Going home to your parents’ house is a wonderful time where we get to spend quality time with our family. For those who live away from our parents, coming home can also be a time of recognition that they are getting older and may need extra help.

This year, take time to discuss aging, retirement and end-of-life affairs so that you hear directly from Mom and Dad about their specific wishes, enabling you to act on their behalf if anything happens. You’ll have the chance to implement a plan that protects not only them and their assets, but also you and yours.

Andy Smith, CFP®, Executive VP of Investments at The Mutual Fund Store and A Place for Mom Advisory Board member, provides financial planning to families on a daily basis and was kind enough to offer his expert guidance:

“It’s important to have the ‘tough conversation’ about finances and senior care sooner rather than later. On The Mutual Fund Show®, we talk about wanting people to do this while everyone’s healthy and sharp. The longer you wait, the more difficult and expensive these talks may be.”


Smith discusses how retirement costs are often much higher than people anticipate and can drastically affect the quality of your retirement years:

“Your average 65-year-old couple thinks they’ll spend around $50K on healthcare costs throughout retirement. In reality, their number’s closer to $241K. Depending on what they’ve done all along to prepare for retirement, they may need to drastically rethink some key pieces — Social Security strategies, healthcare cost management, debt service, estate planning… the list goes on. You have to look at all of these things, together, and you have to have the right full-scale plan in place.”

Smith recommends saving at least 10% of your gross income. Then, each year, he says you should try to save 1% more until you reach the maximum contribution limit for your employer-sponsored plans ($18K for people under the age of 50 and $24K for people over the age of 50).

Rarely do people save more than this, but if they do, that’s when it’s time to start looking at Roth IRAs or some sort of taxable brokerage account for overflow dollars.

Here’s an example of how saving 1% more each year will work for you:

Frank and Tina, 35, each earn an annual salary of $50,000 and start contributing 6% to their 401k on the same day. However, Tina increases her contributions by 1% each year until she reaches the recommended rate of 15%. Frank continues saving 6% annually and never boosts his contribution rate. Assuming annual 3% raises and a 7% annual rate of return, Tina’s balance will be $966,395.81 in 30 years, while Frank’s balance at the same time will be $453,013.86. Tina’s nest egg is worth $513,381.95 more than Frank’s because she made small changes each year to the amount she saved.

Families often come to Smith seeking this financial advice for their aging loved ones. When asked about the biggest misconception these families have, he said:

“Assumed health care costs is a big one: how people think they’re going to spend $50k on healthcare costs throughout their retirement, but that number is closer to $245k. An overwhelming majority of Americans think that Social Security is going to cover a huge part of their retirement income needs, or that there’s some magic bullet or secret formula for investing and retirement success. There’s not — it all comes down to saving as much as you can for as long as you can… all the way along.”

Whatever the “average” lifetime data is for a person, you need to have a plan for what happens if they live longer than expected. You also need to think about other costs like transportation. Transportation costs are going to be the second largest expense you have in retirement, which will account for 15% of your overall expenses.


If you know it’s time to talk with your loved ones about finances, but are having difficulty approaching the conversation, here are some pointers from Smith that can help you prepare:

  • Practice What You Want to Say. Just like with reading or acting, the more familiar you are with a subject, the more comfortable you will be and the more realistic things will sound. You don’t want to get too emotional, but you don’t want to be a robot, either.
  • Talk in a Comfortable Setting and Be Natural. Have a normal conversation. Act like yourself. You don’t want to heighten already-high emotions.
  • Ask Your Parents about Their Goals. It’s a great ice-breaker that provides a segue into deeper conversations:
    • When do they want to retire?
    • What does their end-of-life care look like?
    • Do they have a trusted advisor or attorney?

Smith has an excellent question to discuss with aging loved ones: “If you changed nothing about what you’re doing right now, what is the probability that your long-term plans will be successful?”

If, together, you determine that their long-term plan — or lack thereof — is not successful, he has a follow-up: “What can we change now to improve your probability of success so that you can reach your goals?”

The biggest mistake you can make is not having the conversation — it will only make things more difficult and expensive down the road.


It really helps to work with a professional advisor who can become a “quarterback… someone who can take certain burdens off the family,” notes Smith. However, make sure the person ‘on the other side of the table’ is not trying to push a product or just make a sale:

“Brokers push people into improper products for any number of reasons: greed, meeting quotas, etc. To avoid this mess, always work with a fiduciary — that’s what our advisors are: people who are legally-bound to put your loved one’s best interests first,” Smith candidly suggests.

Fiduciaries know that one size does not fit all when it comes to retirement planning, and they’ll work to get you organized and take inventory early in the process. They’ll also suggest having everyone present from the very beginning who needs to be involved in family discussions — because, more than likely, you’ll be having many conversations and you want everyone on the same page all along the way.

In partnership with your advisor, there are a few steps your family will need to take to get your aging loved one’s affairs in order:


Getting organized for all the legal documents surrounding your loved one’s estate means you’ll need to gather a lot of information. The Mutual Fund Store®’s Personal Affairs Organizer is easily downloaded and is a helpful tool that Smith shares and uses with his clients.

Here is some, but not all, of the information you‘ll need:

  • User names and passwords
  • Bank accounts
  • Retirement accounts
  • Proof of ownership (for example, a car or boat title and registration)
  • Marriage license
  • Insurance policies
  • Personal financial statements (including any outstanding debts owed)

Keep information in a secure location that’s easily accessible (a safety deposit box or safe) and known to a few trusted family members. (Don’t forget to share any keys or passwords needed to access the information!) Letting people know now where things are prevents a scramble later when emotions could be heightened and decisions would have to be made quickly.


It is vital for your loved one, while physically and mentally able, to prepare key legal documents that will determine their end-of-life care, discuss their care wishes and protect their estate. Without these documents, families could accumulate significant costs while navigating the courts, and family relationships could become turbulent if disagreements arise regarding care for loved ones. Heartache and court costs could worsen more, too, if any loved ones suffer from cognitive impairment such as Alzheimer’s or dementia. These key documents prepared correctly, however, become like gifts to your family.

Documents to create and/or update that empower your family to better control their future?

  • Will – Someone will need to be appointed to serve as executor
  • Advanced directives, such as a living will and durable power of attorney for health care
  • Durable power of attorney for finances – Someone will have to be named as the legal authority to manage the property


While your loved one is of sound mind, it’s important to keep current all their necessary information and legal documents. Visits are great times to review your loved one’s wishes and estate plans to ensure everything remains in order. Smith comments, “Personal preferences may change over the years, so regularly revisiting your loved one’s plans and documents — just in simple, relaxed conversations — helps keep their wishes clear.”

Finally, remember that if your family is communicating, has a plan and is aware of your loved one’s health or financial issues, things are in far better shape and everyone is ready to act quickly when needed. Smith notes, “The key is to avoid tremendous amounts of emotion, headache, heartache and stress. If you’re working with a fiduciary, let that advisor be your quarterback as you work to protect assets and plan ahead.”


The first thing you should do after having the conversation with your loved one is to document everything and have each person document how they heard and understood the conversation. Then, come up with a common depiction of the event, so each person feels confident with the outcome. Having this documentation will make interaction with attorneys, accountants and financial advisors that much more seamless and materially worthwhile.

About Andy Smith  866-477-0836

Andy knows first-hand what’s on the mind of investors. As an advisor and CFP® practitioner with The Mutual Fund Store®, he works daily to help clients navigate the markets and provides investors with much-needed financial and retirement-planning direction.

Beyond his daily client interactions, Andy has spent more than a decade on the airwaves guiding listeners towards their investment and retirement goals… all the while offering sensible, actionable perspectives on finance, investing, and the national and global economies.

With more than 50 years of combined business experience, Andy and his co-host (and father!), Denny, have the background, experience and insight to help listeners with their financial questions each week on The Mutual Fund Show®.

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