It is relatively easy to help support your mom or dad while they are in sound physical and mental health and living independently, but this can change overnight…
Much of personal financial planning focuses on saving and investing for your own future, to cover the costs of raising a family and eventually being able to retire independently.
However, many people are oblivious of how expensive it can be to take on the financial responsibility of caring for elderly parents.
Ahead of 1 June, the UN Global Day of Parents, JustMoney offers some sage advice about this inevitable phase of life that often brings many challenges that you – and your much-loved parents ? never imagined.
Supporting extended family
Circumstances can become particularly tough if you are a professional from a disadvantaged background who is already carrying the responsibility of supporting your extended family. See an article on understanding black tax here.
Suddenly you may have to take time off work, plus contribute to (or cover all the costs of) a parent’s medical aid, transport, doctor’s visits, and medication. There may also be the bills of a part- or full-time carer, assisted living facilities, or a nursing home. Factor in lockdown conditions as well, and this could be one of the most stressful periods you will ever experience.
Personal finance website JustMoney offers advice on planning for and navigating this stage of life when it becomes your turn to care for your parents.
1. Plan ahead:
Have a family discussion sooner rather than later, with your parents and siblings, and preferably before any health issues develop. Aim to get a clear idea of your parents’ financial needs, assets, and wishes. Should their state of affairs be worse than you thought, bringing the situation into the open can actually be a relief for your parents.
2. Selling a home:
Many people consider downsizing. Navigating a sale in the current market conditions will trigger some understandable concerns. Arming yourself with the facts is always a good idea, so do your homework on a suitable asking price and the various costs involved.
3. Update a will:
Check that your parent has a will, and that it still fulfils their wishes. Inform yourself about why it is important to update a will here.
4. Living will:
This could be a tricky topic to discuss, but many people have strong opinions about not being kept alive by artificial means, while still being kept pain-free, when there is no chance of recovery. This can be addressed through a living will. A person must be 18 years or older and ‘compos mentis’ (having full control of their mind) when making such a declaration. Find out more about a living will here.
5. Power of attorney:
This note gives you authority to act on your parent’s behalf and take decisions. It can be a general, broad directive, or limited to specific matters. It can be very useful when, for example, your mom or dad is too frail to sign documents. Power of attorney is no longer valid if your parent is no longer ‘compos mentis’. In such a case, you can apply to be the administrator or curator of their affairs.
6. Health costs:
Read the fine print of your parent’s medical aid scheme and ascertain what it covers. You may decide to upgrade to a different package at the year-end to better suit their needs.
7. Ask for help:
Find out about government, provincial, community and non-profit organisation services. Senior citizens who are registered owners of residential properties can qualify for reduced property rates, depending on the gross monthly household income.
Your parent could quality for a state old-age pension, provided that they pass the means test of the South African Social Security Agency. Currently, senior citizens receive R1780/month, or R1800/month if they are older than 75 years ? plus R250/month for six months from May 2020 due to the COVID-19 pandemic.
Your parent must be a South African citizen or permanent resident, 60 years or older, not receive payments from another social grant, and not earn more than R82 400/year if they are single, or R164 880/year if married. Assets must not exceed R1174 800 if they are single, and R2 349 600 if married. Find out more: https://www.sassa.gov.za/Pages/Older-Persons-Grant.aspx.
9. Virtual fraud:
We have all become more tech-savvy during lockdown, and this includes grandparents who want to maintain contact with their children and grandchildren. However, they could be easy targets for online con artists. Discuss some of the most common scams and the importance of not opening attachments or clicking links on unknown emails, as well as keeping user names and passwords secret. If they still fall prey to a scam, try not to make them feel worse than they already do. Focus on helping them to recover what they can.
While caring for your parents, do your best to not run up more expenses than you can afford, for example on your credit card. Continue contributing to your own retirement, even if it is a small amount every month.
Sarah Nicholson, Commercial Manager of JustMoney, says: “While juggling the financial responsibilities of caring for a much-loved parent, your own needs can fall by the wayside. Try to give yourself regular breaks and small treats. Ask for help instead of struggling alone.
“Recognise signs of stress and find support, be kind and patient with yourself, make time for other relationships. Friends and family can be a great resource. Also, there are times when it’s worthwhile taking on the services of professionals in the ageing network. Their guidance could prevent you being derailed by caregiver stress and could actually save you money in the long run.”