For some families, money can be a taboo, complicated or uncomfortable topic to bring up. But it’s also necessary to talk about, especially as your parents hit retirement age and beyond. The more you open that line of communication, the better prepared your family will be to approach changes and challenges as they come up.
Why talk about money at all?
Talking about finances as your parents get older might feel awkward, but it’s tremendously valuable. It means they will have someone in their corner to support their plans and goals, and understand what they truly need.
They might need help making medical decisions, selling their house, finding a retirement home to move into or managing their money without a regular income. If your parents involve you or other relatives in those conversations, it keeps everyone on the same page. It also means you can talk through these decisions together, and work through any roadblocks.
When to have money conversations with your parents
Timing is really important when you want to bring up a potentially sensitive topic to discuss. Avoid busy, hectic times when your parents might be more stressed than usual. (That means you should probably avoid talking about it over pumpkin pie at Thanksgiving.)
Choose a time when you won’t be interrupted, and make sure you’re somewhere where they would feel comfortable talking openly about their money.
If you have siblings or other relatives who want to help, don’t involve everyone at once. You don’t want a financial planning discussion to feel like an attack. Choose one person who you believe they would be most open to talking to to start the conversation.
How to start the conversation
Approach the subject casually. You could bring up your own retirement plans and ask them what theirs are, or how they approached their retirement plans. Then ask what other plans they have going forward.
Remember, your ultimate goal is to help your parents and make sure you understand their needs. So right off the bat, it’s important to listen and consider things from their perspective. Maybe they didn’t save as well as you think they should have, or they have some plans that you don’t agree with. That’s okay; you don’t need to rewrite their plans. The most important thing you can do at this point is to listen.
Once you get a clear understanding of their plan, you’ll be in a better position to work with them on any changes or improvements.
Get the facts
Make sure your parents have a completed estate plan in place. If not, getting one together should be a priority. That process will help them to sort out where they keep their money, and what the plan for it is.
You should also know who your parents would appoint as a power of attorney or health care proxy if they end up needing that kind of assistance.
Having those details will help clear up a lot of stress and uncertainty as your parents reach old age. As a bonus, talking to them will help you get clear about what plans you’ll need to put in place for your money, too.
If you are preparing to talk to your parents about their finances, here are some books and articles that might help you navigate your discussions:
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and fee-only financial planning. For more information on the services offered, contact Katie today.