Financial 911

Mom or dad is having medical problems; maybe she has taken a fall or he is in rehab following a hospital stay. But now, it is apparent that she cannot stay home alone. You’ve decided on home care or an assisted living facility where he can be safe. During all of the turmoil and emotional upheaval, the one thing you didn’t consider is how will she pay for the care that she needs?

Faced with this situation, there are 4 steps you should take. First, locate all of his assets. This is often not as easy as it seems. For whatever reason, seniors like to spread their assets among multiple financial institutions. The second step is to determine how much income she has. Check her annual social security and pension, if any, statements. Check his bank and brokerage statements for interest and dividends. If he filed a tax return, cross check it with the statements.

The third step is to investigate any sources of funds for which she may be eligible, e.g. Veterans/Widows Pension, Medicaid, state and county programs.

The fourth and final step is to prepare a cash flow projection in order to forecast how long his assets will last. You will need to make assumptions about interest rates and increases in cost of care over time.