Are you part of the one third of Americans who are providing financial assistance to your parents? Here's how to do it without wrecking your own savings—or your financial future.

One-third of Americans between the ages of 40 and 64 are providing financial assistance to a parent. Another quarter plan to be doing so in the future, according to an AARP research survey. 

"It is an interesting time when roles begin to reverse and the parent needs the emotional, financial, or daily support from the adult child," says Martha Sullivan, founder of management consultancy Provenance Hill Consulting. "It is a challenging transition for all involved because of many factors, including emotions, independence, perceived roles, and the quality of our relationships."

You can provide financial assistance while also keeping your own finances on track in the process. Here's how.

Plan ahead.

"Have a candid conversation with your loved ones about their complete financial picture," recommends Scott Ford, president of U.S. Bank Wealth Management at Affluent. "Discussing finances with your parents or in-laws may be intimidating. But understanding their financial situation is vital to properly plan for possible expenses down the road."

Ford says knowledge is power when it comes to your parents' assets, insurance coverage, monthly expenditures, projected future expenses, monthly income from retirement accounts or social security, and housing changes or needs.

"Analyze current income streams to determine how long they will last, and for married couples, whether they will continue when one spouse passes away," says Matt King, a wealth planner in advanced financial planning at Wilmington Trust. "Examples of this may include pension plans with survivor benefits or annuities."

If you know you'll be helping a parent financially down the road, make a fund for doing so now. "Establish a specific, interest-bearing savings account," Ford says. "Analyze your budget and come up with a comfortable amount to automatically deposit into the account every month."

Help them slash and simplify costs.

Help your parents find ways to reduce their monthly expenses. Think big changes: Is a home downsize in order? But think smaller too: Can you add them to your cell phone plan and save cash? What other bills can you bundle? 

King also recommends finding ways to simplify day-to-day financial tasks. "Setting up automatic deposits for income they receive on an ongoing basis and automatic debit payments for recurring expenses, such as utility bills and credit card bills, can save time," he says. "You may also help them set up online bill payments so you can assist them with managing these payments and review transactions."

Add your parent as a dependent.

About 30 percent of people in the U.S. are feeling the squish of the "sandwich generation" as multigenerational caregivers, according to a Pew Research analysis. They have children younger than 18 and are also regularly caring for or providing financial assistance to an adult. If this is you, talk to your accountant about maximizing dependents and deductions on your taxes.

If you've already been supporting a parent financially, you may be able to claim them as a dependent. To do so, you must have paid more than half of their financial support needs for the year. And their gross income must be less than $4,300. The IRS lists additional rules and requirements.

Each dependent you claim, including children, on your taxes lowers your taxable income in the form of a tax credit. Claiming a parent may also allow you to deduct some expenses you pay to support them. If you itemize your taxes and you pay medical expenses that are more than 10 percent of your gross income, for example, you can deduct a limited amount. 

"To claim deductions for a dependent parent you must make those payments directly to the medical service provider, not reimburse your parent," King says.

Consider healthcare plans and premiums.

Anyone over 65 is eligible for Medicare. But only Medicare Part A is free in most situations. So you could support your aging loved one by paying their Part B premium and any supplemental policies or prescription drug coverage. Medicare Part B covers doctor's visits, preventive services, and more. 

If your parent isn't yet eligible for Medicare but they are low-income, they may qualify for Medicaid. But if Medicare or Medicaid aren't available, you can still help with health coverage.

If you've added your parent as a dependent on your taxes and you buy your health insurance through the Marketplace, you can include your parent on your policy. But be sure to check whether purchasing a separate policy for them and paying their premium is cheaper. 

Be wary of fraud.

Seniors are often the targets of financial fraud. So part of your helping out your parents may involve some vigilance to avoid theft that could further hamper their financial independence. 

"Meet with your parent's financial advisor or your advisor with your parent," recommends Molly Ward, an advisor at Equitable. "Establish monitoring of credit cards and bank accounts with text or email alerts to the adult child to ensure there is no financial fraud going on."

Guard your own financial health.

Of course, you want to help your parents as much as possible. That's admirable. But be careful of putting your own finances in serious peril in the process. Without financial stability, you'll be unable to help your loved one. 

No matter where you are at in the process, figure out what funds are off-limits. "Take steps to safeguard your retirement savings and maintain healthy financial boundaries," Ford says. And remember, assistance doesn't always have to come in the form of cash.