Clients Taking Unplanned, Early Or Additional Withdrawals From Retirement Accounts
Clients who pull money out of their retirement accounts to help pay for elder care can be a slipper slope, advisors say.
“It doesn't always come up in conversation, even when you ask, because the client may have thought another sibling would handle mom's or dad’s care or they thought it wasn't going to be as big a deal,” Chancey said. “The first time you find out caring for an aging parent is an issue is when you get a request [from a client] for some type of unplanned withdrawal.”
Instead of paying out cash, Johannessen advises gifting appreciated stock, especially when the elderly, needy parent is in a lower tax bracket. “This provides an adult child with the opportunity to both rebalance their own investment account portfolio at lesser cost than if selling and preserves cash for the pre-retiree that they will need to support their own lifestyle in retirement,” Johannessen said.