Asking people to talk about their finances is rarely an easy task, and, unfortunately, it’s not made any easier even when it’s your parents. However, it’s a necessary step as they grow older and you begin to take on a larger role in their personal lives. So, what can you do to make the “talk” easier? Following, find some tips to help talking with your parents about money issues easier.
Look At It From Their Point of View
While the general thought is that baby boomers are more open to talk about finances and money, it’s a highly individual thing. Someone here in Texas might not be as open to discussing their savings plans as someone in California. So, when talking with your mom or dad, be cognizant of their generations, and upbringing. These could be different from your own and being aware of where they’re coming from is a great way to get started.
Who Should Talk To Them?
Whether you’re considering senior living options or a power of attorney, if you have siblings, think about the family dynamics and consider who would be best to talk with your parents. Or, should all of you have a joint conversation so everyone is on the same page? While some parents may prefer to talk to the oldest child or the child who lives closest to them, they may prefer to talk to the child they see as being the best with money.
- Financial accounts held individually or jointly
- Location of pertinent paperwork
- End-of-life requests
Having this information will provide peace of mind to you and them that you’re doing what they want and that you have their best interests at heart.
What’s on THEIR Mind?
It’s important to find out what is most important to your parents as you go into this talk. If it’s important to them, they’re far more likely to be willing to discuss the matter. Maybe they’re worried about eventual dementia. This is a common worry in those whose parents suffered from it. If this is the case, you can discuss the benefits of a memory care community and discuss the costs and benefits of local homes. It’s all very theoretical at this point, but assure them you’ll look into the various options in your city. Then, be sure to do it and follow up with them.
Talk to your parents about how the care of their own parents was handled if that’s the way they’d like things to be handled in their situation. This is also a good segue into information about their health and history. Make note of their daily activities and find out if they need help with that currently or could see themselves needing help with day-to-day activities in the future. Discuss assisted living options and how that may be an answer to keep their independence if that’s important to them.
How to Pay for Their Preferences
Once you have a handle on the type of care your parents want for the future, look into their financial resources to pay for this care. Here, you’ll go into their insurance plans, savings, stocks, IRAs and other financial products. By having discussed first with them what is most important to them regarding their care, it should then be easy to transition to talks about their finances. Now is a good time to discuss:
- If they have a financial advisor and who it is
- Retirement or investment accounts. Pensions/401Ks
- Life Insurance policies or long-term care plans
- Is there a will and if so, where is it?
- Power of attorney?
As you wrap up your conversation, ascertain if your parents expect you to pay for their care or if they need it in the first place. Know ahead of time what you can offer in assistance (as well as that of your siblings). It’s better to know now what their expectation is so you can prepare for that in the coming years. Planning now will avoid regrets down the road and avoid indecision when the time comes to make bigger decisions. Go in with a strategy and work together with your parents to plan the best plan for the future.