3 ways to prepare for looking after elderly parents

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Like many industrialised, Western nations, Australia currently has an ageing population. According to the Australian Bureau of Statistics, the country's population has been getting steadily older since the early 1970s, with the proportion of people aged over 65 jumping by 14 per cent between 1971 and 2011.

With pensioners constituting an increasingly bigger share of the Australian population, government support will be likely pushed to the brink in the future. It won't be surprising to see parents financially relying more and more on their children in the decades ahead - a burden that has a high chance of falling onto any young Australian today. Careful financial planning for this eventuality is therefore crucial.

Make a plan for yourself

Before you can start drawing up a budget for how to live within your means while helping your parents out, you'll have to plan for yourself, too. After all, the world hasn't stopped spinning just because your family needs your support. You still need to keep saving for retirement and keep up with the regular expenses and payments.

Ultimately, since your parents are relying on your finances, it's in everyone's best interest that you continually to be financially solvent.

Consider a superannuation strategy

It could be a smart move to start giving your parents money long before they've reached the pension age. They can then take these extra funds and turn them into after-tax contributions for their super.

What's advantageous about this superannuation strategy is the fact that these contributions aren't tax deductible. Keep in mind, however, that there is a cap for how much extra your parents will be able to contribute before they start getting taxed.

Work out the costs

Have you ever thought about how much you might have to pay to support an extra pair of mouths? Not only will you have to purchase more food, bills will likely go up, along with the various added day-to-day expenses.

Calculate these numbers so you have a good idea of how much you'll have to sacrifice. You might even find out that some extra spending is not only worth it, but feasible - remodelling your home, for example, to accommodate a greater number of people.