Protecting Your Parents’ Money: The Essential Guide to Helping Mom and dad Navigate the Finances of Retirement
Published: August 2011; paperback
Author: Jeff D. Opdyke
— Financial columnist; wrote the Love & Money column; author of 6 books; 17 years at The Wall Street Journal writing about personal finance, family finance and investment markets.
I liked this book and found it quite informative. It is directed to the grown children of aging parents who have been placed in the position of having to assist their parents with retirement/financial matters or those who want to help their parents plan before a crisis hits. Though written to that audience, it would be useful to someone looking toward retirement or even to the parents who could benefit from its financial suggestions and see the situation from another perspective. Opdyke has written a book that, in my view, is easy to read and understand. He gives many practical tips and examples on how to get information, documents and finances in order and help make a parents’ nest egg last. The book emphasizes the emotions and resulting stress involved on everyone and tries to offer solutions that produce the least amount of anxiety as possible. Opdyke states up front that each family is unique and that not all techniques will be appropriate for each situation. He also emphasizes the need to use professionals.
The book is broken down into 6 parts: 1) The Talk, 2) The Documents, 3) The Money-Banking and Budgeting, 4) The Money-Making the Money Last, 5) The House, and 6) The Health. Being a financial columnist, the book is the strongest in the financial areas. The first chapter really sets up the rest of the book because it is where Opdyke stresses the importance of opening the dialogue with parents concerning their finances and the need/desire for assistance. Throughout the book, Opdyke gives examples of how to start the different conversations. He makes a point of stressing parents’ independence and how children should not force anything – it has to be comfortable for the parents. Opdyke then gives many useful tips on the type of information and documents that need to be gathered and how to organize. He even has a couple of worksheets for keeping track of things. There is information on budgets-how to determine what the parents budget is, how to decrease if necessary, the discussions to have.
The parts of the book that I liked best were the chapters on money. There were many commonsense approaches to figuring out the parents’ existing budget. Opdyke explained the different types of financial mechanisms from the simple savings account to IRAs and securities. He emphasized the need to have the parents’ money work for them without the blind faith in the stock market that I’ve seen in other sources. The fact that the book was written after the 2008 crash helps to temper his reliance on the stock market. He stressed the need to watch out for unscrupulous financial people and gives examples of red flags in investment strategies. There were also straight forward examples of how different financial strategies work, or do not work. There were examples of how laddering CDs can produce more income/assets; how having all assets in bonds or a savings account is not the best strategy; and how to decide on a good savings withdrawal rate. Opdyke also showed how some techniques worked for parents with more assets but also had pointers that would apply to any financial situation. In fact, I liked that he emphasized that even a little extra cash can make a difference in a retiree’s life and security mindset. The financial recommendations of the book can also be used by the children to help them get in better financial shape.
The weakest chapters dealt with the home situation (both where the parents should/can live and what to do with the home) and health matters. Opdyke sees the 5 year Medicaid planning as risky and the Medicaid rules too subject to change. It seemed to me that he is of the view that people need to work with what they have/what their kids and family have and only use Medicaid planning in a crisis. He does, however, several times state the importance of seeking out an elder law attorney on these matters. Opdyke is a fan of LTC insurance but recognizes its limited availability at times and the expense. The book discusses LTC in terms of how to get the most in view of the cost.
Throughout the book Opdyke uses his personal experiences to show how children can/can’t assist their parents. He also makes a point of stating his belief that children owe this involvement to their parents (they took care of you, now you take care of them). The book is meant to help ease the process for children who are taking on more of a parental role over their aging and declining parents. I would recommend this book. It is easy to read, relatively short and has a lot of good, practical advice.
Reviewed by Elizabeth P. Allen