Talking about money often doesn’t come naturally, and can be uncomfortable and unsettling for parents and adult children alike. But as parents age, there’s a need to ensure they are on solid financial footing. It’s also important to know what resources you might expect to inherit someday for your own planning purposes.
Fifty-four percent of adults admit that they would rather talk to their kids about sex than their parents about aging. The reasons for avoiding this money talk vary, but in general adult children don’t want to appear greedy or overbearing by asking mom and dad about their finances. Conversely, aging parents don’t want to admit that they may need help as their physical and emotional health inevitably declines. It seems no one wants to talk about death, dying or the financial realities that come with aging.
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“Starting it early so you don’t end up being faced with a crisis—that’s so critical,” says Jennifer Pline, head of wealth management at Cambridge Trust, a division of Cambridge Bancorp in Cambridge, Mass.
The price for this money silence is high. Fifty percent of nursing home expenses are being paid-out-of-pocket by families, with adult children contributing on average $10,000 a year to their parent’s care, according to the eldercare expert Barbara McVicker. The average lifetime cost of care for an Alzheimer’s patient is $174,000, and is estimated to grow by more than 400 percent by 2050. In other words, if your parent needs to be placed in a nursing home, the family would be responsible for $82,000 before factoring in inflation and the rate increases over time. That is a hefty penalty to pay for delaying a financial conversation because one or both of you might be a little uncomfortable.
You can avoid this fate and begin talking to your aging parents about finances today. Here are seven tips to help you begin the dialogue.
1: Identify and process your feelings before inviting your parent to talk
Talking to parents about their estate plans, financial situation, and healthcare wishes is emotional business. Before you invite them to discuss these matters, take time to process your own feelings. You may be annoyed, angry, frustrated, sad, or scared about their situation. Whatever your emotional state, know that it is normal and healthy to have a reaction to your parents aging. By processing these feelings up front, you are more likely to be calm during the actual dialogue.
2: Extend a loving invitation
Lead with loving intentions and let your parents know that you want to discuss their financial life because you care. Begin by saying something like, “I know this might be difficult for you to talk about, but I care enough about you to want to make sure you’re taken care of as you age. Can we find a time to discuss what plans you have made and how I might be able to help you in making sure everything is taken care of?” Remember you have been thinking about this conversation for a while, but this may be the first time your parent has considered this discussion. They may need a little time to process your request.
3: Ask during a quiet time
Finding a quiet time to ask your parents to engage in a financial dialogue with you is essential. Be certain to avoid busy holiday times or events where you are likely to be distracted. While you may want to talk today about money, remember your parent may need some time to adjust to the idea of breaking their money silence with you. Depending on your personality, waiting for a quiet time to invite them to engage in a money talk may be challenging. In this situation, patience does pay off.
4: Be specific about your concerns
When sharing your concerns with a parent, be specific. If you are worried that your mother has been the victim of a telephone scam, let her know that. Express your concern and ask permission to help. For example, say, “I am worried that you may have been taken advantage of financially. I would like to help you not get hurt like this again in the future. What do you think?” If you express loving concern and are specific about the cause of your worry, your parent is more likely to understand your actions and comply with your request.
5: Keep the conversations brief
Once your parent has agreed to a money talk, keep the conversation brief. You may have a million questions for Mom or Dad, but asking one or two questions at a time is better than bombarding your parent with inquires. While you may have been thinking about this money talk for months leading up to it, this is a new conversation for your parent. Give them time to digest what you are saying and respond. It is better to have three 30-minute talks than one 90-minute conversation. Not only does this keep everyone focused on one task or discussion item at a time, it helps everyone stay calm and rational.
6: Give your parent control whenever possible
A big part of aging is dealing with a loss of control over your physical and mental health. Elderly parents know that in time they will need more support, but they often don’t want to face this reality. When discussing how you can help them with financial matters, reassure them that this is not an attempt to take over their life, simply an offer to help them as they age. Whenever possible, invite your parent to decide what to address and when. By doing so, you are demonstrating that you are there to support them, not to take over.
7: Progress, not perfection
Talking about money with an aging parent is not a one-time event. It is a journey that requires time, energy, and a healthy dose of patience. Breaking money silence may be a new skill and with any new skill it takes time and practice. The goal is not to be perfect when discussing these emotional laden topics with your parents. It is to make progress one conversation at a time.
Use these tips to help you begin a financial dialogue with your aging parents. You may be surprised by their response. They may just say, “I am glad you finally asked.”