How to support ageing parents and avoid repeating the cycle
Don't neglect your own financial security
Over the years, I have seen an increasing number of people having to assist their ageing parents - usually because of lack of adequate financial planning, bad advice, or unforeseen events. It's a growing concern as the people supporting their parents are struggling to make ends meet themselves, and to provide sufficiently for their own retirement.
Here are some tips that will help.
Taking care of your parents is certainly a role reversal in the family. This can be tough to grapple with, and getting the conversation going can be difficult. It's crucial to be sensitive about your parents' emotions - they might feel humiliated and threatened. Try to keep the conversation casual at first, in a non-threatening environment such as their home.
It's natural to have a set of expectations when you support someone else financially. If you're able to assist your parents, be honest with them about those expectations - and be honest with yourself. For instance, it's not wrong to expect that your parents won't be wasteful in their spending. Do bear in mind, however, that there's a fine line between caring and controlling. The latter never works out well.
If you're sincere about your willingness to assist, your parents are likely to feel comfortable providing you with all their financial information. You'll need to know and understand all their sources of income, and the details of their living expenses. You'll also need to know what assets they own that can potentially generate income or be sold.
Prepare a financial plan
There's nothing like a proper financial plan to assist in creating a sense of security. Once you have all the information about your parents' income and their expenditure, a certified financial planner (CFP) can help you with a detailed analysis to determine a sound financial road map.
Whether or not to sell the family home is often a key decision. People can be sentimental about the place where all their important memories were made. But if money is tight, your parents will need to accept that there's no point in paying for the upkeep of a house that's too big for them. Some quick fixes might also be required - the sale of luxury items like holiday homes, cars or artwork.
Be careful about changing medical aid plans to limit costs, since moving schemes when you have had breaks in your membership can put you at risk of having waiting periods or late-joiner penalties. Downgrading plans within your scheme can involve a loss of cover for chronic illnesses or expensive appliances or prosthetics. You will need a full risk assessment to save costs on such a move.
Share the load
If you have siblings or other concerned relatives, get them involved. I suggest you set up a family meeting with all relevant parties to discuss how each person can assist. There's a lot more to helping than assisting financially. I also advise my clients to prepare a "family care" contract, which formalises the assistance arrangement, helps to spread the load, and prevents one person from becoming resentful if they feel that they're doing too much.
One consideration regarding sharing is whether to combine households. The success of this largely depends on the personalities who will have to live together, and the family's set of values. This arrangement might be challenging at times, but there are advantages in that you'll get to spend more time together, and you'll know that your parents are safe all the time.
The bottom line
None of this is easy. We all want to be cared about, but we fear being cared for, especially if you're a parent and you've spent your life raising happy, successful children. Many older people cling to their independence with everything they've got, thwarting even the most well-intentioned plans from their children.
Don't be scared to get professional help, and not just from a CFP. Regular trips to a family psychologist can be tremendously effective.
Whatever you decide to do, the most important thing is not to jeopardise your own financial security. Don't pause your retirement contributions while you care for your parents - or the cycle will repeat itself in years to come.
• Swart is the Financial Planner of the Year 2019 and director of Autus Private Clients