Planning for Aging Parents: A Financial Planner’s First-hand Perspective  

My father taught me about money long before I became his caregiver. Now I help clients and advisors tackle this challenge.

By Desiree Fisher
Desiree Fisher
Desiree Fisher

As the only child of an older parent, I always knew the responsibility of caring for my father would fall to me. My mother passed away when I was 15, and it was just the two of us for most of my life. From a financial standpoint, my father made sure that he had funds available to cover his needs as he aged. He often said, “Take care of your money when you’re young, and it will take care of you when you’re old.”

All my life, my father, Coell, taught me lessons about money. He was always open and honest about his finances, providing me with detailed information regarding his accounts and investments. He wanted to ensure that I had a clear understanding of everything and was always quick to tell me that whatever he had was mine, as his only child.

As my father approached his mid-70s, it became evident that we needed to prioritize his estate planning. Although he was in good health and still actively working, I recognized the importance of having all the necessary documents in place, just in case of any unforeseen events.

Tragically, just two years later, my father suffered a massive stroke that left him incapacitated. Thankfully, due to the estate plan we had prepared, which included his healthcare proxy, I could focus on supporting his recovery and serving as his advocate throughout this challenging journey.

New roles

Desiree Fisher
Desiree Fisher with her father at her college graduation

When I became my father’s caregiver, I took on the responsibility of navigating the complex medical system to ensure he received the best possible care and the chance for a meaningful life. During this time, my incredible aunt stepped in to provide care, and together we devoted ourselves to his well-being. Sadly, this 10-year caregiving journey ended in June of this year when my father passed away shortly before his 88th birthday.

This personal journey also inspired me to make some mid-career changes.

I transitioned from a career in affordable housing finance and became a financial planner partly due to my father’s influence and my previous experience in financial literacy. Attending the CFP Board’s Diversity Summit motivated me to pursue and achieve CFP certification. My work as a financial planner fulfills my passion for empowering people with the information that they need to live their best life on their terms.

I also started my firm, Coell’s Legacy, to provide advice and guidance to clients who wish to develop personalized estate and eldercare plans for themselves and their parents. We work with a network of estate planning attorneys and eldercare specialists. I launched Coell’s Legacy on my father’s birthday, June 16, 2020, and he was thrilled to hear about the company’s founding. I’m grateful that my memories of him guide me as I assist clients in creating comprehensive estate and eldercare plans through support, resources, and guidance.

The Rising Cost of Caregiving

Caregiving for aging parents is becoming increasingly common. A 2021 AARP study revealed that around 48 million individuals — eight out of 10 caregivers — provide unpaid care to adult family members or friends. The majority of caregivers (80%) incur out-of-pocket expenses, averaging $7,242 annually. Those caring for individuals with mental health issues or dementia face even higher annual out-of-pocket costs: $8,384 and $8,978, respectively.

Not surprisingly, Gen Xers reported the highest out-of-pocket costs compared with other generations, $8,502. These expenses include rent, mortgage payments, medical costs, and home modifications to ensure safety and accessibility.

Within the African American community, approximately 7.2 million individuals (nearly one in four adults) undertake the responsibility of caregiving, according to the AARP study. These caregivers are essential: The assist with daily living activities, manage medications and offer emotional encouragement to those they care for. The financial burden is substantial: 20% of the African American or Black caregivers surveyed said they experience a high level of financial strain and 51% said they spent more of their financial resources due to the pandemic.

In addition to the financial pressures, caregiving can take a toll on a caregiver’s work life, often leading to lost wages and financial strain. The responsibility of caregiving usually falls on one individual, and women make up 75% of all caregivers. Many find themselves thrust into this role unexpectedly and lack the planning or preparation to navigate the complexities of caregiving.

The Role of Financial Planners

Financial planners play a crucial role in assisting clients with the financial needs of caring for aging parents. Incorporating these discussions in client meetings allows planners the opportunity to understand the extent of their client’s responsibilities and anticipate the potential financial impact.

During client meetings, planners must inquire whether the client anticipates covering their parents’ expenses or if they are providing financial support. By gathering this information, planners can include these costs in their client’s financial plan. Regular review meetings are also vital to ensure that the client’s financial strategies remain aligned with the changing caregiving dynamics and any new challenges.

To demonstrate their expertise in caregiving/eldercare planning, financial planners can create a library of resources to share with their clients. Various organizations like AARP and the National Alliance for Caregiving have websites with information on topics that cover the spectrum of caregiving, including legal and financial considerations, caregiver burnout, and recognizing cognitive impairment.

By providing these resources, planners can embolden their clients with valuable knowledge and enable them to make well-informed decisions. Another helpful tool that financial planners can direct their clients to is Fidelity’s “The Cost of Becoming a Caregiver” website. This platform includes a calculator that helps estimate the economic costs of leaving the workplace.

Financial planners should also establish connections with elder law attorneys. These specialized attorneys possess expertise in addressing the legal needs of older adults, guiding families through obtaining government resources, creating trusts to protect assets, and assisting with Medicaid applications. By collaborating with elder law attorneys, planners gain invaluable insights that greatly benefit their clients’ financial planning journey.

Additionally, financial planners can be facilitators. Providing conversation starters can encourage clients to broach the subject of eldercare needs with their parents and other family members. These discussions can be emotionally challenging, especially when navigating complex family dynamics. Planners can provide a safe and objective space for open dialogue, ensuring that all family members’ concerns and preferences are heard and respected. By leading these conversations, planners demonstrate their commitment to supporting and fostering stronger family connections during the caregiving journey.

Conclusion

As financial planning continues to evolve, planners must adapt their roles beyond the traditional focus on assets under management and incorporate personalized guidance to clients facing the challenges of eldercare. Financial planners become indispensable partners in their clients’ lives by integrating discussions about caregiving into their financial plans and offering valuable resources and connections.

Desiree Fisher, CFP, is the owner and founder of Coell’s Legacy, a concierge firm created to assist families before something unexpected happens. We are here to remove the anxiety and confusion from the estate and eldercare planning process. Contact me at our website, www.coellslegacy.com, or on LinkedIn (linkedin.com/in/desireefishernyc).  

 

 

 

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