How to Talk to Your Aging Parents About Finances

“When you start asking people to talk about their financial accounts, you have to work your way into it,” says Michelle Ash, CFP®, MSFS, RICP®, a senior wealth advisor at Mercer Advisors in Jacksonville, Florida. “The oldest generations tend to be very, very private about finances. Baby boomers are more open, generally speaking.”

Acknowledge that your parents’ generational and cultural viewpoints on discussing money could be different from yours. Being aware of their perspective is a good first step.

Consider easing into the process. This doesn’t need to be one long conversation; you can break up the discussion into smaller chats over time. Make the effort to understand where your parents are coming from to have the most effective conversation.

If you have siblings, consider whether one of you might be better suited to talk with your parents about their finances. Sometimes, parents are more comfortable speaking to their eldest child or to a child that they may perceive to be better at financial management.

Timing matters, too. Family dynamics can be more complicated around certain times of year. Pick a date that’s lower-stress and that gives you time to have an unhurried conversation. Give your parents the time they need to come to terms with the conversation.

Read more:Siblings Fighting Over Elderly Parents’ Care: 10 Common Problems and Solutions

Make your intentions clear. Let your parents know you want to talk about finances because you want to help them plan for the future or because you’re worried about their health.

Some elderly parents may have thought about their future and finances a lot. Others may not feel they need to plan at all. You won’t know unless you begin discussing what’s important to your parents, along with the financial assets available to help them.

“You can say, ‘My hope is we won’t need to use this information for a long time, but if you need help as you age, we want to be able to respect your wishes,’” Ash says.

Let our care assessment guide you

“Most people are far more interested to speak about what’s important to them and how they’re going to be cared for first,” Ash explains.

Ask about their experiences with caring for their own aging parents or grandparents. Do they envision a similar situation? How do they see themselves aging? Encourage them to share what an ideal aging process would be. Then ask if they have any concerns about achieving that vision.

This is also the time to discuss your aging parents’ current health status and family medical history. If they eventually need help managing activities of daily living (ADLs) or their health care, what form would that help ideally take? Have they had experiences with in-home care or senior living communities? What are their impressions?

Once you know your parents’ long-term wishes, research senior care costs. According to federal data, seniors turning 65 have a roughly 70% chance of needing long-term care.^[01] Depending on care needs and location, those costs can vary widely.

If they want to remain in their home, look at home care costs together. If they will need help with activities of daily living like bathing or dressing, assisted living is anothe option. Check out assisted living costs in their state. Are they experiencing some memory loss or concerned about a future dementia diagnosis? If so, you’ll want to look at memory care costs with your parents.

Read more:Paying for Long-Term Care

Now that you understand your parents’ preferences, available senior care options, and costs, it’s time to look into what financial resources they have.

“If you’ve started by talking about what’s important, it may be relatively easy to transition into asking your parents about their finances,” Ash notes.

You may want to ask these questions:

• Do you have a financial advisor? (Financial advisors often have clients sign a form that allows them to share financial information and specifies when and with whom it can be shared.)
• Do you have retirement or investment accounts?
• Do you have a pension?
• Do you have long-term care insurance?
• Where are your important legal documents? (An elder law attorney can help draft and update crucial documents.)
• Do you have a will or a trust?
• Do you have a power of attorney?

Talk with a Senior Living Advisor

Investigating ways to offset elder care costs before care is needed can offer peace of mind to aging parents and their families. For instance, if your parent is a veteran, learn about VA benefits for long-term care. If they own their home, a reverse mortgage can help fund aging in place, or renting the home can provide steady income to help pay for senior living. Sometimes, a life insurance policy can be used to free up cash for long-term care.

Some people’s goal is to spend their last dollar on their deathbed, Ash says. But if unexpected long-term care needs arise, that approach can leave few options — often requiring Medicaid or support from family, such as moving in with adult children.

Most older adults, however, hope to cover their own long-term care costs and avoid becoming a financial burden.

Still, it’s important to ask. If your parents do anticipate financial help, understanding that now gives you time to plan and set realistic expectations together.

“Of 300 client families, I’ve only had one say they want to go with ‘the Medicaid plan’ or move in with their kids,” Ash explains.

Read more:8 Questions to Consider Before Moving a Senior Parent Into Your Home

According to Ash, not making financial plans for long-term care needs is the most common mistake people make.

“Everyone needs to have a strategy,” she urges. “We’re all aging. Many, many people need help. Not everyone needs a solution that is top-of-the-line, but it’s far better to have a partial solution than no solution.”