Your Parents’ Money: A Guide to Financial Caregiving

Introduction

Dr. Chris Mullis, PhD, CFP®: What happens when your parents’ financial life needs an emergency landing and you become the financial caregiver? And what’s your special shield against inflation? The silent thief of your retirement income. And just in time for the holidays, the Hubble Space Telescope reveals a celestial snow angel with a rebellious alter ego.

Are you ready?

Welcome back to Retirement Isn’t Rocket Science. I’m your host, Dr. Chris Mullis, certified financial planner and former Rocket Scientist. My mission is to show you how to lower your taxes, strengthen your portfolio, and spend more with confidence so you can make your retirement even better.

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Plus, we share all the valuable resources, links, and even smart launches, steps you can take today to convert knowledge into action.

 In today’s show, we walk through what you need to know about the complex world of financial caregiving, so you can navigate this with confidence and loving care. New social security information came out this month, what to know about benefit changes, and we take a look at a devilish young star that is rebelling against its parent cloud.

Now let’s dive in.

Retirement Briefing Room

Welcome to the Retirement Briefing Room. This is where we huddle up to take a close look at key aspects of retirement. Spotlight important pathways of success and think about how to integrate these into your plans to make your retirement even better.

You’ve nailed your own retirement, but what happens when your parents’ financial life needs an emergency landing? Today we’re talking about the financial mission. You didn’t train for. Becoming your parents’ financial caregiver and how a lack of simple paperwork can turn a crisis into a catastrophe.

Our insights today come from a truly candid and powerful book entitled My Mother’s Money, a Guide to Financial Caregiving. Published just a few weeks ago by Beth Pinsker, a certified financial planner and personal finance journalist. This book, which grew Outta Beth’s powerful columns for MarketWatch, explores her deeply personal journey as a financial caregiver for her mother.

Beth is an expert in translating complex financial concepts into relatable real life action steps, and her experience shows that. Even for financially savvy families, the reality of caregiving highlights the critical difference between knowing what to do and having the legal authority and liquidity to do it.

Let’s set the stage. Many of you are what’s called the sandwich generation . You’re managing your own retirement goals, perhaps still supporting your adult children, and increasingly you’re responsible for your aging parents.

This isn’t just an anecdotal observation, it’s a demographic reality. The data are clear. 63 million people in the United States are currently caregivers. You have. A 70% chance of needing care yourself one day, and an increasingly high chance of providing it for someone else.

Beth’s story is the perfect mission, briefing for this challenge despite being a financial professional, she found herself in a real life crisis. Her mother was hospitalized, caregivers needed to be paid, and she couldn’t access or use her mother’s money. She literally sat there asking who signs the check?

This is the moment where theory crashes into reality

The first aspect that we want to focus on is the estate documents gap. These are your financial launch codes. The core takeaway here and the most critical step you can take right now is to address the estate documents gap for your parents. Beth notes that the national average is shocking.

70% of people don’t have a will, but the truly baffling statistic is that even among high net worth individuals, people who do have advisors. Many still lack the foundational legal tools necessary for a living crisis. We need to emphasize a will is only for after death. The documents you need to successfully launch a caregiving mission while your parents are alive are the following

Number one is the durable financial power of attorney, the POA. This grants you the legal authority to manage their bills, investments, and banking. Crucially, durable means it survives their incapacitation. Number two is the healthcare proxy or power of attorney, also known as a medical POA.

This allows you to make critical medical decisions if they can’t speak for themselves. Number three is the living will. This specifies their end of life wishes guiding the healthcare proxy.

If these documents aren’t properly executed and accessible, you can’t step in. You’ll be forced into a court for a guardianship or a conservatorship . This is an expensive, slow public and emotionally devastating process that strips away dignity.

Beth recounted the torture Her friend went through trying to get a POA accepted by six different banks. Of course, the banks were worried about fraud, which is understandable, but the result is massive friction. You need to prepare for this now by asking your parents. Where are these documents?

Do they name me as the agent? Are they easily shareable? You need to think about obtaining several notarized originals

The second aspect to Keyan is intergenerational planning, which is safeguarding your financial orbit

as diligent savers, your biggest risk here is financial contamination. If your parents’ nest egg is managed poorly or they run out of money. Your carefully planned retirement cash flow is the next source of funds. This could blow up your beautiful retirement projections that you so diligently have built.

Let’s go a level deeper here. Investments and income risk. Beth’s parents as teachers were very conservative and had most of their money in annuities. Products designed for steady income, but often with poor liquidity. When her mother needed cash fast for care, they couldn’t access it easily without surrender charges or massive administrative hurdles.

This is a critical lesson for your parents. Liquidity matters when care needs arise. If their assets are locked up, their need for cash falls directly onto you

And then there’s the widow’s financial shock. Another huge financial whopper Beth highlighted in her book was the impact of a spouse passing away on their Social Security income. When one spouse dies, the household income is reduced to just the higher of the two social security checks. You lose the smaller check entirely if your parents’ income plan.

Or your own relies on two full social security checks that income reduction can be 30 to 50% and is a massive blow to their financial orbit. The same risk applies to pensions where a chosen single life benefit means the surviving spouse is left with nothing. If you haven’t reviewed your parents or your own retirement income streams for this potential shock, make that a big priority now.

Finally, let’s talk about establishing mission control for financial caregiving. Being a financial caregiver is emotionally exhausting, dealing with the moral stress and sibling recriminations that Beth described, you have enough to handle on the medical and logistical side.

This is where you might consider partnering with a financial planner to help set up your independent mission control for your parents.

Let’s consider three important aspects here. Number one is tax management of complex assets. In Beth’s case, her father died leaving behind an annuity that was held inside an IRA. Managing inherited retirement accounts is a tax minefield. You have to follow specific required minimum distribution rules.

Those are RMDs and the distributions are generally taxable. In my retirement planning firm, we help manage the tax consequences of every dollar spent, whether it’s optimizing distributions from a taxable account, a Roth, or an inherited IRA to ensure care costs are paid in the most tax efficient way possible, if you suddenly inherit a large IRA as a non-spouse, you must know about the 10 year rule.

A second key component of that independent mission control is the neutral third party to aid in mollifying potential sibling conflict. The emotional weight of managing a parent’s money and the potential for fights with your siblings is very real.

You may have one sibling who lives nearby. Is the physical caregiver and another who lives far away but has more means an advisor can help act as that objective. Third party, we can help you propose a caregiving policy statement. Which is a financial agreement for the family to define responsibilities and if necessary, structure fair compensation for the sibling who is providing the bulk of the physical care. This ensures fairness and prevents resentment from destroying the family cohesion.

And the third and final component of mission control is the financial concierge services. Beth highlights that care concierges are a growing industry.

You can outsource the physical care, but you cannot outsource the ultimate decision making and signing authority. Financial planners like my firm can help identify trusted professionals from elder law attorneys to reputable daily money managers to build a financial support team around your parents.

Allowing you to focus on the emotional relationship and not the receipt bin.

Let’s bring all this together and summarize and prepare for action. The lesson from here is clear. If you are approaching retirement, you must look outward, not just inward. Your own retirement trajectory is only as strong as the weakest link in your family chain. The diligent work you’ve done building your nest egg deserves protection.

The simplest, most effective way to start this mission is to ask your parents about their legal documents, specifically the power of attorney. If they hesitate, explain that this isn’t about control. It’s about pre-authorization for an emergency landing.

It gives you the functional authority to protect them when they need you the most. Whatever you do, please don’t wait for a medical crisis to discover. You lack the legal authority to help. Estate planning for your parents isn’t for after they’re gone. It’s the emergency action plan for when your family needs mission control the most.

We greatly thank Beth Pinsker for sharing her family story and the powerful lessons she’s learned in walking this path. If you’re interested in learning more, there’s a link to my mother’s money. A Guide to Financial Caregiving in today’s show. Notes That you’ll find in our weekly newsletter.

The launch again, you can sign up for the launch at retirement isn’t rocket science.com. Now let’s head over to mission Control to answer your financial and retirement questions.

Ask Mission Control

Inflation is the silent thief of your retirement income. Today we’re talking social security’s special shield against it, the cola, which leads us to this week’s listener question, how much will my social security check go up in 2026, and how does this calculation actually work to keep my money buying what it used to?

That’s a fantastic question and one we get all the time, especially from our listeners who are either retired or launching into their next big chapter. You’ve worked hard and have been a diligent saver, and now you wanna make sure your guaranteed income. Social Security doesn’t lose altitude because of rising prices.

So let’s start with the hard number. The Social Security Administration has recently announced the Cost of Living Adjustment or COLA for 2026 will be 2.8%. For the average retired worker receiving a monthly benefit of $2,008, this translates to an increase of about $56 per month. It’s not a huge jump, but it’s a necessary adjustment to keep your financial position steady.

Think of the cola as the automatic thrusters on your rocket ship. Keeps your retirement spacecraft on a stable path, compensating for that relentless atmospheric drag of inflation

So how does that cola engine work? It’s surprisingly straightforward. The cola again, cost of living adjustment is the social security’s way of acknowledging that the cost of everything from your daily cup of coffee to your healthcare generally go up over time.

It’s an annual promise to maintain your purchasing power. First, let’s define the yardstick. The cost of living adjustment is calculated using a specific government measure of inflation called the Consumer Price Index for urban wage earners and clerical workers.

It’s known as CPI dash W. This index tracks price changes for a specific basket of goods and services. It’s the metric the Social Security Administration uses to gauge how much more expensive life has gotten. Now it’s measured in three month chunks. The Social Security Administration looks at the average CPIW for the third quarter of the year.

That’s July, August and September. So they look at the costs in those months of the current year. Then they compare that average to the third quarter average from last year. Now it’s an automatic boost. If prices have gone up, meaning the CPIW is higher, they calculate the percentage difference, which is then rounded to the nearest 10th of 1%. And again, for 2026, that difference was 2.8%. Good news, really good news. This is a completely automatic process. Congress does not have to vote on it.

It just happens, which is a big relief for retirees who need reliability.

So what’s this all mean for your plan? This 2.8% Cola has a few interesting financial implications. First from an income planning lens, this cola is a raise to your guaranteed inflation adjusted income stream. It helps reduce the pressure on your non-social security investment portfolio. If your social security benefit goes up, you may not need to withdraw as much from your IRA or your brokerage account to cover the same expenses. Helping those retirement funds last longer. Number two, from a tax planning lens, this is where things can get a bit complex. The downside is that your higher social security benefit is more likely to increase your provisional income.

If your provisional income crosses certain thresholds, a greater percentage of your social security benefit becomes subject to federal income tax up to 85%.

For many of our listeners, this is an annual tax management challenge. A good financial planner monitors closely, the third implication area is Medicare insurance.

The COLA is often where the rubber meets the road with Medicare Part B premiums By law, your Part B premium is deducted from your social security check. A Part B premium increase. Which is announced around the same time as cola each year can sometimes eat up a significant portion of your cost of living increase.

We always run those numbers as soon as they’re released to see the net effect on our client’s monthly cash flow. A certified financial planner, like our firm is essentially in that mission control aspect for you. We don’t just see the cost of living number, we plug it into your entire plan. We constantly adjust your tax efficient withdrawal strategy, looking at Roth conversions, harvesting capital gains, and structure your income to make sure that COLA is a net positive for your overall financial health .

So when you get your new benefit statement, don’t just look at the gross number. Look for your updated Medicare part B premium deduction. The difference is the real increase to your cashflow

wrapping this all up, the Social Security cost of living adjustment. The Social Security Cola is designed to be your constant copilot against inflation. It’s a key part of your financial orbit that you can rely on. But remember, the true value comes from integrating smoothly into your larger comprehensive retirement plan.

Thanks again to our thoughtful listener for submitting this very timely question. If you’ve got a question you’d like us to answer on the show, head over to retirement isn’t rocket science and click Ask a question. Or even better, you can skip to the front of the line by calling Mission Control at 7 0 4 2 3 4 6 5 5 0 and record your audio question.

Again, that’s 7 0 4 2 3 4 6 5 5 0. Now let’s broaden our perspective and explore another beautiful corner of our universe.

Retirement Big Picture

Welcome to the Retirement Big Picture part of our show. This is where we look up and look out to expand our appreciation and understanding of our amazing universe. Do you remember your rebellious teenage phase?

Maybe you revved your engine too loud in the driveway or played music that shook the walls much to your parents’ dismay. Well, it turns out stars go through a rebellious phase two and when a star that’s 15 times the mass of our sun throws a tantrum, the whole neighborhood feels it.

As many of you know, before I spent my days helping you navigate IRAs and brokerage accounts and tax planning and income planning and insurance, and all the beautiful dimensions of retirement planning, I spent my nights navigating Nebula and Neutron stars as an astrophysicist, and sometimes I just have to dust off the old telescope data and share something spectacular with you. Today we’re looking at a cosmic construction zone. NASA’s Hubble Space Telescope captured an absolutely stunning image of a region known as S 1 0 6.

Now, when we think of stars forming, we might imagine a gentle process. A cloud of gas slowly, quietly collapsing until poof, a star turns on. But folks, Starr is violent. It’s messy. It’s a lot like trying to build a portfolio without a plan. Chaos ensues

In the center of S 1 0 6 is a massive young star named IRS four. That’s infrared source number four, not the Internal Revenue Service. This kid is about 15 times heavier than our son, and it is deep in the final stages of its formation. It hasn’t quite settled down into the stable adult life just yet.

What we would call as astronomers, the main sequence right now, it’s still embedded in its parent cloud of gas and dust, and frankly, it’s rebelling against it. This young star is ejecting material at incredible speeds. Imagine taking a hose and turning it on full blast into a sandbox.

That material blasts outwards disrupting everything around it hub’s powerful Widefield Camera three captured the aftermath of this tantrum. The image shows a beautiful, intricate hourglass shape. Here’s the science behind that beauty. That massive young star is incredibly hot.

It heats the surrounding hydrogen gas to about 10,000 degrees Celsius. The star’s intense radiation causes that hydrogen to glow in the Hubble image. These glowing lobes of the hourglass look. A brilliant blue. But here’s the really interesting part, separating those two blue lobes, right at the waist of the hourglass is a thick, dark lane of dust that looks red in the image.

This dust lane is cooler. It’s so thick that it’s almost completely obscuring the star itself. From Hubble’s View, we can just barely see the young star peeking through the widest part of that dusty belt. It’s a reminder that even in space, you sometimes have to look past the immediate volatility to see what’s really driving the engine.

The star will eventually quiet down. Blow away the rest of the dust and settle into a long, stable existence

So let’s get a little background on this Celestial rebel. Where is it? S 1 0 6 is located in the Constellation. Nus, the wan. For those of you listening in the United States or anywhere in the Northern Hemisphere, NUS is the big cross shape flying down the Milky Way high overhead in the beautiful, warm summer months.

1. 1 0 6 is about a few thousand light years away. The cloud itself is pretty small by astronomical standards. Only about two light years across. That’s about half the distance from our sun to its nearest neighbor, Proxima Sari. So how to get his catchy name? It’s the 106th object cataloged by the astronomer named Stuart Sharpless back in the 1950s when he was mapping out regions of charged hydrogen and gas in our galaxy. Now, can you see it or not? If you have a professional grade telescope sitting in a university dome, absolutely. Ground-based astronomers, study it frequently. If you’re an amateur astronomer with a backyard telescope, it’s tough.

It’s not something you’ll see with a naked eye or binoculars with a decent sized amateur telescope and dark ski. You might see a faint, faint, small smudge that hints at that hourglass shape, but you won’t see the brilliant blues and reds that Hubble provided.

Let’s nerd out on this just a little bit deeper. We just talked about the Hubble image. Hubble is amazing, but it mostly sees in visible light. That’s the kind of light our eyes see. And Hubble just sees just a tad into the infrared. Remember that thick red dust lane I mentioned the one hiding the star of the center of the hourglass To Hubble, that dust is like a brick wall.

Hubble can see the glowing gas outside the dust. But not what’s happening inside it. Enter infrared vision. It’s designed to specifically look at heat radiation, which passes right through dust clouds, like they aren’t even there.

When we take an infrared image of S 1 0 6, the view changes completely in the Hubble image, the center is dark. In the infrared, the center is incredibly bright and pierces right through that dusty belt and revealed the massive young star IRS four in spectacular detail.

We can see the immediate vicinity of the star where those high speed jets of material are being launched, but the infrared revealed something else even more profound. Hubble showed us. The one big, loud teenager in the house, but the infrared image looked right through the dust and realized the house is full of toddlers too.

Infrared vision reveals dozens, perhaps hundreds of much smaller fainter stars and even failed stars known as brown dwarfs forming in that same cloud, which were previously totally hidden by the dust. It just goes to show whether you’re looking at a nebula or your retirement portfolio, having the right tools to see through the obscurity changes everything.

 Conclusion

You’ll find that stunning Hubble image of S 1 0 6, along with show notes and today’s featured book in our weekly newsletter. The launch sign up for the launch of retirement isn’t rocket science.com. So what’s your next step? Do you need to secure the legal authority to help your parents when they need you Most?

Have your parents created a concise go-to binder that houses their key financial and legal information, and have they establish cash liquidity, a dedicated, easily accessible liquid care reserve fund. I challenge you to take one idea from today’s show and put it into practice this week to help make your retirement and your parents’ retirement even better.

Thank you so much for joining me.

Until next time , I’m Dr. Chris reminding you your next mission is your greatest mission and retirement isn’t rocket science.

Credits

We thank the National Aeronautics and Space Administration for providing the radio communication between the space shuttle astronauts and the flight controllers.

Disclaimer

This show is for informational and entertainment purposes only. It is not specific tax, legal or investment advice. Before considering acting on anything you hear in this show, first consult your own tax, legal or financial advisor.