When should you begin to plan your parent’s finances along with yours?

Till the time I was 30, I always sought my parents’ advice on financial matters. They had been the first one to advise me regarding insurance, investment, how best to save my money, etc.

However, as I got older, I noticed that my parents were losing touch with their financial matters and often sought out my advice on matters where they would previously have advised me.

The day of reckoning arrived when my parents called me, frantically informing me that they had been victims of financial fraud.

While I was able to extricate them from the situation and get their money back, I realized it was time to take matters into my own hands and take decisions for their future financial safety.

I immediately began looking into their estate documents, investment, term insurance benefits they were set to receive and brought in professionals to help with their financial allocations.

Read on to learn about the steps that can be taken to plan for your parents’ finances along with yours:

7 Steps to Plan for Your Parents Finances

1. Talk to them:

Learn about the investments they have made, the different bank accounts registered to them, the credit cards they have, and so on. Put together deeds to their property, understand their assets. 

Also Read: 10 Best Ways To Invest Your Money In India To Get Higher Returns

2. Bring in professional assistance:

If your parents are yet to make a will, get a lawyer so things are not complicated afterward.

Financial advisors can also be called upon for guidance in matters of their assets. Ultimately, make sure you know where the documents are stored.

3. Ask your parents to pick a power of attorney:

This could be you and one other person if they so desire. The power of attorney will allow you to act on their behalf for legal and financial matters.

Make sure while taking upon yourself this role that you have the time to sort through their accounts, and make informed decisions to ensure their wellbeing.

With the power of attorney, you can help them access their ULIP benefits too and ensure they receive the ULIP tax benefits.

Term insurance benefits are also compiled within ULIPs, allowing these to function as a one-stop solution for both investment and insurance.

Also Read: How to Decide the Term of Your Term Insurance Plan?

4. Stop unnecessary recurring payments:

A lot of people get signed up to value-added services via network service providers or through credit cards, that they don't actually require.

These offers or services are automatically renewed and lead to expenses that aren't actually required. Go through their bank statements, understand where these expenses are occurring and put an end to them.

If they have opted for term insurance benefits, stop them since opting for a ULIP will enable them to access insurance too.

Also Read: Top 10 Best Life Insurance Companies in India

5. Analyze and enhance investments:

Chances are that your parents aren't really looking for high returns anymore, but a consistent income plan to supplement their savings during retirement.

ULIP benefits are especially striking here since you can choose a portfolio that suits your parent's requirements. ULIP tax benefits will ensure maximum savings and allow for your parents’ savings to be replenished safely.

6. Ask after their philanthropic plans:

Often, people have the desire to be charitable but it is unaffordable when they have to handle the responsibilities of their children’s education, building a home, etc.

However, senior citizens often have the luxury to contribute funds to any social cause they feel passionately towards, and if your parents have harbored a desire to contribute in such a manner, it is essential that their wishes are taken into account at this point.

7. Maintain transparency:

When you have the power of attorney to make decisions on their behalf regarding their finances and legal matters, it is essential to keep your parents in the loop regarding decisions you make on their behalf.

Make it a point to give them monthly or quarterly updates regarding the investments they have made, and the returns they are gaining.

Also Read: Top 10 Health Insurance Companies in India

Wrap Up

Parents will often shy away from discussing finances with children owing to a desire to not look weak or helpless. However, it is essential for children to initiate this conversation and help parents allocate their resources productively.

You can easily help your parents choose a diversified portfolio that allows them to invest in low-risk funds. ULIP tax benefits are also available with this plan if the Sum Assured is 10 times the single premium.

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