Specifically, they may need you to get involved in some of their financial issues. If you do, you may need to focus on two areas: leaving a legacy and managing finances during retirement.
While initiating these conversations may not be easy for you, it is important, and you may find your parents more willing to discuss these issues than you had thought. You should encourage your parents to work with an estate-planning professional to develop the necessary legal documents, which may include wills, trusts and financial durable powers of attorney. While your parents need to deal with the legacy issue, they still may have plenty of years of living ahead of them, and they might need help managing their money during these years.
For starters, you may want to have a discussion about their savings, investments, insurance and so on; as well as where these assets are held. This knowledge could be valuable if you ever become involved in managing or distributing your parents’ resources.
Also, you might want to talk to your parents about the income sources they may be drawing from during their retirement. For example, how much are they taking out each year from their 401(k)s and IRAs? They don’t want to withdrawl so much that they deplete their accounts too soon, but at the same time, they would no doubt like to maintain their standard of living during their retirement.
You may want to suggest to your parents that they evaluate their investment portfolio for both growth and income potential, because they will need both elements during a long retirement.
If your parents aren’t already working with a financial advisor, you may want to encourage them to do so. Managing an investment portfolio during retirement is no easier than doing so during one’s working years — and there’s less time to overcome mistakes. A qualified financial advisor can help your parents choose the right mix of investments that can help meet their needs.
During the course of your lifetime, your parents have done a lot for you. You can help them by doing whatever you can to assist them in managing their financial strategy.Information provided by Matt Kneifl, financial advisor, Edward Jones, 1100 73rd, Windsor Heights, 279-2219.