Sadly older people are ripe for the picking when it comes to scams, rip-offs and inappropriate selling of financial products. Just look at the numbers of older people caught out and often left financially destitute by Blue Chip's property schemes.
Those who start to suffer from dementia can be very easy pickings for the various companies that sell products by cold-calling or door knocking.
Perhaps even worse, older people than you'd like to believe are ripped-off by their carers or even their own family – a problem which vexes Age Concern. In an analysis of 231 cases of financial abuse, Age Concern found that sons or daughters comprised 37%, and husbands, wives or partners made up 16% of abusers.
As parents age the roles are sometimes reversed with the younger generation becoming responsible for their elders.
But simply stepping in and taking over isn't really an option. Plenty of people make financial decisions that you or I might think of as imprudent. That's their right. The issue needs to be handled delicately – perhaps with a family conference.
Age Concern advises getting older people to sign an enduring power of attorney whilst still of sound mind. This will allow the attorney – who may be a member of the family or a professional - to act for your parents when they become ill or feeble of mind.
Another huge problem for the next generation to grapple with is when your parents can no longer live alone. Fortunately there is a considerable amount of government assistance available for people to stay in their own homes - and much of it isn't means tested.
Sometimes retirement villages or nursing homes are the only option. Don't get me wrong. Modern retirement villages offer a great life-style. But they eat up nest eggs quick smart.
The biggest problem is that you're not "buying the property" you'll live in when you move into a retirement village. Instead you usually buy a "licence to occupy" and you also need to pay weekly service fees – which can eat up almost your entire government superannuation. When you die – or move to a hospital, the unit is refurbished at your cost and sold on – but you get none of the capital gain.
I once heard the business of running retirement villages as "farming the elderly". These units are truly awful investments – and more than a few families have been left feeling bitter when their older relatives pass on and their life savings have been eaten up.
This is a huge topic and one that affects most people eventually in their lives – either as the children of elderly parents, or those parents themselves.