to cash their FDIC-insured certificates of deposit and buy variable annuities with restrictions and high costs instead. They might tell your parents that understanding what’s in the fine print isn’t necessary when you have someone from the bank right there to point out all the benefits. Your mother or father may believe that the banker is just looking for their best interest when in reality he is a salesman looking for commissions.

You probably can’t be there to track every transaction or investment your parents make, and you don’t have to. Also, you don’t need to be a financial investigator or expert. Find your parents a real financial advisor who practices as a fiduciary and will sign a fiduciary oath.

The fiduciary role will go a long way in helping to eliminate difficult salespeople. It is important to understand the difference between the eligibility standard and the trust standard. The former means that an investment is suitable for your parents, but just because an investment is suitable does not mean that it is profitable. Advisors who follow the much higher fiduciary standard, however, are really looking for your parents and aren’t just trying to line their pockets by selling investment products that pay them high commissions.

Check out that advisor by reviewing his background and general approach to retirement planning and investing, which should be completely transparent, with all advisor fees fully disclosed in writing. So, keep an eye on everything they are doing. Financial advisors in the United States should be licensed or registered, and you can verify them via the SEC’s investment advisors public disclosure database and FINRA’s BrokerCheck site. Enter their name or their company name. Consultants should also be willing to provide you with their central registration filing number to make searches even easier.

Simple steps to avoid problems

Here are some ways to help your parents make smart financial decisions:

  • Make choices based on the best value for money: The lowest cost isn’t necessarily the best deal. Compare what you are getting before choosing a consultant.
  • Take a long-term view: Financial planning is a long-term and far-reaching undertaking. No financial advisor promises you will get rich quick.
  • Be honest about your needs: Analyzing and talking about what you actually want and expect as you get older is a crucial part of financial planning. If leaving a large legacy is important, a paid trust advisor can help make that dream come true. Or if you want to enjoy your retirement money, being honest about that goal will shape your plan.
  • Listen to the experts: If you’re paying for expert advice, use it. While you may not agree 100% with your advisor’s advice, if you don’t use most of the advice, you should probably partner with another person.

The talk of money

Your parents watched over you when you were growing up, and it can be a bit of an awakening when you realize it’s your turn to be careful of them. But just being aware is the most critical first step, so it might be time to talk. However, they are likely to want to discuss their real estate plans, and this is a great time to ask questions about how their bank accounts are organized and how they feel about their investments. Another way to introduce the topic is to ask if they are happy with their financial advisor. Whenever there is an opportunity to talk about their overall health and well-being it can also be a good time to gently raise their finances. It is especially important that your mother opens up about her financial concerns because she, like many women, may have relied on your father to make the big investment decisions. Women control more than $ 10 trillion (about 33%) of the total financial assets of US households, and that amount is expected to rise to $ 30 trillion over the next five years. According to TIAA-CREF, Baby Boomer women rely heavily on outside consultants or family and friends for financial guidance.

Realize that your parents may have already been victims without telling you because they may feel embarrassed. Many older people do not want to report such incidents, either to their adult children or to the authorities. Take the initiative and monitor your parents as they may feel uncomfortable taking the initiative.

Good steps to take

I started the conversation about money when I learned that my parents wanted to talk to me about their health. Every family is different, but these are the steps anyone should consider to make your parents’ financial life easier as they get older.

  • Find all accounts including bank and brokerage accounts, insurance information and safety deposit boxes and ask for “view only” privileges so you can track activity.
  • Determine who should pay your monthly bills so they are paid on time, automate the process, and ask the bank if they offer email “alerts” that notify you when balances fall below a certain minimum.
  • Talk to an attorney and respectfully discuss creating a power of attorney or living trust.
  • Consider engaging a paid, controlled fiduciary financial planner to analyze all of their investments, manage their cash flow needs, and create a plan to maximize their savings.

My parents passed away about ten years ago, and when they were growing up, I was nervous about bringing up their finances. When I found the right moment, it came from a place of love and respect, and I think they knew it. I also think my dad was very relieved because I don’t think he would ever come to me for help for himself. But he had deep concerns about my mother, and that was my opening. Looking back, I now realize that the details of their financial life were a burden to them and I am grateful that I had the courage to speak openly with them.


Pam Krueger is a recognized investor advocate, award-winning personal finance journalist, as well as founder and CEO of Wealthramp, a free advisor matching platform that connects people with strictly vetted financial advisors. She is also the creator and co-host of MoneyTrack, which aired on PBS from 2005 to 2019, and the Friends Talk Money podcast, currently in its seventh season.

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