I'm 32 and my aging parents have asked me to take charge of their retirement funds — but I don't know the first thing about managing money. How should I handle this?

Understand what a safe asset allocation is for older workers

If your parents are nearing retirement, they’ve hopefully saved some money at this point. But it’s important to make sure their assets are allocated appropriately for their age.

If they’re within five years of retirement, it’s time to think about scaling back on stocks, which carry a lot of risk due to market volatility, and shift toward safer investments, such as bonds. Consider their risk tolerance and total income picture when deciding how to balance their portfolio.

You’ll also want to make sure your parents keep enough of their retirement savings in cash to provide cover in the event of a market downturn. And it’s an important thing to do even if a large chunk of their portfolio will be sitting in bonds. That cash also gives your parents access to money for financial emergencies that might arise in retirement, such as home repairs and surprise health-care bills.

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Discuss your parents' needs and goals

To help your parents manage their retirement funds, you need to understand what they want out of their golden years. Talk through their needs and goals. Do they want to travel a lot? Stay close to home enjoying their hobbies? Volunteer?

You should also work with your parents to figure out what their essential costs might amount to. Will they stay in their current home or downsize to one that’s less expensive? Will they be able to go from a two-car household to sharing a single car once there’s no longer a job to commute to? Run through these questions to get a good handle on whether they’ve saved enough, or whether they might need to delay retirement to ramp up on savings.

Find a great financial adviser

There’s no need to take on the task of managing your parents’ retirement funds alone when you could hire a financial adviser to help them along. This doesn’t mean you have to step out of the process completely. But it wouldn’t hurt to consult an adviser and get some recommendations.

Of course, this is a service you’ll pay for. Financial advisers commonly either charge an hourly fee or a fee that’s calculated as a small percentage of assets under management.

If you want to hire someone to continuously manage your parents’ money and choose investments for them, then the second option is what you’ll be looking at. The fee is typically around 1%, according to research by AdvisoryHQ. Otherwise, you might pay $120 to $300 per hour for an adviser’s time. A flat hourly fee structure may be worth it if you’re comfortable getting advice on how to invest your parents’ money and feel you can take it from there.

Either way, it's a good idea to find a financial adviser who's a fiduciary. A fiduciary has the obligation to put the needs of their clients ahead of their own. The fiduciary designation is meant to eliminate conflicts of interest. For example, an adviser recommending a less suitable investment to earn a larger commission.

The best way to determine if an adviser is a fiduciary is to ask. But also, check their credentials. The CPF (certified financial planner) certification is generally considered the gold standard, so it's one you'll want to look for.