The oldest of the baby boomers are 70 this year, and will continue to dominate the banking market. As of 2015, there are about 10,000 baby boomers turning 65 years of age every day in the U.S, and by the year 2050 current estimates place 1 in 5 Americans over the age of 65. That’s 83.7 million seniors, or significantly more than the populations of California, Texas, and New York combined. The greatest generation is now between 100 and 70 years old themselves.
USNews says ‘AARP notes that banks should pay attention to the concerns of their older customers, who represent a growing customer base. Americans over age 50 own 67 percent of bank deposits and control 70 percent of the nation’s assets, according to AARP. With the population of those age 65 and over set to double within the next 30 years, the deposits owned by older adults are also poised to balloon.’ “Your banker might notice before anyone else in your life that you’re facing cognitive decline,” says Debra Whitman, AARP’s executive vice president of policy, strategy and international affairs, speaking at the GSA conference. That’s why she says it’s important for bank tellers to be trained to spot potential fraud targeting older adults as well as help customers who might need extra assistance.’
While 65 today is still a healthy and vital age, it is important for banks and individuals alike to keep in mind the importance of financial responsibility and maintenance as individuals grow older. It is a sensitive subject to broach, as it can feel like family members stripping control of their older relatives, or like family greed, waiting for the opportunity to seize control of assets. As technology changes, some may be unequipped to spot fraudulent activity or know how to protect themselves from it. It can also feel, for a healthy and active individual, that it is too early to be thinking about death, a stroke, an injury, or dementia leaving them unable to resolve their finances. But it is an important discussion, and one that is best handled earlier rather than later. Make sure to broach the subject with sensitivity and do not make anyone feel inadequate or unable to handle their own financial affairs. Also make sure to keep the other family members in mind and be as open as you can, as inheritance and finances can cause rifts between family if not handled with care.
Here are some tips for older adults and their family, on handling the finances of older friends and family members.
The first step is to assess the situation. Does your elderly relative need financial assistance, and how much help do they need? When you go into their home, do you see stacks of unopened mail or disorganized piles of papers? Have friends, doctors, or other family members seen signs of confusion? Do they spend large amounts of money on things like lotteries or contests or ordering from ads on TV? Have they made unusually large donations to charities or given an uncharacteristically large amount of money as a gift? Have they spoken about someone having new powers of attorney that they do not understand? Are they misplacing wallets or telling stories about losing credit cards?
Some people will readily admit to needing help keeping track of expenditures and keeping an eye on potential fraudulent transactions, some will be resistant to intervention and have it controlled on their own. Some will be resistant to assistance because they feel that greed is involved in decision-making process.
If your elder family member is the former, and is accepting of assistance, then your job is easy. With just a little time you can set a budget, add a user to your bank account so there is a third pair of eyes monitoring for fraud or excessive transactions, and you can discuss the pros and cons of setting up either a conservatorship or an adult guardianship. There is a company called True Link Financial, which includes many services that allow for independence with overall guidance, such as a debit card with spending limits set for different categories. A caregiver for the account can monitor alerts, turn the card on and off very easily, and even block specific stores if there is an issue with the user’s spending in that location. This allows for freedom of spending within the set budget.
If they are receptive, make sure that you start with the basics and determine what sources of income they have, where they bank, if they have a mortgage and what types of insurance they have. Contact information for the mortgage company, insurance agents, and brokers, financial planners, attorneys, and accountants, if they have them, is important. Ideally you will need Social Security numbers, bank about numbers, and passwords as well as medical information, and prescription medications they take.
Whether they are receptive or closed to the idea, discuss the will, living will, and power of attorney documentation as soon as possible. Find out if they have these documents, what their wishes are, and help them find professionals to help draft the documents if they do not have them already. The Aging Life Care Association has resources in this, and many other arenas.
If your relative is falling into the latter camp, and they are unwilling to talk about finances, there are some other ways around getting the information out of them.
Offer to assist them by taking chores off their plates. Doing nice things for your older relatives is a positive, regardless of the consequences, but start with non-financial tasks to prove you are looking out for them. Help them with running errands, lawn care, or other necessities, and then offer to help them with tax preparation. Most people don’t enjoy tax season at all, and helping them file returns will give you access to some of the information that may be vital if they become unable to communicate financial information later on down the line.
Take a more indirect approach by sitting down with your parents and going through the site BenefitsCheckup.org. This site is a tool to help older adults find out if they are entitled to benefits that will assist in medication payment, health care, utility reduction, and more. Walk through the sign-up process with them. Most of the information involved in this check to see what they qualify for is financial information on benefits they currently receive, monthly income, and household spending, which you can make note of yourself as you go.
Offer up a lockbox in an agreed-upon location, full of personal information, financial documents, account numbers, and more. That way a reluctant relative can feel safe that their finances and identity are safe in their own hands, but you know where to retrieve that information in case something happens to them.
These conversations can be difficult and emotional for all parties involved. Before you dive in, consider getting guidance from an expert on elder issues. Your local Area Agency on Aging (AAA) can provide referrals for experts, workshops, or resources in your area. (To find your local AAA, visit the federal government’s Eldercare Locator at www.eldercare.gov.)
Victor Notaro is an accomplished Corporate Banking Executive with a demonstrated record of success leading consultative and relationship management strategies in the financial services industry. Victor Notaro is skilled at building and managing high performing teams of professionals in commercial and corporate banking, fostering relationships with middle market and multi-billion dollar companies. Victor Notaro’s record reveals exceptional performance in the development of business capital strategy, with expertise spanning start-up of business units, leading YOY revenue growth, and producing sales in the millions of dollars. Victor Notaro is the Senior Vice President, Corporate Banking / MidCorporate Banking at Citizens Financial Group.