by Dana George | Updated July 21, 2021 - First published on Aug. 28, 2019
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
If your aging parent is in dire financial straits, here are some ways you can help.
Over 25 million Americans over the age of 60 are considered "economically insecure," defined as earning $31,225 per year or less for a single person. Making matters worse, one in three would-be retirees cannot save $5,000 toward their retirement goal.
If your parent has become one of the 49 million retirees in the U.S., you're likely aware of how precarious their personal finances can be. Financial emergencies, such as unexpected tax bills and protracted illnesses, can derail the best-laid financial plans.
Or, like my retired mother, a parent can have her life savings stolen. As devastating as that theft was, my mother's situation is not at all unusual. Criminals steal an estimated $37 billion from elderly Americans each year. It doesn't matter how Mom (or Dad) came to be without money, though. If you're the adult child of a parent who cannot pay their bills, all that matters is coming up with a plan to make their lives a little easier.
It can be difficult for an aging adult to give up the financial reins. This person who has always taken care of you may be embarrassed, sad, or even angry at the thought of the roles being reversed.
A Care.com survey found that 54% of adult children would rather have the "sex talk" with their own kids than discuss money with their parents. If that's the case for you, it's natural. You can never be certain how a parent will react. The best thing you can do is to go in with a plan.
Here's where to start:
How you help will depend upon how much your parent is still able to do and how much they're willing to let you take over. For example, if your parent is dealing with memory loss, you may need to take over her budget. If she's still relatively sharp and wants to remain in control, your job may be that of a support player.
In either case, these three steps can help your parent get back on solid financial footing.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Take charge of any credit cards or other revolving debt. If your parent is in debt, speak with her creditors about a low (or zero) percent interest repayment program. In the event your parent's debt is a result of fraud, work with the creditor's fraud department. If you prefer not to deal with creditors directly, many debt counseling companies offer services free to seniors. If your parent has no way to repay her debts, speak with an attorney about bankruptcy. Look online for an attorney who offers free legal help to seniors.
If your parent has decided to let you take over her finances, you will need a power of attorney to speak on her behalf. If your parent prefers to do it herself, make it easier by providing the contact numbers she needs. For example, DailyCaring offers seven sources of free legal services.
In many cities, seniors have access to tax relief, home weatherization, senior transport, utility aid, prescription drug discounts, and food programs. If one of your parents was in a fraternal order like the Masons or Shriners, find out about any assistance they offer members and/or their spouses. If your parent is receiving veteran benefits, make sure she's getting everything she is eligible for.
My mother had been receiving Social Security and my father's Marine Corps survivor benefit for five years. A little digging showed that she was also eligible for a widow's pension for injuries Dad suffered in battle. Before you pay for anything, assume there's a program that will help cover the cost. All it takes is a little online investigating and a phone call or two to get started. AARP offers an easy to use support service directory that will help you get started.
Make a list of how much money is coming in each month through Social Security, pensions, military retirement, and other sources. Then make a list of how much is being spent. Work with your parent to trim the budget, cutting in a way that makes them feel as though they're not losing too much. For example:
For example, the average price of assisted living nationwide is $4,000 per month. If your parent still has a mortgage on her home, add utility and monthly maintenance costs to decide which option is least expensive. The average cost nationwide of adult day health care is $1,560 and a home health aide costs $4,195 per month. If your parent uses either of these services, add that cost to her rent or mortgage payment to learn whether assisted living would save her money.
The results will depend upon where your parent lives. Assisted living costs an average of $5,495 per month in Massachusetts, but only $2,844 in Missouri.
If your parent is not ready for senior living, HUD offers low-cost housing options.
These steps assume that your parent will allow you to help her get her financial house in order. It is possible that your parent will not let you near her finances or be open to your advice. If that's the case, there is little you can do but appreciate the fact that your parent's debt is not your own. Creditors cannot come after you to pay them (unless you are a co-signer). Even when your parent dies, creditors will only come after her estate if there's enough money left to repay her debt.
It's terrible to watch a parent stress over bills, but it can also be a powerful incentive to save for our own retirement. The ultimate goal is to be as independent as possible for as long as possible, and planning is the way to make it happen.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.