How to talk to aging parents about health & wealth
By Dana Nightingale, CFA, CFP®
Don’t wait to talk to your aging parents about their financial wellbeing. This is one of the best pieces of advice I can offer, as both a financial adviser and adult child who’s “been there.”
In the world of financial planning, it’s called “30/60”: If you are in your 30s, or your parents are in their 60s, you should have this conversation. That’s because the time to have “the talk” is well before any health-related emergency happens. If your parents don’t already have a durable power of attorney, health care proxy, or other crucial legal documents in place, you could face a complex legal process to ensure their wishes are granted in the event of something like an Alzheimer’s diagnosis.
While caregiving and finances go hand in hand, many adult children have not yet had this discussion with their parents. The burden of family caregiving has also grown since the beginning of the pandemic, according to the National Alliance for Caregiving and AARP. (Source: https://www.aarp.org/ppi/info-2020/caregiving-in-the-united-states.html)
Many caregivers still have children at home, putting them in the difficult position of having to pay for summer camp, college, and swim lessons while also worrying about how a parent will afford long-term care while protecting their assets.
In my experience advising families, adult children often find themselves dealing with a couple of different scenarios, each of which has its own set of emotional and logistical challenges. In the first group are parents who need extra emotional and financial support. In the second are parents who are financially secure but might be reluctant to disclose their full situation, and who are focused on gifting efficiently while protecting their legacy. In both cases, the focus is still on caregiving.
Preparing for the talk with your parents
If you have siblings, try to make sure you’re on the same page. Coordinating with them may help reduce any resentment and ensure a better outcome. Have one person initiate the actual conversation to keep things simpler, but be sure to let your parents know that all of you are available to help as needed.
Cameron Huddleston, the author of “Mom and Dad, We Need to Talk,” advises finding the right environment to have this conversation, one in which your parents will feel more comfortable and relaxed enough to be open. The holidays, which can be a more stressful and emotional time of year for families, might not be the best place for this conversation, especially if they include extra people who shouldn’t be part of it.
Recognize that you will likely have more than one talk with your parents. With a topic this complex, there will likely be check-ins and follow-up conversations.
Make sure your parents are in the driver’s seat. While you’re there to offer help and support, remember that ultimately these choices are their decision.
Remember to keep the focus on your parents’ health – not any potential inheritance – and how you can support them. Here are some good ways to get the ball rolling:
- “Mom and Dad, have you given much thought to your retirement?”
- “Mom and Dad, you took such great care of me when I was younger. I want to be able to provide that same care if you need it. Can we talk about how I can help?”
- “Mom and Dad, I have been thinking about my retirement. I’d love to get your advice on how you planned ahead.”
- “If something were to happen to you, do you have a will or health care directive? Where can I find these?”
Keys to success
Though it may be difficult, don’t push. Some parents are not willing to talk, and that’s OK. Remember that your parents might have trouble opening up to you, their child. They might not feel comfortable being in a vulnerable position or want you to worry, especially if they’re not completely financially prepared for retirement or any health-related emergencies.
If that’s the case, you can still ask them if they’d feel more comfortable talking to someone else they trust, such as a clergy member, good friend, attorney, or financial adviser. Also ask if they’d consider putting pen to paper and writing down the things that you (or another trusted person) should know, such as where to find their will and other important legal documents, financial account details, and who to contact in case of a health-related crisis.
While these conversations can be hard, they’re an important part of protecting your parents and supporting their legacy.