Retirement expert: What I learned after becoming my mother’s financial caretaker

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Many don’t factor in taking care of aging parents when making long-term financial plans — and this could be preventing seniors from getting the care they need.

On Yahoo Finance’s Decoding Retirement, Bank of America’s head of retirement, Chris Herman, shared a personal anecdote about how his own mother’s divorce and eventual need for a caregiver forced him and his siblings to have some serious talks about money.

“When my parents divorced, my mom was not in a good position financially,” Herman said (see video above or listen below). “She was very concerned about her ability to continue her lifestyle, let alone retire, at some point in the future. And I took it as my role for her to be [her] financial caregiver.”

Herman admitted he wasn’t aware of his parents’ financial situation before their divorce, which meant that they had to sit down and take stock of all of his mother’s assets to get an idea of where she was starting.

“Maybe just in finding the place where you are, you’ll find some comfort,” he recalled telling her before they made a financial plan.

Herman said he worked with his mother as her financial caretaker “over the span of 25 years,” constantly checking in with her on her financial situation. This included factoring in what kind of care she would get if she were no longer able to live on her own.

“Ultimately, when my mom was not able to live by herself anymore, she moved in with my oldest sister,” he shared, noting that it was a decision made with his sister. “It was my mom’s choice. That’s where she wanted to be.”

But while their years of financial planning had made that move possible, they didn’t consider what would happen if Herman’s older sister could no longer take care of their mother.

“Eventually, my sister’s ability to care for my mother deteriorated as well,” Herman said. “As she got older, … for my mom’s safety, for my sister’s safety, we needed to put her into an assisted living facility.”

Herman admitted that was one place they could’ve done a better job planning. Though assisted living or additional care was not their ideal situation, he noted that planning for that possibility would’ve helped everyone in the long run.

“Having that conversation with the person you expect is potentially going to need long-term care — it’s a difficult conversation to have,” Herman said. “Oftentimes, the elder person will not want to engage in that. They’ll be adamant in terms of, ‘I’m not going to be a burden on you, and I’m never going to live in assisted living.’”

“But just know in the back of your mind that one of those two is likely to come to pass if they live [long] enough,” he added.

Even if your loved one resists the conversation, he reiterated that asking them which potential option they would prefer is still a necessary topic of discussion. It’s also important for the child to know where they stand and what they’re willing and able to do to care for their loved one as they age.

“It’s OK to say, ‘I would not be in the position to care for you myself personally,’” he said. “Then what can you do? Are there other options available to you? Having that conversation and then laying out some options … Don’t wait until you’re in the moment to have those conversations.”

For those who don’t feel confident taking the reins fully, Herman recommended looking into a trusted individual to work with as you plan, whether that be a well-informed friend or a professional.

“There are burdens well beyond financial that are associated with caregiving that buying insurance doesn’t necessarily cover,” he said.

Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.