Use These Strategies to Avoid Financial Pitfalls as Your Parents Get Older
There are now more than 70 million Baby Boomers in the United States, and yet discussing money with your aging parents still isn’t something many people are prepared to do. It can be overwhelmingly uncomfortable to discuss these issues with older family members. In fact, a recent survey found that the majority of Americans—73%—haven’t yet had the financial conversations they need to with an aging parent. If you find yourself in this boat, read on for tips to help you approach the topic and facilitate the conversation.
There’s No Time Like the Present – Here’s Why
There are many reasons people prefer to avoid this conversation. Older people may not want to think about the final chapter of life or admit that they need help as their emotional and physical health takes a turn. Adult children may not want to seem needy or greedy by bringing up money matters. However, the price for silence is almost always higher than the cost of any embarrassment or stress incurred in tackling the matter head on.
Many older adults will need financial assistance as they get older, whether for day-to-day expenses, health care needs, or long-term medical assistance. According to eldercare expert Barbara McVicker, half of nursing home expenses are being paid out-of-pocket by families, with adult children paying $10,000 a year on average toward their parents’ care. That’s quite a price tag to have to handle unexpectedly.
In addition to the financial responsibility, there are also deeper emotional considerations to think through. Would you want to wait until a crisis occurs to have the necessary conversations, or would you rather discuss these important topics when everyone is healthy, calm, and stable? Unfortunately, long-term care decisions are made during a medical crisis, which means many people are forced to have this critical dialogue when they are already under a significant emotional burden.
To avoid these pitfalls, it’s paramount to talk about finances with your aging parents today, no matter how uncomfortable it may seem at first. Here’s how to get started.
Process, Then Talk to Your Parents
It will be hard to talk to your parents about their finances, healthcare wishes, and estate planning. Knowing that is key—as is preparing for it. Before you choose to engage with them, take the time you need to actively dig into your feelings on the subject. Are you scared? Are you aggravated? Are you angry or maybe feeling self-conscious? Whatever it is that you’re going through, remember that you’re entitled to your feelings. Processing them upfront means you can keep your cool during the conversation and be there for your parents if they are experiencing any difficult emotions.
Lead With Love
The best way to approach this conversation is with care and love. Your parents are more than the lifelong sum of their paychecks—they’re the core of your family. Let them know that’s why you’re sparking this discussion. Start by saying something that acknowledges the inherent discomfort of the topic, like: “I know this is a difficult thing to talk about, but I want to make sure you’re comfortable and taken care of in the years to come. I’d love to talk about what you have in mind and how I can help support you going forward.”
With that foundation of respect, you can start the conversation off on the right foot. Make sure to let them know that they don’t need to answer immediately. It’s ok if they need some time to collect their thoughts and process your request.
Be Specific, Be Helpful
It’s easy to feel like you want to help your parents with everything that’s going on, but being more specific can help you all find a clear path forward. If you’re concerned that your father has a money manager who may not be looking out for his best interests, let him know that’s at the heart of what you’re feeling. Say something like, “I’m concerned that how your money is being handled now may not set you up for the best possible future. I’d love to help you avoid that if I can. What do you think?”
Being specific means your parent is more likely to understand your concern and accept your help.
Be Brief, Be Respectful
However you find your way into the conversation, once all parties are ready to discuss the issues, make sure to set a time limit on your first discussion. It can be tempting to bombard your parents with a million questions and concerns, but put yourself in their shoes—they may not be ready to consider a lot of what’s on your mind. Whether these are new ideas for them, or they’ve come to the table with a solid plan, keeping the conversation short can help it stay on track.
If you need to continue to talk, schedule another 30-minute meeting at some point in the near future. It can help you all find meaningful solutions and help everyone feel comfortable and calm.
Try Not to Take Over
Sure, there are some situations in which a parent may need someone to take over their financial lives entirely. More often than not, though, aging parents still want to have as much control over their lives and futures as possible. They likely do understand that more support will be necessary at some point going forward, but completely relinquishing control of the finances they’ve spent a lifetime building can be a hard pill to swallow. Try not to take control. Invite your parents to make their own choices and be there to support them every step of the way.
Take it One Step at a Time
Talking to your parents about their finances is not a one-and-done situation. This is a long-term dialogue and a journey that requires patience, kindness, and hopefully a sense of humor. Focus on progress, not perfection. Working together on their financial future is a potentially new skill for all of you, and one that takes time and practice.
Final Thoughts on Discussing Money with Your Aging Parents
These tips should help you broach the subject and begin to have these important financial conversations with your parents. They’ll likely be glad for your support, and you’ll likely rest easier knowing you’re all moving forward with their finances together.
If you or your parents would like a professional opinion on the best strategy for your family’s financial future, schedule a call with us today. At Resolute, we focus on the personal aspect of financial advising. We get to know our clients and their goals, and we take an individualized approach to help families achieve their goals. We look forward to hearing from you!