Getting older comes with a lot of unique challenges. One such challenge is a decline in mental abilities. When you’ve had an aging parent who has experienced a decrease in cognitive skills, then you’ll know it can make it challenging to do the simplest tasks. For example, remembering to take medication or caring for a pet can be difficult as people age.
Finances are one of the hardest things to manage as people age, and even difficult for young and mentally capable people. In addition, poorly managed finances can have dire consequences, especially if the individual isn’t receiving income from a job. Financial caregivers can help older people handle their finances as they age and lose their mental acuity.
We’ll further discuss what a financial caregiver is, the different types, the benefits, and limitations of hiring one, and determining which suits you.
A financial caregiver is an individual or entity appointed to manage the financial affairs of someone unable to do so themselves. Financial caregivers can be family members, friends, or professionals, such as attorneys or financial advisors. Their goal is to ensure financial stability for those who need help managing their bills, investments, and other financial members.
In other words, a financial caregiver manages the assets, investments, property, and other finances of an individual who cannot do so.
There are a few options for financial caregivers; whichever you choose will depend on your needs and circumstances. Usually, the types of financial caregivers go into two categories– formal and informal.
Informal financial caregivers typically are trusted family and friends. Therefore, it’s an excellent option for those with responsible and trustworthy family members and friends willing to help with their finances. For example, they can help manage bills by setting up automatic payments, handling investments, and whatever else is needed.
There are three types of informal financial caregivers:
Formal financial caregivers are individuals or entities with expertise in managing finances. They can be attorneys, financial advisors, or even geriatric care managers. Professional caregivers can help manage finances, provide investment advice, and help with estate planning.
Some examples of formal financial caregivers include:
Financial caregivers can often be granted Power of Attorney, which legally allows another person to decide about your property or money.
Choosing the right financial caregiver is crucial to ensure your finances are well-managed and protected. Here are some factors to consider when choosing a financial caregiver:
Hiring a financial caregiver can provide many benefits, including peace of mind and the assurance that your finances are well-managed. Financial caregivers can also help manage bills, investments, and other financial matters, freeing up your time to focus on other things.
However, there are also limitations to hiring a financial caregiver. One of the most significant limitations is the cost. Professional financial caregivers can be expensive, and their fees can quickly increase. Additionally, some seniors may lose independence when someone else manages their finances.
Nobody wants to feel lost when dealing with their finances in their old age. However, if problems arise, you may be unable to handle them, which can lead to financial losses. Therefore, planning or appointing a financial caregiver is a great way to add financial security to your old age.