My stepdad, Terry, enjoying a luau on O’ahu.
We often see articles that included tips learned from dad, but what about financial planning tips for dad? There are a few things to keep on your radar. We often assume that being dad, he has all the answers. That’s not a good assumption to make.
Tip 1 - Discuss financial planning topics with your father such as retirement savings, Social Security plans, insurance needs, retirement activity goals, and even estate planning and end of life decisions. You don’t need to personally understand all of these areas yourself, but have a frank conversation to get a better understanding of where your father stands financially and what he is planning for his golden years. It’s best to be upfront and clear when discussing these issues.
Tip 2 - Get organized. Have an important documents binder for dad. It can come in handy in emergencies. Let your dad customize this binder and have him put all of his important documents inside such as his will, insurance contracts, durable power of attorney, Social Security statement, and even a final letter to family and friends if he desires. It’s his binder so let him personalize it all he wants. Make sure it contains all of his vital documents and that you know where the binder is located. You can read more about what to put into his binder at my blog post Do You Have a Special Emergency Binder.
Tip 3 - Communicate! Check with your father about every six months and see if anything has changed. Pay attention to health issues, lifestyle clues (i.e., has he dramatically increased or decreased spending), and social behavior. Your dad may decide that he wants to retire early, so have a frank discussion about current assets, insurance, debts, and why he wants to retire. Maybe dad has decided he loves working and wants to work longer. If so, that’s fine. Remember, your job is to be a sounding board, and to spot potential traps that could wreck his plans; not to judge him. Your goal is to make sure your father is still of sound mind, health, and is also financially healthy and making good decisions. If you see warning signs such as deteriorating health, overspending, or erratic behavior it’s time to speak up, but in a supportive way.
Again, you don’t have to understand all of these areas, but you do need to understand your dad’s goals and plans. Discussing these points should be done open and honestly. Topics that you and your dad do not understand should be noted and both of you should make a plan to get answers. Follow through by getting professional help as needed. As an independent Certified Financial Planner™, I can help you with the unfamiliar areas, set a timeline, and put that plan into action to help dad get ready for retirement and beyond.
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