Aging parents face unique challenges when it comes to their finances, making it important to talk about. Here are some tips on how to initiate these crucial conversations.
Let’s face it, older generations don’t like discussing their finances. But let’s be honest, nobody enjoys having their planning choices critiqued. That’s why it’s important, using the right approach, for adult children to initiate these crucial conversations with their parents. Failing to do so could result in costly misunderstandings or painful family rifts.
From wills to long-term care to emergency savings, the list of planning topics can get a bit lengthy. The advice below is designed to give you the tools and techniques to make these essential talks go smoothly from an emotional perspective.
Things To Consider
When To Have The Talks
Just like it’s never too early to start saving for retirement, it’s never too early to talk to your parents about their plans for the future and the resources they have or need to accomplish their goals. Unfortunately, many people in their advanced years will eventually experience some form of cognitive decline. Waiting for this talk could mean a more challenging time if one or both of your parents has diminished mental capacity.
While the potentially uncomfortable nature of this subject matter may make you want to rush through your checklist, try to avoid doing so. Instead, plan on it being a continuous process and break up the conversation into several smaller talks.
How To Start
If you anticipate a rough time getting your parents to discuss their financial preparedness, brainstorm a conversational entry point or two. If one or more of your parents follows the stock market closely, talking about recent market movements can flow into a discussion of how their retirement accounts are looking. If your parents enjoy going to the theatre, ask if they plan on continuing their ticket subscription in the years ahead. If they tell you they won’t, consider asking why.
Another strategy that can help set the right tone is to focus on your parents’ dreams for the years ahead. You’ll be talking with them about some pretty heavy stuff: money, infirmity, death. By expressing your desire to help your parents get what they want out of their golden years, you can make it easier to later deal with some of the thornier issues.
You probably know your parents well, and chances are you know which of your parents (if both are still living and involved) would be more open to starting the discussion. You might find it easier to casually introduce the topic with one of your parents first rather than calling a more formal family meeting. This initial outreach is also a good time to get a feel for which of your parents handles the finances and long-term planning. This is valuable information to store away; problems can arise if the parent who took care of the money passes away and the remaining parent is left to manage a set of accounts and policies they’re unfamiliar with.
Try to be open to the possibility that you may not be the best person to have this conversation with your parents. If you have siblings, consider whether one of them is the right person for this job. Given the crucial nature of this endeavor, it can be difficult to cede control, but if you and your parents don’t have communication styles that mesh well, forcing the issue can make your parents less likely to open up.
If you’re getting siblings involved, it might seem like a good idea to have a big family meeting to discuss retirement issues. Be careful, though. You don’t want to make your parents feel they’re being ganged up on. It’s usually better to start with as few people as possible and involve others after your parents develop a comfort level.
A technique financial coaches and counselors often use is to share a personal anecdote about a financial struggle they’ve experienced in their own life. They do this for a few reasons. First, it helps the person they’re speaking with understand that there’s no shame in encountering money hurdles because just about everyone goes through it. Second, this allows the person getting assistance to understand that the coach or counselor isn’t speaking from a place of judgment but instead is empathizing with what the person has experienced.
Why bring this up? You can use a similar approach when talking to your parents. If you want to get the ball rolling, pick a topic you want to discuss — like estate planning, for example — and let them know you’re trying to figure out the best way to handle this important task for yourself. Asking for advice lets your parents know you respect their wisdom and aren’t looking to demean them. This can also segue nicely into a discussion of how your parents feel about where they’re at with their arrangements.
You can also let your parents know that your financial planner wants to know the impact of your parents’ situation on you in the years ahead. Some parents may be more responsive and motivated to discuss these matters if it’s done in the context of ensuring a better and easier future for their children. Be careful to emphasize that you’re not asking these questions merely to size up your inheritance but instead are more concerned about a clear understanding of what lies ahead.
Make sure to read the room. If specific topics are making your parents uncomfortable, table them for now. Talking about the easier stuff first will help your parents feel more at ease with opening up. If it’s early in the process and you’re already pressing on the touchy topics, you could set yourself up for a stressful grind moving forward.
Be prepared to hear your parents out. There may be a lot of emotions stirring below the surface with these particular topics. Letting your parents get a few things off their chest before discussing specifics can build greater trust for the conversations ahead. If you show your parents you care about how they feel and that you aren’t just looking to interrogate them, it can help establish better lines of communication.
Don’t feel like you need to be an expert in all the areas you discuss with your parents. If the talks lead to your parents getting help from a financial planner or elder law attorney, that’s a beautiful outcome. If your parents are OK with it, you could also have your financial planner put a second set of eyes on your parents’ numbers and coverage.
If you typically only see your parents at family gatherings, like around the holidays, you might reason that it makes sense to have these discussions then. The potential problem is that these may be times of heightened stress for your folks. Even if there’s little pressure on your parents to plan the get-together, being around family members can be an emotionally charged time. The better option may be to sit down when there are fewer distractions.
Often, parents feel overwhelmed by one or more aspects of their planning responsibilities. Offering to lighten the load by partnering in or taking over one part of their duties can be a nice way forward if an impasse is reached. It can be challenging for parents to admit their lack of ability in a specific area, but if you approach gently and respectfully, you may just put a difficult piece of the puzzle firmly into place.
Remember, this whole process is about your parents handling things the way they want to. So resist the urge to steer the conversation toward how you want your parents to address matters. Instead, play the role of advocate for your parents’ wishes.
The above advice is designed to help you deal with some of the more intractable dynamics that can arise in talking with your parents. Please don’t let any of this talk of angst-filled moments discourage you. In many instances, parents are relieved to have help with these complex topics, and the process brings the whole family closer together.