India currently has a huge population of 1.25 billion. Of this more than 30% people are in the 50+ age bracket. Going forward, people in India are expected to live longer due to improving living standards and access to modern medical care.What does this mean for all of us? We all have elderly people in our family. Our parents or that special someone, who we need to take care of in their old age. Do you care for an elderly parent or special someone? This post outlines some of the issues you may need to consider for preparing a better financial planning for parents.
As we live longer, most of us become a part of the sandwich generation, finding ourselves caring for elderly parent whilst also looking after our own children. This can put enormous pressure on a person who is caught in the middle, with competing demands on their time and resources.
Below are some very useful tips that will help you reduce the burden if you are a carer in this situation.
1. Organize their important documents
A good place to start is to help your parents assemble a folder with their important documents. This should include items such as their:
b. Power of attorney documents
c. Bank details, Passbook etc
d. All investment or insurance related documents
e. Photocopies of all the above documents
Having everything in one place will make it far easier to deal with organizations in the future and will save much of your time and energy.
2. Arrange to meet with their financial adviser
If your parents work with a financial adviser, accompanying them to a meeting with this person is a good idea. This is especially the case if your parents have had a long term relationship with this adviser, so he should have a history of any past investments, transactions and changes. The adviser that provides financial planning should also have some knowledge of any government entitlements that they are receiving. Finally, this adviser should be able to assist you in planning for any future changes, such as in retirement plan, etc. Having a good knowledge of all financial activities and their history will make you more aware about things when required in future. This will also prevent your parents from being fooled at any organization.
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If your parent or loved one receives a government entitlement such as the Age Pension, it is important that you are aware so you can assist them in managing their entitlements.
a. These agencies do not automatically know how much a person has in a bank account or investments. You need to tell them. This means when things change, such as funds being spent or received, investments being altered, or a change to living arrangements – you need to notify them. Only then the required changes can occur. It is advised to timely update your details at government offices in order to resist any inconvenience in future
b. It will be good if you at least once visit the government departments with your parents from where they receive entitlements such as pension so that you are very well aware of the procedures and systems that are followed there. This will be greatly helpful in future in case your parents are not able to visit these offices and you are required to operate on their behalf. You will not find any difficulty in dealing with them.
4. Managing the ID’s of financial planning for parents
It is very important to get all the ID proofs of your parents kept safely and get them updated as and when required. Consider the following list of ID’s to be accomplished:
a. Aadhar card
b. PAN card
c. Voter ID
d. Birth Certificate, etc.
These will come very handy and useful while seeking any service, claim or entitlement at any government or non government institution. Having short of these IDs mostly create great problems while having them make things happen easily and hassle free.
5. Ensuring family entitlement
If any of your parents receive any financial entitlements or claims, it is very necessary to make sure that names of both of them are included in the documents i.e. the other one should be able to receive the entitlement after the one who originally receives it. This will avoid troubles in getting your other parent entitled for the family pension etc., and will make things far easy reducing pressure and burdens on you in future.
Financial planning is a must for all. Smart steps like retirement planning, health insurance, etc lay a financially secure future for your parents and taking advice from a certified financial planner makes it even stronger. Taking care of these simple things mentioned above will greatly reduce burden from your shoulders and will help you manage things in a better way.
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