Facts on Finance

What It Means to Be a Financial Caregiver for Your Parents

Kristine Voorhees, CMFC, Financial Advisor with Waddell & Reed

If you are the adult child of aging parents, you may find yourself in the position of someday having to assist them with handling their finances. Whether that time is in the near future or sometime further down the road, there are some steps you can take now to make the process a bit easier.

Mom and Dad, can we talk?

Your first step should be to get a handle on your parents’ finances so you fully understand their current financial situation. The best time to do so is when your parents are relatively healthy and active. You can start by asking them some basic questions:

        • What financial institutions hold their assets?

        • Do they work with any financial, legal, or tax advisors?

        • Do they need help paying monthly bills?

Make sure your parents have the necessary legal documents

In order to help your parents manage their finances in the future, you’ll need the legal authority to do so. This requires a durable power of attorney, which is a legal document that allows a named individual to manage all aspects of a person’s financial life if he or she becomes disabled or incompetent. A durable power of attorney will allow you to handle day-to-day finances for your parents, such as signing checks, paying bills, and making financial decisions for them.

In addition to a durable power of attorney, you’ll want to make sure that your parents have an advance health-care directive, also known as a health-care power of attorney or health-care proxy. An advance health-care directive will allow you to make medical decisions according to their wishes.

You’ll also want to find out if your parents have a will. If so, find out where it’s located and who is named as personal representative or executor. If the will was drafted a long time ago, your parents may want to review it to make sure their current wishes are represented. You should also ask if they made any dispositions or gifts of specific personal property.

Prepare a personal data record

Once you’ve opened the lines of communication, your next step is to prepare a personal data record that lists information you might need in the event that your parents become incapacitated or die. Here’s some information that should be included:

• Financial information

• Legal information

• Medical information

• Insurance information

• Advisor information

• Location of other important records

• Funeral and burial plans

Don’t be afraid to get support and ask for advice

If you’re feeling overwhelmed with the task of handling your parents’ finances, don’t be afraid to seek out support and advice. A variety of local and national organizations are designed to assist caregivers. If your parents’ needs are significant enough, you may want to consider hiring a geriatric care manager who can help you oversee your parents’ care and direct you to the right community resources.  Finally, consider discussing the specifics of your situation with a professional, such as an estate planning attorney, accountant, and/or financial advisor.

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Financial Focus

Text provided by Edward Jones

As an investor, your main goals will change at different times in your life. During your working years, you need to grow as many resources as possible for retirement. Once you retire, however, you will likely need to focus more on getting income from your investments. But what are your options?

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What Can a Presidential Election Year Mean for the Markets?

Text provided by Stifel Nicolaus

With the presidential election just around the corner, you might be wondering what, if any, effect it will have on the markets. One prominent investment theory seeks to link the two.

Developed by market historian Yale Hirsch, the Presidential Election Cycle Theory suggests that the stock market typically fluctuates in regular patterns over the course of a Presidential term, with the first two years tending to be the weakest, and years three (the pre-election year) and four (the election year) typically offering stronger returns.

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Best Response to Volatile Markets? Stay Calm

Text provided by Edward Jones

In recent months, stocks have fallen sharply from their record highs, with one-day drops that can rightfully be called “dizzying.” As an investor, what are you to make of this volatility?

• For one thing, you’ll find it useful to know the probable causes of the market gyrations. Most experts cite global fears about China’s economic slowdown, falling oil prices and anticipation of a move by the Federal Reserve to raise interest rates as the key factors behind the stock market’s decline.

• On the other hand, the U.S. economy is still doing fairly well. Employers are adding jobs at a pretty good clip, wages are rising, home prices are up and overall economic growth has been reasonably solid. In other words, we are in a vastly better place than in the period before the Great Recession of 2008 and early 2009, when the financial markets bottomed out.

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Addressing Women’s Unique Retirement Needs

Kristine Voorhees, CMFC®, Financial Advisor with Waddell & Reed

Women have become a powerful presence in today’s society. As a demographic group, women have a significant impact economically, academically, professionally, and personally. Consequently, there has never been a better time for women to take control of their financial futures.

Women also face unique circumstances that require special investing considerations, as evidenced by the following:

According to a July 2008 study by Hewitt Associates, women generally need more money for retirement, in part because they live three years longer, on average. Yet most women have done less to prepare for their financial security.

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