For many of us, the dream of retirement includes plenty of free time and enough money to splurge on all the things we passed up during our younger years when our paycheck went to the mortgage, savings and family expenses. In retirement most of us hope to have the house paid off, our debts covered, and enough disposable income to live it up at least a bit.
Unfortunately when free time and money is mixed with aging, costly mistakes can be made.
In this series by Executor.org, we look at issues and problems that could be happening in your parent's life that they are not telling you about - and offer solutions to help manage these situations. As parents age, communication matters more than ever, and your ability to keep your parents talking as they encounter new problems will be critical as your role in their lives evolves.
Our aging parents have unique vulnerabilities that can easily lead to spending that threatens even the healthiest of nest eggs. Free time can lead to boredom. Retiring from the workforce can spark loneliness. Physical and emotional aches and pains can create the need for a distraction, something that provides even the slightest bit of relief. For some of our parents that might be a hobby, spending time with family and friends or travel. But for others that can lead to problematic behaviors, including spending more than the budget allows.
Like it or not, spending money connects us to society in a relevant way. For older adults - who often feel marginalized by our youth-based culture - spending money and buying expensive items can make them feel part of the world.
If you notice your parent is acquiring a lot items, taking more vacations, buying big ticket non-essentials and in general overspending, it is wise to look deeper into the matter. Here's our recommendations:
1. Educate Yourself. Do your best to find out what is truly going on before raising your concerns. Parents do have the right to enjoy their savings when they retire and many will spend more freely than they did in the past. Taking a lavish dream trip, buying a condo in Florida and eating out at fancier restaurants doesn't necessarily mean they are going to bankrupt themselves. It might just mean they are living the dream of retirement. That said, it is important to consider whether health issues are playing a role in a parent's unusual spending. For example, when dementia attacks the brain's frontal lobe it can cause a person to lose inhibitions and behave more carelessly than they did in the past. Complicating matters further is that dementia in the early stages can be hard to recognize in some cases and the person often will appear to be the same on the surface. If you suspect dementia or another health issue, consult a doctor for more information about symptoms and things to look out for.
2. Be Understanding. If you find out your once frugal dad has spent $25,000 over the summer on new golf clubs, trips to numerous golf courses around the country and his own personal golf coach, you are probably baffled. Maybe a little worried. Possibly a bit angry. Those feelings are completely understandable. It's alarming to see someone you have known your whole life change and make what appear to be dumb decisions. But keep in mind the money your parent is spending is theirs and if they are of sound mind, you don't get a say in how it's spent. If your parent is experiencing a mental decline that is causing careless spending, you will want to encourage them to see a doctor for an evaluation. If they prove to be not healthy enough to manage their spending or finances, it's a good time to talk to a lawyer or financial expert about ways you can help ensure your parent does not deplete their savings or live beyond their fixed income. Regardless, it's important to not make your parent feel stupid, careless or irresponsible for their increased spending.
3. Suggest Alternatives. If the spending is a result of boredom, loneliness or feeling irrelevant in society, help your parent connect with better ways of coping than spending money. If possible, invite them to have a greater role in your life by doing something as simple as inviting them over for dinner once a week or suggesting a monthly trip to the movies. You can also see what, if any, activities there are in their community. Volunteer agencies rely greatly on retirees with time to spare and the work can be very rewarding. Many communities also have programs for seniors which include everything from exercise classes and book clubs to group trips and lunch outings. These type of activities can help reconnect your parent with people and make them realize they are still an important and valuable part of the world.
It's no secret aging can be tough. We often determine our value by the job we do and the type of children we raise. But when we get older we retire from our job and our parenting role greatly shrinks. It leaves a hole that most of us will strive to fill. By educating ourselves, being understanding, and helping our parents connect with others, we can help them find meaning and maintain financial security in their later years.
Check out the other articles in this Executor.org series:
What Your Aging Parents Aren't Telling You -- Memory Issues