Due to lessened mental and physical capacities, the elderly can be among those most in need of financial planning and personal finance assistance. With age, it’s hard to avoid becoming increasingly reliant on others, including in financial matters. Otherwise forgetfulness leads to bills not being paid and necessary tax and other forms not being submitted, checks being lost, etc. Diminished judgment leads to investments and purchases that are unwise and inappropriate, if not outright scams.
Unfortunately it can be quite expensive to work with a professional financial planner, and an elderly person could easily find him or herself in that unenviable window where they have enough money to worry about how to manage it properly as their capacities diminish, but not enough to comfortably be able to hire a professional to handle matters for them.
There are several options available for someone in that position.
One is to rely on friends and family. Needless to say, this is fraught with risk. Even close family members, including a person’s own adult children, not uncommonly take financial advantage of a vulnerable elderly person. Or, even if there’s no dishonesty like that involved, a well-meaning person can still do damage due to lack of knowledge, poor judgment, or irresponsibility.
If one does turn financial matters in whole or in part over to a friend or family member, this person should be chosen and monitored very carefully:
* It should be someone with a track record for trustworthiness and good judgment.
* It should be someone who has handled their own financial affairs particularly well.
* It should be someone who is not now in difficult straits financially, such that desperation could give rise to temptation.
* It should be someone who has plenty of time and willingness, not a very busy person who is taking on the responsibility reluctantly.
* The elderly person with reduced but still nonzero capacities should monitor everything that’s done in their name, rather than trust it’s being handled correctly.
* The person chosen should be willing to handle all the affairs in an aboveboard manner, such that other family and friends will be able to check what is being done and call attention to anything that doesn’t look right.
The other possibility is to use a professional financial planner, but to look for opportunities to do so free.
This has become a little bit harder in recent years, with the demise of the “Project for Financial Independence,” which was a coordinated effort by several leading financial planning organizations to provide pro bono financial guidance to people who could not afford a financial advisor. However, it’s still possible to obtain such assistance:
* Most professional financial planners offer free initial consultations. It may be as little as an hour or two, but it’s sometimes possible to get pointed in the right direction and gain a little more knowledge and skills through such consultations.
* Some financial planners offer a two-tiered system where certain general types of assistance are free, and more specialized types are not. The idea is that the people who are happy with the free services and decide they want more would naturally be inclined to get that from the same party. But one could always just stick with the freebies and still get at least some benefit.
* Though the coordinated “Project for Financial Independence” is defunct, that doesn’t mean there are no longer professional financial planners offering certain pro bono services to suitable clients. The Financial Planning Association and the Foundation for Financial Planning are two starting places for finding pro bono financial planning. The best course of action may be contacting the local chapter of the Financial Planning Association directly to inquire about pro bono financial planning in one’s area.