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Baby boomers, those born between 1944 and 1964,  are the wealthiest generation in American history. Despite this fact, boomers are still facing unique challenges, including: 

  • Taking care of aging parents 
  • Retiring during a period of historically low interest rates 
  • Longer life expectancy 

If your parents are boomers, you can help them make the most of their wealth. We’ve outlined four easy suggestions. 

1. Ask to have a role in their finances.

Having a role in your parents’ finances doesn’t mean you have to be an owner on their accounts or help make decisions. It simply means you’re asking to be informed on their financial standing. This includes debt, assets, and insurance. 

I understand some parents may be hesitant to discuss finances. That’s okay. They may be private people and feel uncomfortable sharing. Or, they may be ashamed if they didn’t prepare well. Either way, it’s important to know about their situation sooner than later.

2. Understand their portfolio should be different than yours.

Many of my clients with boomer parents are concerned about what’s in their parent’s investment portfolio. This is a valid concern—it shows you care about your parents and want to make sure they aren’t being taken advantage of by their advisor. At the same time, the investment portfolio of someone in retirement should look different from your own. 

As a younger worker with high human capital (the ability to work and earn income), your portfolio should be focused on riskier assets like stocks. As you age and enter retirement, your focus changes from accumulation to distribution. This should cause your investment portfolio to change, too. 

Should your parents invest primarily in stocks? Probably not. Should they own annuities? Possibly. 

I encourage you to be product agnostic when reviewing their portfolio. Don’t think of a certain investment product as being bad or good. Instead, measure the benefits of the investment product on how it helps your parents efficiently manage retirement distributions.

3. Inquire about long-term care plans.

This is huge but unfortunately, it’s rarely talked about. Long-term care includes the care received at home or in a facility. It’s expensive and can last for years. 

Even if your parents are in the younger range of baby boomers, it’s a good idea to start talking about it now. As we’ve discussed before, the best time to plan for future long-term care is in your 50’s. 

First, this helps secure quality care. The earlier you plan for these expenses, the better quality your parents can receive. Second, if you secure some type of long-term care insurance to help pay for these expenses, you can save your parents from draining their nest egg. Average annual costs could be over $100,000. If your parents are younger and don’t need care for 20 years, that cost will only get higher with inflation. 

4. Know where their estate planning documents are located.

Do you know if your parents have a trust or will? If so, do you know where they are located? What if they were in the hospital and you needed to make healthcare decisions for them—do they have a power of attorney in place? If not, make this a priority!  At Stewardship, we make this process easy for you and your parents. 

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