The elderly can count on daily money managers

PERSONAL FINANCE

July 16, 2006|By EILEEN AMBROSE | EILEEN AMBROSE,SUN COLUMNIST

For most of his life, 88-year-old John R. McLean handled the mundane financial chores on his own.

But McLean never learned to type. So several years ago, he hired a daily money manager to come to his Washington home twice a month to enter his transactions into Quicken, so he could track his finances on the computer.

Gradually, the money manager took on more tasks. She files paperwork, tracks expenses and helps pay bills for McLean and his wife, Julie. "You get to the point that you get more work than you want to do really, and you can't really keep up with it all if you're going to do a top-notch job," says McLean, who retired from the Army in 1970. "Why not get someone else to help you out? That was the best thing I've done."

Daily money managers have been around for years and aren't used just by retirees. They often help small-business owners and busy young professionals as well. But the demand for their services is expected to increase as retiree rolls grow.

Retirees are living longer, healthier lives. While they might remain independent for many years, they might need assistance with balancing a checkbook, paying bills on time to avoid late fees or tracking medical insurance claims.

Some have children who can step in to help, but retirees often like their financial privacy. "People don't want their kids to know what they make," says Christal Batey, a community resource advocate for the city of Greenbelt, in Prince George's County.

Adult children might be unable or unwilling to assist. They might be busy with their careers or live too far away to help parents. They often don't want to pry into parents' finances. Sometimes when they do intervene, it's only after a crisis, such as a parent's utilities being cut off for nonpayment.

Hiring a daily money manager might not be for everyone, but it can be the answer for some older parents and their children.

McLean says that when he hired the daily money manager, his three children were busy with their jobs, and only one lived nearby. "They felt that she was helping me, which in turn takes a little reverse pressure off them," he says.

Trust is key

If you're thinking of hiring a daily money manager, here are some considerations:

Finding someone trustworthy is paramount. There is no certification or licensing requirement to be a daily money manager. That means consumers must do their homework.

Estate lawyers, accountants or agencies dealing with the elderly can be sources of referrals, experts say. The trade group, the American Association of Daily Money Managers, has more than 500 members, who pledge to follow a code of ethics, and posts contact information by state online at www.aadmm.com.

Interview daily money managers before hiring one. Find out the rates. Fees typically range from $35 to $100 an hour, according to the trade group. On top of that, a money manager might charge for travel time or other expenses incurred on a client's behalf.

"Ask what their background is. Are they bonded or fully insured?" says Lisa Berlin, a daily money manager in Columbia. "Ask for references."

Then ask those references how long they worked with the money manager and about the services provided, Berlin says.

Also, contact your state attorney general's office to see if complaints have been lodged against a manager. Marylanders can call 410-528-8662.

Beware of anyone calling out of the blue and offering to help pay your bills, says Marcia Turner, president of the AADMM and a daily money manager in Connecticut. Avoid money managers who refuse to work with other professionals in your life, such as your accountant, she says.

In some cases, daily money managers will assume power of attorney when clients want them to have greater control of the finances. But retirees should never sign over this power lightly.

"If you give someone power of attorney, you are giving them the full range to be able to empty your account, sell your house. ... I don't recommend a client do that easily," Turner says.

AARP program

Those who can't afford a daily money manager might be eligible for AARP's Money Management Program, which offers similar services for free to lower-income households. Information is available at www.aarpmmp.org.

Greenbelt launched a money management program with AARP in November. It's open to city residents age 60 and older and with assets of up to $30,000, excluding a home, says Greenbelt's Batey. The city conducts background checks on volunteer money managers and reviews their work quarterly, she says.

Online banking, automatic deposits of checks and automatic bill paying are other inexpensive options for retirees wanting to streamline finances. With automatic bill paying, retirees need to watch their account balance so they won't be charged high fees if they are overdrawn.

No matter how finances will be handled, experts agree that older retirees and their children need to talk about it.

McLean's daughter, Mary, recently retired and lives near her parents. She says she and her siblings have been thrilled that the daily money manager frees up her parents' time.

"It allows us to interact on more fun and personal things," she says. "We can spend time together, and not on paperwork."

eileen.ambrose@baltsun.com

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