Grandpa's Got a New Girlfriend: Should You Worry?
As financial advisors, we pride ourselves on the relationships we build with our clients, often over multiple generations. It isn’t at all unusual for the children and even grandchildren of some of our clients to appreciate both the trust their elders have placed in us and the respect and the care with which we handle the financial responsibilities that come with that trust. This frequently leads to advising relationships that pass from parent to child and beyond.
There are times, though, when that very trust can put us in some tricky situations. For example, imagine that you and your recently widowed father share the same advisor and you are concerned that “Dad is taking up with some lady at the retirement community.” Typically, in addition to concerns that your father might be taken advantage of, you and your siblings may also have worries over what Dad might decide to do with the assets on which he depends for maintenance and which the next generation stands to inherit, once Dad passes on.
When counseling with families in a multi-generational setting like this, it’s important to remind the worried kids that their parents, like all human beings, still have a deep need for companionship and intimacy. We never outlive our need to have caring people in our lives. In fact, research suggests that the number-one indicator for those likely to live into their 90s and even 100s is that they have a network of friends and loved ones who provide rich, attentive relationships.
This becomes an important consideration when planning for the retirement years and beyond. One of the most important questions that pre-retirement individuals need to ask themselves is, “What plans should I make for my social needs?” Often, grandparents relocate to be near grandchildren, only to see the grandchildren grow up and leave to pursue careers. Also, retired couples age differently. Statistically, women outlive their husbands by about seven years, for example. What might this indicate about that time in a surviving widow’s life when her husband is gone but she still longs for companionship? It may suggest that having Mom live with her adult children after Dad passes away may not be the best fit for Mom’s needs. Instead, she might find more people with whom to develop enjoyable, sustaining relationships in a retirement community, surrounded by people closer to her age and interests.
Longevity is both a blessing and a curse. Retirees who still enjoy good health and mobility need to live in a setting that enables them to continue doing the things that interest them. Those who are losing those abilities still require, in addition to good care, nutrition, and a safe and accessible environment, availability of plentiful and high-quality relationships. Isolation can be deadly at any age, but aging retirees are especially vulnerable. The problem is, isolation can occur even for those who are still living in their own homes or the homes of their adult children, if they are unable to get out and connect with others. Providing for all these needs requires advance thought, a well-designed strategy for retirement funding, and attention to the retiree’s lifestyle preferences and priorities. In other words, taking into consideration the sustained need for meaningful social interaction is one of the most important aspects of planning for retirement.
As we consider aging parents and their needs, we should also give attention to good estate planning. Those approaching retirement—especially those with children and grandchildren to consider—should have in place a plan that has been carefully constructed to fit the individual’s or couple’s requirements and priorities. Once that plan is in place, it’s vital to communicate it clearly to all interested parties. When proper estate planning has been done and when everyone understands the plan, there’s less likelihood that the adult children will worry about what Mom or Dad are doing with their time in retirement. The important decisions have been made, and everyone can focus on what’s most important: involvement in each other’s lives.
If, on the other hand, there is no estate planning in place—if, for example, a surviving widow in her later years doesn’t have a will or a trust—then it may be time to have some careful conversations involving the aging parent and their adult children or other family members. These can be difficult talks, and sometimes it helps to have a trusted third party—like a financial advisor—take part. A trusted, professional advisor can ask questions that may be hard for family members to bring up. However it is managed, though, it’s essential to get all the cards on the table: the aging parent’s wishes for the disposition of their assets after death; putting in place advance medical directives; location of documents and accounts; and other important legal and financial matters. Getting all these matters settled and communicated in advance can be emotionally challenging, it’s true. But trying to handle them after the fact, when the aging parent has already died, is next to impossible.
The key to everything is summarized in two words: plan ahead. Adult children need to think about what their aging parents want and need, and aging parents must consider, in addition to their own preferences, what they want to pass on to the next generation. A professional, fiduciary financial planner can help both parents and children ask the right questions and come up with the answers that minimize the worries and maximize the enjoyment of the all-important retirement years.
