How to talk to your aging parents about finances
It's important for adult children to talk to aging parents about finances in a careful and respectful manner.

November 3, 2021

Matt Cookson

illustration of son on how to talk to aging parents about finances

The child-parent relationship that we all go through with finances truly is a lifelong journey. We start with utter dependence to varying degrees of financial assistance that could stop as a teenager or it may continue for decades in some form through homeownership assistance and college funds for the grandkids. In many cases, it then flips back to having our aging parents benefit from financial information sharing and guidance and even some management from their children. Many aging parents may not recognize they have needs in this area, making this a tricky and challenging tipping point for family members to talk to aging parents about finances.

Studies show that these financial conversations are hard for many. According to a survey by GoBankingRates, 73% of adult children have not had detailed discussions with their parents about their finances. Yet, as we live longer, it’s the children that may have to take over some level of financial responsibility for their aging parents at some point. This can quickly get accelerated if there is an accident, disability or loss of cognitive ability due to early onset of memory loss, Alzheimer’s or dementia.

Starting the conversation

If the subject of parental finances has been taboo in your family, there is pre-work for starting the conversation. When multiple siblings are involved, they should discuss who might be best suited for this role. Factors such as parent-child dynamics, trust, proximity and financial literacy need to be considered. For the actual conversation, plan out how and where to start it. This should be a one-on-one (or two, if both parents are involved) discussion, not a group discussion with all siblings.

As a small business owner and a numbers guy, I was the obvious choice in my family for my mother, who was widowed at a young age. Instead of launching into a deeper discussion on her finances, I focused the conversation on inquiring about her retirement plans. This was an area of pride for her, starting a career later in life and working (and saving through a 401k) well into her 70’s.

This ice-breaking conversation was easy to have and to build on. This conversation was the start of a four-year journey that included reviewing finances to determine retirement options, developing budgets and eventually gaining the trust that led to a decision to grant me Power of Attorney. Even though this took four years, it was a step-by-step process with a receptive parent that occurred naturally, was not planned and had no urgency behind it at the time. This is not often the case.

According to Home Instead Senior Care when discussing aging and end-of-life planning, under a third of families reported having satisfactory conversations. More than two-thirds reported that these conversations did not happen until there was a health crisis or critical emergency. Once you’ve determined who will start this conversation and where and when it will take place, consider the following as well:

  • Use storytelling – talk about a friend or colleague who is going through some challenges with an aging parent.
  • Find a non-controversial conversation starter question. I chose retirement investments, but online banking, bill paying or “have you seen the newest banking app that scans checks” might get a conversation going.
  • Talk about something you did recently with your own finances – created a budget, met with an advisor or changed your 401k contributions.
  • Note how little paper and mail you get yourself with the popularity of online billing and the convenience it provides.

Continuing the conversation

If the first conversation is met with avoidance or worse, don’t worry. For many, making progress on this sensitive topic can take years. Be sensitive about not pushing too hard but don’t fall back into a procrastination mode. We’ve all heard horror stories of aging parents suddenly needing specialized care and the struggles their children face trying to access key healthcare and financial information to ensure they are properly cared for.

As the door opens, consider asking about how your parents file their financial information, where they store documents, and what concerns they may have about using more online services. This discovery phase could lead to a discussion about wills – do they have them, are they current, were they issued in the state where they currently live? If you have a will yourself, address it as a concerned parent yourself that wants to make it easy for whoever is an heir to know key directives.

It’s not about money, it’s about helping

Done carefully and respectfully, these conversations will lead to deeper ones about using a greater understanding of your parent’s financial process and philosophy to help them plan for the future. There are many steps required to put a family member in a position where they can truly help an aging loved one navigate difficult financial decisions. Having the initial conversation may be the hardest but is often the most important. Putting it off helps no one. Perhaps – like me – it will be positively received and put you on a path of being prepared to become a financial caregiver.

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