What financial services pertain to seniors?

Financial services relate to the services of the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, accounting firms, consumer finance companies, stock brokerages, investment funds, and some government sponsored enterprises. With regard to seniors, the most pertinent financial services can be divided into two categories: financial planning and daily money management.

Search by State

What do financial planners do?

A financial planner is a professional consultant and advisor who prepares financial plans for individuals. A financial plan is a detailed strategy tailored to a senior’s specific situation and financial goals. The financial planner considers all questions, information, and advice as it impacts and is impacted by the entire financial and life situation of their client. In addition to providing advice, a personal financial planner can also help a senior citizen secure a wide variety of financial products, including investments and trusts.

How can financial planners help seniors?

A financial planner can help a senior prepare for a number of financial issues, such as:

  1. Retirement — Planning to help seniors ensure financial independence at retirement. The merits of a variety of financial products will be discussed, such as 401Ks and IRAs.
  2. Taxes — Planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes. A planner may recommend a tax preparer if their client doesn’t already have one.
  3. Estate — Planning for the creation, accumulation, conservation, and distribution of assets (home, possessions, financial assets, and other assets). One can plan for this distribution to occur while still living or after death.
  4. Risk management and insurance — Planning and managing cash flow risks through sound risk management and insurance techniques. This includes health insurance, long-term-care insurance, and other forms of insurance.
  5. Investments — Planning, creating, and managing financial capital accumulation to generate future capital and cash flows for reinvestment and retirement spending, including managing for risk-adjusted returns and inflation.
  6. Cash Flow and liability management — Maintaining and enhancing personal cash flows through debt and lifestyle management, by providing advice regarding how borrow and spend money.
  7. Education — Planning for the future education of children, grandchildren, and other family members. This includes setting aside money for college tuition and room and board in a saving plan, such as a 529 Plan.

What does a money manager do?

A money manager, sometimes called a daily money manager (DMM), helps a senior with their daily financial challenges, such as paying bills and filing important documents. The service allows seniors to enjoy their retirement knowing their financial matters are being handled. A DMM will take care of such tasks as:

  • Reconciling bank statements
  • Monitoring bank accounts and credit card activity
  • Organizing and paying monthly bills
  • Establishing budgets
  • Organizing and maintaining vital record

How can money managers help elders and their caregivers?

DMM programs can be valuable for older Americans who:

  1. Cannot keep track of bills and financial documents
  2. Often forget to pay bills
  3. Cannot write checks because of arthritis or other health problems
  4. Have trouble getting to the bank
  5. Can no longer manage money or finances
  6. Are susceptible to financial scams

Money manager services help seniors maintain their independence, while helping keep parent and child relationships strong and positive because such services remove the financial management burden from the children.

How DMM services are provided

Older Americans can obtain DMM services in a number of ways:

Through elder-assistance agencies

Often DMM services are provided through a larger umbrella organization, such as a private nonprofit elder assistance organization or government agency. These agencies often use volunteers to provide basic DMM tasks, such as bill paying. To find an elder assistance agency that provides DMM services, contact your local Area Agency on Aging (AAA). (You can find the AAA in your area by using the federal government's Eldercare Locator at www.eldercare.gov.)

Stand-alone nonprofit DMM programs

Some DMM programs are nonprofit organizations devoted to providing only DMM services. An example is the AARP’s Money Management Program, which uses volunteers to provide bill paying, budgeting, and other services to low-income elders. (To learn more about this program, visit the AARP Money Management Program website at www.aarpmmp.org.)

Professional For-Profit DMMs

In the past decade, an increasing number of individuals and private for-profit companies have started offering DMM services for a fee. Cost for these services varies by region, but is often between $25 and $100 per hour. According to one study, most clients need approximately four hours of services per month, but this varies according to the services needed and the complexity of the elder’s financial situation.