early retirement

    2012 Resolutions for Boomers with Elderly Parents

    This is the time every year that we decide what we are going to do differently in the coming year, how we are going to improve, what we are going to stop doing and what we are going to start. I’d to suggest some resolutions that would be very helpful to you and your elderly parents. Here they are;

    Take the time to ask your parents how they met. Bring along a tape recorder or video camera and record their answers.

    At the same meeting ask them how they want to be remembered by their grandchildren and great grandchildren. Again record their answers.

    Schedule a family meeting with your parents, and your siblings to discuss the critical issues that your family will face as your parents get older.

    Complete the Five Wishes Questionnaire yourself and then bring copies to your parents for them to complete. You can find this form at www.agingwithdignity.org

    Find out where your parents keep all their important papers and make sure they are safe. These important papers should include wills, durable powers of attorney, health care proxies, life insurance policies and beneficiary statements for all annuities and retirement accounts.

    Ask your parents to record the names of all bank accounts and investment accounts   that they have. Ask them to include account numbers as well. Have them keep this information in the same place they keep their important papers.

    If your parents have online accounts ask them to record the URL addresses of these accounts, their user names and their passwords. Again keep this info in the same place as their important papers.

    If you complete these resolutions you will save your family much heartache and anxiety. You will also provide your parents with peace of mind, knowing that they have done the critical planning that will keep their family together.

    Are your parents a tax deduction?

    You may have already started putting the information together for your taxes. But there’s something important you need to know. If you are providing substantial financial assistance to your parents, you should be aware that you may qualify for significant tax deductions!

    The key to Internal Revenue Service assistance in caring for an elderly relative is whether you can claim the person as a dependent. If you and your parent meet IRS requirements, you’ll be able to claim an added personal exemption on your income tax return. For 2016, each exemption allows you to reduce your taxable income by $4,050.

    Then there are possible deductions and credits. If you pay medical expenses for a dependent parent, you may be able to deduct some of those costs. Hire a caregiver to help you out and a credit could cut your tax bill a bit more.

    A dependent parent cannot make more than the exemption amount. This is $4,050 for 2016. The income barrier represents taxable income. Social Security normally is excludible, but if they have other income, which in many cases means interest and dividends, some is taxable. If your parent meets the income requirement, than you must determine the level of support you provide.

    To be deemed a dependent for tax purposes, your parent must get more than half of his or her support from you.

    If your parent lives in your home, to reach the 50-percent-plus threshold, you can take into account the fair-market room rental, food, medicine and other little support items.

    But your parent doesn’t have to live with you. When a parent is able to remain in his or her own house, in an assisted living facility or a nursing home, costs you pay for parental support at those locations count toward meeting the IRS requirement.

    Once your parent meets the IRS dependency tests, you can use any medical expenses you pay for mom or dad toward your itemized deductions. Since medical costs must exceed 7.5 percent of your adjusted gross income before you can claim them, a parent’s added expenses could help you meet the requirement.

    When adding up those parental medical costs, don’t forget premiums for supplementary Medicare coverage or long-term care insurance. Once your parent is your dependent, some of these payments that you make can be counted toward your deductible medical expenses.

    And if your dependent parent lives with you and requires continual care, you may be eligible for another tax break. What you spend for this attention generally won’t count toward the medical deduction. But if it’s necessary so that you can go to work, you can claim the dependent care credit, which could be as much as $3000. The amount is based on a formula considering your income level. But it’s a credit not a deduction. This means its a dollar for dollar reduction in taxes.

    If you share the cost of caring for your parents with your siblings you should file Form 2120, Multiple Support Declaration with your tax return. This form indicates that while several siblings contributed to your parent’s support, the others waive any tax-exemption claim.

    You also need to get signed statements from your siblings acknowledging that they waived their tax claims. You don’t have to send these documents with your 1040, but keep them in your records in case the IRS ever questions your exemption or medical deduction claims.

    If this arrangement sounds unfair to your siblings, you should inform them that the tax benefit can be rotated among you. One child can claim the deduction one year and another the next. But be careful that you pay the expenses in the year you claim the deduction.

    For more detailed information on how to claim your parent as a tax deduction, please refer to this article at TurboTax.

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    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    Important Information You Must Save for Your Elderly Parents

    Every time I speak before groups of baby boomers and their elderly parents, I remind them of the importance of getting all their critical information down on paper or in a computer file that can be accessed by the family if there is an emergency.

    What kind of information do you need close at hand? Copies of wills and trusts, durable powers of attorney, health care proxies and living wills should all be readily available. In addition the names and contact information for any family advisers(attorney, doctor, minister, banker etc.) should also be accessible.

    Financial information such as the name and account numbers for bank and investment accounts should be listed. In addition the beneficiary statements for IRA’s, annuities and life insurance policies should be close at hand. Make sure these are up to date, and the beneficiary has not already passed on. Also make sure there are contingent beneficiaries listed if the primary beneficiary is deceased when the funds are released.

    Last and perhaps more important than ever before, make sure the internet addresses, usernames and passwords for any online financial accounts are readily available. When one of my clients passed away, his wife did not know the internet accounts he had utilized to manage his investments. The institutions would not give her any information about the accounts. She eventually had to hire an IT specialist to hack into his accounts and it took months!

    passing the torch book smallSave info on important documents for your parents. There are a few ways to store all this information. One is a simple three ring binder. If you purchase my book, Passing the Torch: Critical Conversations With Your Adult Children, there is a section in Chapter 2 of the book called “Lifefolio” that more fully discusses the information noted above. Another approach is to copy all the information digitally into a cloud system such as Dropbox or Google Documents. Then all family members who are authorized can access the information from any computer or tablet connected to the internet.

    Whichever way you do it, do it now. You never know when there might be an emergency and you will need to access critical information for your parents.

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    PERMISSION TO REPRINT:
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    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    Don’t Darken the Twilight Years of Your Parents’ Lives

    Some people refer to old age as the “winter” of one’s life. But that doesn’t mean our elderly parents’ lives have to be dark, cold and lonely. There’s so much we can do to keep the sparkle in their lives, but we must cover all the angles.

    There are a number of problems that adult children might come across when trying to help their elderly parents. First and foremost, parents will always view their children as just that – children. It is very difficult for them to imagine a scenario where they become dependent on their offspring. This can make them defensive and difficult to deal with. Another issue is that elderly parents, for one reason or another, are not always fully open about medical, financial and other important issues. This can lead to great strain on the family later, when action needs to be taken but the children are unaware of vital details.

    In their old age, parents might have increasing trouble with everything from medical and financial needs, through to everyday tasks like shopping, laundry, cooking and cleaning. And if children are in full-time work themselves, with families of their own, care for their parents might just be the final straw that breaks their backs. But there are ways children can help their parents without being impacted so much. First, one needs to know all the details of their parents’ habits, needs and lifestyle. Look for tell-tale signs that they are struggling; are they keeping enough food in? Are there household tasks being left undone? What medications are they taking? What are their effects? Details such as these will help in deciding the best course of action.

    Nursing homes are often the first thing people jump to when care for their parents is needed. However, the fact is, many elderly people do not need nursing homes. Retirement villages are alternatives to nursing and care homes and give the elderly all the living assistance they need, while allowing them to maintain privacy and independence. They can improve their health with exercise, good diet and a generally more positive outlook. Such communities allow them to be surrounded by friends, have professional assistance on hand when they need it, and not feel like they are a burden on their children

    For many parents, being looked after by their children is unnatural and undesirable. Communicate with your parents and you will understand how to both please and help them.

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    PERMISSION TO REPRINT:
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    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    A Caregiver’s Story (In his own words)

    I was suddenly thrown into the role of caregiver on November 21, 2005. This is the day that my wife Heather and I were stunned with the news that she had malignant pleural mesothelioma. Our lives changed from being the happy parents of a three month old daughter to a family thrown into chaos. Plans for celebrating Lily’s first Christmas were replaced with details of Heathers need for immediate treatment.

    As the doctor told us about the illness, my wife seemed to be lost in shock and disbelief. She said nothing as we were given three options for finding a specialist who would provide her treatment. The university hospital was nearby and we could choose the convenience of not having to leave the area for her treatment. Although the regional hospital had a great reputation, a developed mesothelioma program wasn’t available. Dr. David Sugarbaker specialized in mesothelioma, but that meant traveling to Boston.

    It was then that it hit me that my life had changed as much as hers. Heather seemed unable to respond to the doctor with a decision, too shocked and terrified by the news, so it was up to me to choose her care. I immediately told the doctor “Get us to Boston.” Traveling would be inconvenient, but the specialist seemed our best hope, and I was willing to do anything in the world to help her.

    Heather and I had both worked full time up until the diagnosis. After that, I could only work part time because of the time spent making appointments, travel arrangements, and the trips to Boston. Through it all, Lily still needed my attention. Heather, of course, wasn’t able to work at all. The chaos of those first two months was overwhelming. There was just so much to do, and the list continued to grow no matter how hard I tried to accomplish the needed tasks.

    This was when I was assailed by the fears of what the future might bring. I had to face that fact that my wife might die and I would be alone to raise our daughter.. The possibility of losing our home and all of our possessions because of lost income and the cost of traveling for treatments to battle the mesothelioma scared me to the point that I started to bawl my eyes out right on the kitchen floor. The added stress of keeping my fears from my wife and young daughter made me feel isolated and alone.

    I was slow to realize that we had never been alone. Friends and family stood by us, offering words of comfort and even financial assistance. Support was offered by complete strangers as well. We can’t thank them enough, but it taught me an important lesson that I can share with other cancer patients and their caregivers. Accept the help that is offered. The things to worry about are many, and any relief will reduce the stress so that you’re more able to handle the next task on the list. Emotional support may be the best offer of help. It proves that you’re not alone with your burdens.

    It’s not easy to be a caregiver to someone who has been diagnosed with a serious illness. Your life is changed to one full of uncertainty, chaos and stress. It’s a job that you can’t walk away from when you are panicked or overwhelmed. All you can do is hold on to hope, and lean on those who care about you.

    Heather is now cancer free, but months of fighting the mesothelioma through surgery, radiation, and chemotherapy took us away from anything resembling a normal family routine. Although as a family we struggled through some bleak times, we never lost hope. With the support of friends, family, and strangers we were able to keep our sanity and work our way through the life challenge that threatened to destroy us.

    I’ve learned a lot from being a caregiver to a loved one with a serious illness. Possibly the most important lesson is that it takes strength to let go of pride and ask for help. No matter what the challenge, hope will keep you going, and emotional support keeps that hope alive.

    Tending to the needs of my wife and daughter while juggling the medical appointments, travel and normal household responsibilities showed me that I could manage any amount of stress. It also polished my time management skills. I was able to return to school to earn my degree two years after Heather was diagnosed with mesothelioma. Fighting for Heather made me see that I was capable of doing more than I could have ever dreamed.