Financial Care for Your Aging Parent (eBook)

Introduction xv
1 Preparing to Be a Caregiver 1
1. The Different Stages of the Elderly 3
2. Why Do We Fear Aging? 5
3. How Do You Know Your Loved One Needs Help? 6
4. Are You Ready to Be a Caregiver? 8
5. The Seven-Step Action Plan for Caregivers 9
6. Benefits and Tax Supports Available to Caregivers 12
7. Caregiving Will Change Your Life 13
vi Financial Care for Your Aging Parent
2 Taking Care of Yourself First:
Preparing for Your Own Retirement 15
1. Is It Time for You to Retire? 16
1.1 Tips for 50-year olds 16
1.2 Tips for 60-year olds 18
2. Five Retirement Lifestyle Budgets 19
2.1 Conservative 20
2.2 Comfortable 20
2.3 Above average 20
2.4 Luxury 20
2.5 Prestige 20
3 Asking Your Parents the Right Questions 27
1. The Five Myths of Aging 28
2. Opening the Conversation with Your Loved One 28
2.1 Advantages of having the money talk with
your parents 32
3. Discussing Important Documents with
Your Loved One 35
3.1 Power of attorney for personal care 35
3.2 Power of attorney for property 36
3.3 Will 44
3.4 Living will 44
3.5 Advance directive 45
4. The Five Wishes 46
5. Organize 46
4 A Financial Plan for Your Parents 49
1. Step 1: Establish Goals 50
2. Step 2: Gather Information 50
2.1 Net worth statement 51
2.2 Cash flow statement 51
2.3 Budgeting 51
2.4 Look at your parents’ investments 58
Contents vii
3. Step 3: Review Possible Strategies 58
4. Step 4: Create the Action Plan 59
5. Step 5: Monitor, Review, and Update the
Action Plan Regularly 59
5 Maximizing Every Dollar 65
1. Budget Tips for Seniors 66
1.1 Seniors’ discounts 67
1.2 Coverage and programs for seniors 67
1.3 Government pensions 68
1.4 Canadian tax credits for seniors 69
2. Joint Property and Accounts 72
6 Debt and the Elderly 75
1. Reverse Mortgages 77
2. Real Estate Ownership 79
3. Leveraged Investments 80
4. Taking Action 82
5. Protecting Your Parents from Fraud and
Financial Abuse 83
7 Investing Your Parents’ Savings 87
1. Control 88
1.1 What is in your control? 88
2. Risk 91
3. The Rule of 100 93
4. Products Suitable for Retirees 95
4.1 Guaranteed Investment Certificates (GIC) 95
4.2 Bonds 96
4.3 Life annuities 96
4.4 Mutual funds 96
4.5 Segregated funds 96
4.6 Variable annuities 97
4.7 Dividends 97
4.8 Exchange traded fund (ETF) 98
viii Financial Care for Your Aging Parent
5. Sample Portfolios 98
5.1 Pre-retiree’s portfolio 98
5.2 Early retiree’s portfolio 99
5.3 Late retiree’s portfolio 100
8 Insurance for Seniors 103
1. Reasons to Purchase Life Insurance 104
1.1 Expenses 104
1.2 Cash flow and estate preservation 104
1.3 Pension maximization 104
1.4 Estate planning 106
1.5 Charitable bequest 106
1.6 The family cottage and balancing
bequeathed assets 107
2. Types of Insurance 108
2.1 Term life insurance 108
2.2 Permanent insurance 109
2.3 Long-term care insurance 109
2.4 Critical illness insurance 110
9 Helping Aging Parents Transition to a Life of
Increased Dependence 113
1. When Is It Time to Get Help? 113
1.1 Signs your parents need help 114
1.2 I’m not ready yet 116
2. Preparing for the Move 117
2.1 Choose wisely to reduce stress 118
2.2 Reduce furniture 118
2.3 Think about storage 118
2.4 Consider safety and convenience 119
2.5 Prepare to say goodbye to many things 119
2.6 Show respect for your parent’s opinions
and feelings 119
2.7 Have valuables appraised 120
Contents ix
3. Moving to a Smaller Home 120
3.1 Granny suites 120
4. United States Subsidized Housing for Seniors 121
5. Canadian Rent Geared to Income 121
6. Home Care 122
7. Retirement Residences 123
8. Long-Term Care Facilities 125
9. Palliative Care 126
10. Do Your Homework 128
10 Selling the Family Home 135
1. Step 1: Prepare 135
2. Step 2: Select a Realtor 136
11 Succeed with Good Advice 141
1. Accountant 142
2. Lawyer 142
3. Financial Planner 142
3.1 The benefits of working with a financial planner 143
4. Choosing Your Team of Advisors 147
5. Regular Checkups 148
Conclusion 153
Download Kit 157
Samples
1. Conservative Lifestyle Budget 21
2. Comfortable Lifestyle Budget 22
3. Above-Average Lifestyle Budget 23
4. Luxury Lifestyle Budget 24
5. Prestige Lifestyle Budget 25
6. The Care Years Continuum 29
7. Net Worth Statement 55
8. Cash Flow Statement 56
x Financial Care for Your Aging Parent
9. Tax Impact 72
10. Investment Products 94
11. Comparison of an After-Tax Income of a Back-to Back 105
Annuity and Life Insurance Policy
Worksheets
1. Determine Your Readiness to be a Caregiver 10
2. Retirement Readiness 19
3. Questions to Ask Your Parents 33
4. Five Wishes 47
5. Financial Planning Preparation 52
6. Reviewing Documents: Consider, Investigate, and Act 60
7. Out-of-Pocket Expense Tracker 64
8. Gathering Debt Information 83
9. Building Your Parents’ Self-Awareness That They
Need Help 117
10. Living at Home versus Retirement Residence 127
11. Comparing Retirement Homes 129
12. Questions to Ask a Realtor 139
13. What Type of Advisor Does Your Parent Need? 146
14. Questions to Ask Your Advisors 150
15. Annual Meeting Questions for the Advisor 151