How to help ageing parents manage their money
One missed bill. A forgotten bank transfer. A scam call that sounds convincing. As parents age, the warning signs that they need help can be easy to dismiss. But failing to act can have devastating consequences.
If your elderly parents are managing their finances perfectly, there is no need to get involved.
But when they do need help, it can be a fine line between respecting their ability to manage their money, which they probably did so well, and diving in when you sense their distress.
My parents were pretty good at covering up their physical and mental decline. But several signs concerned me, including financial mishaps.
They were determined to be independent and it could be a battle to get them to accept any help.
But letting them hang in there, making their own financial decisions as their health crumbled resulted in substantial losses to their wealth.
They had separated after 43 years of marriage. Mum lived on her own and Dad had a new family. Dad developed Parkinson's and Mum, vascular dementia.
Dad was targeted by silver-tongued share brokers, phoning him with hot sharemarket tips that he 'couldn't lose money on'.
Mum didn't remember she had been to the bank with a family member and signed away a fifth of her savings.
The thing is that they prided themselves on being good with money and would have been horrified to know that they were scammed.
Most likely they would have asked, why didn't their daughter stop this.
One reason was a busy life, and I recommend checking if your employer has any special leave entitlements.
Under the National Employment Standards, all employees except casuals qualify for paid sick and carer's leave to care for or support a member of their immediate family if they are sick or have an unexpected emergency.
Warning signs often emerge gradually.
An ageing parent may start forgetting important financial decisions, miss bills or appointments, become vulnerable to scams, struggle with technology or withdraw from social activities.
Recognising these changes early can help protect their finances, health and independence.
10 signs your ageing parent may need help
- Forgetting important financial decisions
- Falling victim to scams or cold callers
- Missing bills or appointments
- Increasing confusion about money
- Difficulty managing technology
- Trouble preparing meals or maintaining the home
- Concerns about memory or cognitive decline
- Withdrawal from friends and community activities
How can you help your parents as they age?
Watch for changes in health
Ask about doctor or allied health visits. Do they need help making appointments and understanding any medications?
If the medical visits are complicated or distressing, can you go with them?
Make sure they're eating well
For an elderly person living alone, cooking for one may be too much of a chore.
I cooked for my mum and ordered pre-prepared food, but it was often left untouched. She needed someone to prepare food for her but also check she was eating.
Ideally, she needed to eat with others.
Check their home is safe
Do they need rails in the bathroom or on stairs?
Brighter light bulbs can help their vision and removing any rugs that are slipping hazards.
Motion-sensitive lights are helpful at night.
Review their finances
If your parents want you to manage their money, check how their super account-based pension is invested.
They may be comfortable with the default balanced option, but depending on their age a more conservative option might be appropriate.
If you have a parent who can't sleep for fear of running out of money, an annuity could be the answer, but you need to understand the product thoroughly.
Do they need help with their age pension or at tax time?
Is their cash earning the best interest rate?
Get legal documents in place
Before it is too late, sort out who can make financial decisions for your parents and draw up a power of attorney.
Who will make decisions about their health? Draw up enduring guardianship.
Do they have a will?
Look for memory warning signs
Memory can be unreliable as you age and often there is no need to worry.
But if there are big lapses, it can be a wake-up call that early dementia may be present.
Mum forgot the names of her beloved nieces and nephews whose lives she followed closely.
Increasingly, she couldn't remember where she parked her car and called in a panic.
Her best friend of 50 years worked it out in a flash and told me: "Your mum needs assisted living."
Review health insurance cover
Often the big medical bills are racked up in the last years of a person's life and health insurance can take the sting out of major medical costs.
Protect them from scans
I have heard of so many parents who have been swindled, in particular with romance scams.
My mum was constantly called by charities, and some sent her letters asking her to sign over her estate when she died.
If they are worrying about money, they could have been scammed.
What are their spending patterns?
Is there anything irregular that you notice?
They can be too ashamed and confused to admit it.
Plan ahead for aged care
Lengthening lifespans mean parents are living longer and they may not be able to cope on their own.
You may be unable to care for them as much as they want you to.
It can take time to find conveniently located care, so start looking around.
Help them stay connected
Hitting a glitch with a computer, passwords or mobile phones is frustrating.
But ironing out these problems is important to maintain their connection to friends and family.
Watch for signs of elder abuse
Family members will take advantage of the elderly, in some cases believing they are entitled to their money.
Around 17% of people in Australia aged 65 and over were experiencing some sort of abuse in 2021.
Adult children were most likely to commit financial, physical and psychological abuse, according to the National Elder Abuse Prevalence Study.
It found that sons were almost twice as likely as daughters to commit financial abuse.
Adult children were on par with intimate partners as perpetrators of neglect.
Encourage social connections
Encourage your parents to be connected with people.
Check out any local community groups for older people.
They can provide well-priced or free services such as transportation, social outings, movies and exercise classes.
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