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Seniors In Recession: Practical Advice For Helping Your Parents Now (p. 3)
II. The second group of seniors, those who are able to live independently but who could benefit greatly from a lifestyle change, are perhaps the most challenging group from the perspective of “Boomer” children. Like their slightly younger peers, they are often shell-shocked by the direct impact of this economy upon their lives. They are already in those “Golden Years’ and many of them believe that they have missed the boat. Never would they have dreamed that their conservative mutual funds and their homes or condos would actually lose value. Never would they have guessed that, within a period of only five years, yields on their CD’s and other investments would return to post 9/11 levels. Never did they dream that once again they would be confronted with the very real need to “spend down” to be able to afford the lifestyle that they want.
These parents are likely to be the most negatively impacted by the current recession. They don’t have to do anything, so they rationalize maintaining the status quo even though they may be lonely, overburdened with the realities of home ownership, lacking any meaningful opportunity for exercise, or deficient in such basics as nourishment and social interaction. From their perspective, periods of hardship are just a fact of life. No need to lose sleep over issues that are beyond their control.
Even though many of these seniors will confess to us that their current home is like an anchor around their neck, what they are most likely to do is nothing. Oftentimes, their biggest concern is that they may outlive their money. The challenge for their adult children is that they know that their Mom or Dad may be squandering what could be the last enjoyable years of their lives. What, then, is the Boomer to do in the face of this situation?
As is often the recommendation, we believe that the adult child of this category of seniors must intercede. The following are a few suggestions:
Have a candid discussion with your parents about what they would like to accomplish with the remainder of their lives. Help them to understand that, within reason, they can still have fun, meet new friends, become more active, and truly have a rewarding life. The choice is theirs.
Start with what must be a frank reassessment of their assets, investments, and fixed obligations. You may well find that the real picture is not nearly as bleak as your parents may be imagining.
Consult with a financial advisor to establish new investment objectives that are realistic in today’s world. If tax consequences permit and they can afford it, offer to take their home today. Ultimately, it will be a part of the estate. Why not relieve them of the burden while they can still enjoy the benefits?
Map out a pragmatic program and be prepared to help them set well-defined goals. If these goals include relocation, giving up the car keys, selling a home, managing an imminent health challenge, or any major life change, your parents can really use your help. Delay is always their greatest enemy.
Don’t be timid about addressing the harsh realities. Whether they are the type of individual who will readily discuss life expectancy, estate planning, etc., the type who simply wants to avoid all such discussions, or something in between, they are having to deal with issues that are common to millions of their peers. Only the Boomer children can effectively impress upon them the many benefits of proactive planning and the benefits of change.
Most importantly, investigate alternatives and determine in your own mind what is the best course of action for your parents. Once you are clear in your own mind, you will be able to direct the process in a way that is best for your family.