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What to Do When an Elderly Parent Makes Poor Financial Decisions

How can you help aging parents avoid running out of money? Find out how to start the conversation about money decisions and what resources may be available.


Key Takeaways

If your aging parents have made poor financial decisions and risk running out of money, you may have to step in.

Have an honest money conversation with your parents about what to do, or consider working with a financial planner.

Other ways to help include creating a budget, establishing boundaries, and exploring Medicaid and community resources.

Helping elderly parents can be a challenge, especially if they face financial and health care problems or make poor decisions with their money. While you may want to provide financial help for your elderly parents, talking about these issues can be difficult.

Financial consultants Trey Byrd, Josh Freeborn and Duo Tran provide insight on how to approach the subject and explain why it’s essential to start the conversation sooner rather than later.

The Growing Trend of Financial Insecurity in Elderly Parents

Senior citizens running out of money is an unfortunate trend. Nearly half—49%—of Americans ages 55 to 66 have no retirement savings. And women tend to have less savings than men.1

That lack of savings may be leading to a growing number of elderly parents moving in with their adult children. Older Americans are less likely to live alone than they were decades ago, with some now living with their children.2 While living together may provide financial help for the elderly parents, it can add stress to the child-turned-caregiver and put the aging parents in a difficult situation, too.

And it's not just living expenses. “I’ve worked with a client who needed to help their parents with unforeseen expenses, such as medical bills from an unexpected illness, car transmission repair and home repairs that weren’t covered by insurance,” says Josh.

“With my own clients, I see more elderly people supporting younger family members than I do kids taking care of parents,” says Trey. “But there are seniors out there that could use help from loved ones, and they may keep their heads down and not want to be a burden.”

No matter what the situation is, Trey says the most important thing is communication within the family.

Help Elderly Parents Before the Money’s Gone

If you suspect that your aging parents are running out of money or making unwise financial decisions, don’t wait to step in. If you get involved before your parents have completely run out of money, you can help affect the eventual outcome.

Stepping in to assist your aging parents in better managing their finances won’t just help them; it may also help you protect your finances. That’s because many states have filial responsibility laws that legally require an adult child of an impoverished parent to pay for the parent’s necessities, including long-term care, as well as debts.3 (It’s always a good idea to seek the advice of an attorney or another qualified legal professional about your particular situation.)

When your parents reach this stage of life, it may fall on you to ensure they have what they need. “Many clients worry about how to manage the cost of their parents’ long-term care,” says Duo. “They may also worry about the time and effort it takes to watch over family finances.”

Helping your elderly parents manage their money could mean monitoring expenses more carefully so the cost of their retirement doesn’t cut into your future.

8 Tips for Helping Elderly Parents Manage Financial Decisions

1. Collaborate With Siblings

If you have siblings, get them involved in decision-making and providing financial help for your elderly parents. If two or more siblings are willing to help, you can offer more assistance to your parents, support each other throughout the process and hopefully avoid feelings of resentment.

“Some clients are concerned about who will be responsible for their parents if they are unable to provide care for them,” says Josh. Discussing your parents’ future care with siblings and other family members may help manage those concerns and expectations.

2. Have an Honest Conversation

It’s important to have tough conversations with your parents as they age. If the impact of their financial decisions is becoming a problem, sit down with your parents and siblings to discuss your parents’ financial situation and how you can help.

Be willing to listen to your parents’ input and preferences. For example, if they want to stay in their own home, you could set up a schedule for checking in and providing meals to avoid assisted living costs.

Also, be ready to discuss the reasons your aging parents ran out of money. Have they made poor financial decisions? Have they been victims of elder financial abuse or do their actions put them at risk of fraud? You may need to have this conversation with a professional financial advisor who can bring an objective influence.

3. Help Create a Budget to Avoid Poor Financial Decisions

To understand what resources your elderly parent has available, you need to grasp where their money goes. Do they spend a lot on items they don’t need? Are they helping other family members financially to their own detriment? Do they still have a gym membership even though they haven’t gone in years? Do they have several unread magazine subscriptions?

“In my experience, parents who make poor financial decisions are like everyone else: They tend to minimize or hide the truth until they can’t,” says Josh. “They may get defensive when help is offered and claim that everything is under control.”

Walk them through what you see and discuss what could be taken out and what must stay. They may struggle with the changes or restrictions, so check in periodically to help your parents stick with the plan.

Ready to Create a New Budget With Your Parents?

Knowing where the money goes provides a good foundation for the future. If your parents live on their own, start with calculating their needs, such as utilities, housing, medical insurance and care, as well as food. After that, look for ways to cut.

Download a full budget worksheet

4. Consider Meeting With a Financial Planner

“Bringing in an expert with an outside perspective may make sensitive money conversations go smoother,” says Trey. A qualified financial planner can help examine your parents’ finances and give some guidance.

Before hiring a planner, vet them first and verify if they are a fiduciary. Fiduciary advisors have a duty, or legal obligation, to act in your parents’ best interest. They should not try to sell your parents products that may not be appropriate. You’ll also want to ask how they charge—with a fixed fee only, on commission based on the investments they sell, or fee-based, which means they may charge a fixed fee and commissions.

Also, ask the advisor if they have worked with senior citizens who are running out of money.

It may be helpful for you to attend the initial meeting, depending on whether your parents are comfortable with it. Working with an advisor will cost money—consider looking into splitting the cost with your siblings, if possible.

5. Establish Financial Boundaries

More than half of adults (55%) believe they have a great deal or fair amount of responsibility to provide financial assistance to an elderly parent.4 While you may want to help your parents with groceries, housing and medical expenses, those costs can add up—and affect your ability to meet your own financial goals and your own retirement and estate planning needs.

Take a hard look at your own finances and determine an amount that you can be comfortable giving up to help your parents. Make a commitment not to provide more than that amount. Consider setting a timeline for when you will no longer be able to help or selecting some specific expenses you’re able to cover, rather than covering a wide variety of needs.

Make sure you continue to pay attention to your own financial needs even as you help your parents. “It can be a tough balancing act for those who are supporting aging parents as well as young children,” says Trey.

6. Understand and Consider Medicaid

While your parents likely have Medicare, the coverage doesn’t typically cover 100% of their medical expenses. If they can’t afford gap coverage and don’t have savings to support at-home care, they may consider Medicaid. This can be a compelling option if your parents live on their own.

What Is Medicaid?

Medicaid is a joint program by federal and state governments that helps with medical costs for people with limited income or resources. For those eligible, it can cover things not covered by Medicare.

The eligibility requirements and number of services available through Medicaid depend on the state your parents live in. By federal law, Medicaid will provide nursing care when they need full-time care. But some states also provide home- and community-based services through Medicaid. A daily check-in by a nurse may be more suitable for your parents than full-time care. This may give them that option.

7. Set Up a Power of Attorney for Financial Matters

Your parents may need someone to help formally handle their finances as they age. This can be vital in situations in which elderly parents don’t have many resources at their disposal.

Your parents can work with a lawyer to set up a power of attorney if that makes the most sense. This will allow you to make financial decisions on their behalf, which can be a benefit if your parents are struggling, or they want you to take over their finances directly.

8. Consult an Estate Planning Attorney

A comprehensive estate plan can help put your and your parents’ minds at ease about the future. The planning process will help your parents manage assets now and control how the assets are distributed.

The complexity of the estate plan depends on what they currently own and how they want their belongings handled. These estate planning documents are key:

  • A durable power of attorney

  • An advanced medical directive (living will)

  • A will or trust

  • A letter of instruction

“Many of our clients already have an estate plan, but they may need to update the plan to ensure it matches current needs,” says Duo.

Make Your Wishes Clear

Learn more about setting up an estate plan for yourself or your family.

Estate Planning Basics

The Impact of Elderly Parents Moving In With Adult Children

Having your parents move in with you to minimize their housing costs may be a solution. Multigenerational living is becoming more common as more families reach the same conclusion. If you reach that point, there are steps you can take to make the emotional and financial transition as painless as possible for both of you.

Before your parent moves in, consider setting house rules that everyone will abide by. Giving each family member a separate space, including separate kitchens and entrances, when possible, is key to having several generations live peacefully.5

After they move in, take steps to be sure your parents don’t continue making poor financial decisions. Do they buy their own food even though they eat with your family every night? Consider combining food costs. Take them with you to the grocery store and make sure they pick out a few things they want, but don’t needlessly spend money on food for the house.

Be Alert to Signs of Elder Financial Abuse

Older adults are a target for financial exploitation. Adults 60 and older reported losses of more than $1.6 billion in 2022 to scams, according to the Federal Trade Commission.6 The actual dollar figure lost is likely much higher as most frauds are not reported.

Financial abuse can take many forms, including pressure from a friend or family member to make uncharacteristic financial decisions. Knowing the warning signs—including confusion about a financial situation, unpaid bills or collection notices and unusual withdrawals or payments—can help you safeguard your elderly parent from falling victim.

Financial Resources and Community Support for Helping Parents

Once you’ve decided to help your aging parents, take advantage of additional available resources that can help. For example, some states offer payment for family caregivers through a Structured Family Caregiving program.

There are other government and nongovernment resources to consider as well. Aging and Disability Resource Centers can provide someone to meet with your parents and explain available services. If your parent is a veteran, the Department of Veteran Affairs has several long-term care services.

Also, search locally. Your community senior center likely has some resources available. Community centers may connect you with local services providing inexpensive meals to seniors. Many community organizations also offer low-cost or free group activities. Exercise classes, games, book clubs or even local outings can help keep your parents happy, healthy and engaged.

Take a Compassionate Approach

Talking with your parents about their finances, health and end-of-life wishes is uncomfortable for many. But understanding what they want puts you in a better position to help them as they age.

Beginning these conversations early can help you understand their resources and potential needs, say our consultants, instead of waiting for a crisis.


Financial Consultant Trey Byrd, CFP®
Trey Byrd, CFP®

Financial Consultant

Financial Consultant Josh Freeborn
Josh Freeborn

Financial Consultant

Financial Consultant Duo Tran, CFP®
Duo Tran, CFP®

Financial Consultant

Balancing Family and Finances

Helping family with their finances can impact your own. Let us help you plan.


Women More Likely Than Men to Have No Retirement Savings, U.S. Census Bureau, January 2022.


The Demographics of Multigenerational Households, Pew Research Center, March 2022.


What States Have Filial Responsibility?, December 2023.


Family Responsibilities, Pew Research Center, July 2023.


Living in a Multigenerational Home,, April 2023.


Federal Trade Commission Report on Protecting Older Adults from Fraud, Bureau of Consumer Protection, October 2023.

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.