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Caring For Aging Parents

Posted January 29, 2021

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Have you become part of the “sandwich generation” taking care of multiple generations? Maybe you anticipate needing to take care of your parents soon. You probably know you’re not alone. According to Fidelity, 12% of parents who have a child at home also take care of an adult without financial compensation. As a result, these care arrangements can place emotional and financial stress on pre-retirees and retirees when it means responsibility for parents, children, and even grandchildren fall to their generation.

While caring for children is an expected responsibility, not everyone is prepared to care for their parents if they need help due to an injury, disability, or simply advanced age. In our blog post on Weighing Long-Term Care Strategies in a Comprehensive Financial Plan, we addressed care types in retirement–both for functional well-being and for assisting in daily responsibilities like finances.

How to care for your parents

Difficult times may bring up worries about both health and money. Still, the surrounding challenges can be an opportunity to bring up an otherwise uncomfortable topic of what financial plans your parents have made for future needs. If possible, learn where to find their financial account information, locate their critical legal documents, and understand long-term care plans years ahead of them needing help. The ability to manage complex tasks like finances declines gradually after age 60, so seniors often do not recognize that they may already require some support. Knowing these essential answers in advance will allow parents to have more control through the decisions and strategies they have prepared.

Aging Parents and Finances

Checking in regularly and monitoring accounts (even by receiving “read-only” statements) can make you aware of any problems early. Overdue bills, overpaid accounts, unopened mail, and unusual card transactions are indicators you may need to step in. As you take on financial responsibility, plan to review the recent six months of bank and credit card statements to identify the bills that should be paid and services that can be canceled. Latest tax returns, 1099 forms, insurance policies, and even employer or veterans benefits can reveal additional income sources that you can utilize. If possible, sit in on meetings with accountants, bankers, lawyers, and financial advisers to better their situation’s in’s and out’s.

Once the financial picture comes together, you can streamline accounts and payments by consolidating bank accounts, authorizing automatic deposits, and setting up recurring electronic payments. After simplifying routine tasks, you might find your responsibility is time-consuming, especially if you give other functional care for your parents’ health and well-being. The National Alliance for Caregiving reports that adult caregivers spend an average of about 3 hours a day in their helping role.

Many Americans choose to take time away from work to help with these needs. Over the years, decisions to reduce hours or go part-time with the loss of benefits like 401(k)s can quickly add up. The absence of hundreds of thousands of dollars into retirement makes a difference to not only the caregiver’s well-being but their ability to help children, parents, and friends long-term. According to Fidelity, women who take on caregiver roles often find themselves with reduced financial resources from an average of 12 fewer years in the workforce. By making a smart financial decision at the outset, however, pre-retirees and retirees can minimize the financial repercussions of taking time to help loved ones.

Benefits that make significant financial impacts in the long term include retirement savings like 401(k)s, pensions, profit-sharing plans, health insurance, and health savings accounts (HSAs). Employer contributions and additional contributions you can make over age 50 offer a boost to grow your retirement income. In some cases, employers provide resources to help caregivers specifically.

Caring for Aging Parent

Full-time married caregivers can benefit from spousal IRA contributions to continue funding their retirement plans. Conversely, you can set up a simplified employee pension plan (SEP) or an IRA if your family pays you as an independent contractor for care.

To prevent financial affairs from falling on one person or potentially causing disagreements between siblings, trust officers can take care of the administrative duties in a managed account. Trust officers assisted by a financial advisor can also take on routine tasks like paying bills, reviewing statements, and ensuring assets are properly invested. Getting a hand can relieve you of stress and allow you to focus on what’s truly important. Regardless of the financial path you take as a caregiver, remember to take care of yourself.

Thayer Financial can advise you on managing your parents’ finances and optimizing your retirement plan in the process. As financial advisors in Hickory, North Carolina, Thayer is your dedicated resource for fee-only, fiduciary advice. Schedule an appointment or call us today.


Thayer Financial, L.L.C. (“Thayer Financial”) is a registered investment adviser offering advisory services in the State of North Carolina and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This website’s presence on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Thayer Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or according to an applicable state exemption.

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Thayer Financial, L.L.C., unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.


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