Financial Planning for February, 2010

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Plan Ahead to Avoid the Stress of Caring for Children and Parents

Caring for elderly parents is nothing new, but with longer life expectancies that commitment grows exponentially. In addition, the delay of starting families until careers are well-established has only added to the pressure. Surviving and thriving in this brave new world can be tricky.

The Children

Children are without doubt a great blessing - and they are also a great challenge. At a minimum, parents are responsible for their support until they reach adulthood. Many of us also want to ensure that our offspring receive a solid post-secondary education - and that costs money.

In our current economic environment, saving for a child's education is not easy. While the consumer price index doesn't show it, the cost of providing your child's basic needs plus opportunities for extracurricular activities is skyrocketing. How do you provide for your child's needs while also taking care of your elderly parents?

Remember, your first duty is to yourself and your children. Take stock of your current financial situation and determine a workable savings plan. Contributing to 529 plans and Educational IRAs are good bets for providing for a child's education. When the time comes, however, donÂÂ’t rule out student loans and other tuition assistance plans.

When you begin to assume the duties of taking care of elderly parents, your childrenÂÂ’s lives will change as well. Involve them early on in the care plan - solicit their input on how best the family can help your parents/their grandparents. Involving your children in this activity will boost their self-esteem. Furthermore, when the time comes to take care of you, you have instilled values in your children that might keep you out of a nursing home.

The Parents

Caring for elderly parents presents unique challenges. If you think coordinating your children's activities is difficult, just wait until you have to get your parents to doctor's appointments. As they age, your parents' capacity to meet even their simplest needs diminishes and, eventually, you will be faced with either moving them to an assisted living facility or your home. The best time to begin the planning process is when your parents are still able to help you make the decisions.

It's difficult to initiate, but your first course of action is to sit down with your parents and discuss the following questions:

  • What and where are your parents' financial resources?
  • How can you best protect those assets from the claims of creditors?
  • Who are your parents' trusted advisors?
    • Attorney
    • CPA
    • Insurance agent
    • Financial/investment adviser
    • Close friends and confidants
  • Do mom and dad have duly executed wills and powers-of-attorney?
  • When the time comes, what do mom and dad want to do about living arrangements? Do they want to move to an assisted living facility? Would they prefer to stay in their home as long as possible? Do they want to move in with you?

These are just a few questions you will need answers to. It would also be beneficial to start the process of consolidating financial accounts to one or two institutions. Consider adding yourself or your siblings as signatories to your parentsÂÂ’ accounts.

Do your parents live in the same area as you? If not, you will be faced with the decision of moving them to be closer. If they can afford it, caregivers can help your parents stay at home as long as possible.


Amid all the pressures you face in taking care of your children and parents, don't forget about yourself. Given that most companies do not provide defined benefit pensions, begin now to put as much as you can in retirement plans. Funding your retirement before you fund educational plans or help pay your parents' expenses is crucial - otherwise, you could become a greater burden on your children when you retire.

Remember also that in order to properly care for your family, you need to be healthy. Take time to meet your own physical and emotional needs or you wonÂÂ’t be able to effectively help anyone else.

In our fast-paced world, it is a challenge to care for multiple generations. While never easy, the path can be smoother with proper planning and enlisting the aid of the right people. Are you the sandwiched between two generations? Give us a call and letÂÂ’s talk about planning opportunities now that can help minimize your stress later.

Happy Valentines Day!


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