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WalletPrep worksheet · Life events

How to talk to aging parents about money

Name ____________________ Date __________

Key ideas

  1. Talk while everyone is healthy. Planning is easier and cheaper before a fall, a diagnosis or a scam forces fast decisions under stress.
  2. A power of attorney comes first. A durable financial power of attorney names who can manage their money if they can't. Without one, families may need a court.
  3. Medicare does not cover long-term care. Help with daily living and long nursing home stays are paid from savings, insurance or Medicaid if they qualify.

Vocabulary

Power of attorney
A legal document that lets someone you choose, called an agent, make financial or health decisions for you.
Beneficiary
The person or group you name to receive an account, a trust or an insurance payout when you die.
Assets
Things you own that have money value, like cash, savings, retirement accounts, investments, a home or a car.
Brokerage account
An investment account where you can buy and sell stocks, bonds, ETFs and mutual funds. It has no special tax benefits.

Work it out

Rosa's mom gets $1,900 a month from Social Security and $600 from a pension. She spends $2,900 a month and has $30,000 saved.

  1. Social Security
  2. Pension
  3. Monthly income
  4. Monthly costs
  5. Monthly income
  6. Monthly gap
  7. Help at home, 10 hours a week
  8. Gap with help
  9. Months $30,000 lasts with help

Check yourself

  1. Your dad has $24,000 saved and spends $600 a month more than his income. How long does the savings last?

    • A. 24 months
    • B. 40 months
    • C. 60 months
    • D. 48 months

  2. Which document lets someone handle a parent's banking and bills if the parent can't?

    • A. A will
    • B. A beneficiary form
    • C. A durable financial power of attorney
    • D. A credit report

  3. Does Medicare pay for long-term care, like help with bathing and dressing at home?

    • A. No
    • B. Yes, always
    • C. Yes, after age 75
    • D. Only with a doctor's note

Your turn

Write three questions you want to ask your parents, starting with what they'd want if they ever needed help. Then put a date on the calendar to ask them, in person or on a call.

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Answer key

How to talk to aging parents about money

Work it out

  1. Social Security$1,900
  2. Pension$600
  3. Monthly income= $2,500
  4. Monthly costs$2,900
  5. Monthly income− $2,500
  6. Monthly gap= $400
  7. Help at home, 10 hours a week$1,300
  8. Gap with help= $1,700
  9. Months $30,000 lasts with help1 yr 5.600000000000001 mo
  1. Income is $1,900 + $600 = $2,500. Costs of $2,900 leave a $400 gap, so $30,000 ÷ $400 = 75 months, a little over 6 years.
  2. Assume help at home costs $30 an hour. 10 hours × $30 × 52 weeks ÷ 12 = $1,300 a month. Check real rates near your parent.
  3. With help, the gap is $400 + $1,300 = $1,700, and $30,000 ÷ $1,700 = about 17.6 months. That's the number to plan around.

Check yourself

  1. B. 40 months $24,000 ÷ $600 = 40 months, a little over 3 years. Any new cost, like help at home, shortens it.
  2. C. A durable financial power of attorney A durable financial power of attorney names an agent to manage money if the parent can't. A will only takes effect after death.
  3. A. No Medicare.gov says Medicare doesn't pay for long-term care. Savings, long-term care insurance or Medicaid, for people who qualify, cover it.