As your parents age, your roles are often reversed. Your parents once cared for you financially, but it may now be up to you to financially care for your elderly parents. When your parents can't work and they look to you for guidance, it's important that you fulfill their trust and make wise financial decisions to help keep them cared for and comfortable as they age. It may be a burden, but with careful financial planning it needn't be one that you bear alone.
Step 1
Sit down and talk to your parents about their wishes. It's important that you start planning before your parents lose their abilities to manage money. Talk about their assets and which can be sold off in case of a need for continuing care. Ask that they give you authorization to access their accounts in case of an emergency when you'd need money and legal documents quickly, suggests online magazine Senior Citizen Journal.
Step 2
Secure a durable power of attorney that puts you in charge if your parents become unable to make financial decisions on their own. A DPOA allows you to act on their behalf when it comes to financial and legal issues, notes Metro Weekly. If you ever need to move funds or sell assets, for example, a DPOA gives you the authority to make decisions for your parents. You can obtain one by visiting a lawyer and having your parents sign the papers.
Step 3
Talk to your siblings and other family members about your parents' care. If you parents will need financial assistance, see if family members are willing to contribute a percentage of their salaries to help pay for items such as medicine, in-home care and living expenses. Taking on the responsibility of your parents' financial care on your own may be too heavy for your current living situation, so seek out other ways to pay for the things that they need.
Step 4
Claim your parents as a dependent on your tax return. You can claim them as dependents if you pay more than half of their living expenses, including rent, medicine, food and clothing, taking into account Social Security benefits, notes Bankrate.com. For instance, if your father receives $10,000 per year from Social Security, yet his living expenses add up to $25,000 and you pay the balance, he becomes a dependent and you'll receive a tax break.
Step 5
Enroll your parents in government assistance as soon as they become eligible. Social Security, Medicare, the Supplemental Nutrition Assistance Program and prescription drug plans are all available to help elderly citizens pay for living costs. The National Coalition on Aging offers a benefits checkup to ensure that your parents are enrolled in any program that they qualify for to remove some of the burden from your shoulders.
