Talking Money With Your Aging Parents
There’s a good chance you will have to get involved with your parents’ finances as they age. One in four adults say their parents rely on them for financial support.1 Your parents might need help managing their money or could rely on you for financial support if their retirement savings fall short. Regardless of the situation, being prepared for these conversations is crucial to avoiding potential challenges. The tips below can help you gain peace of mind and help ensure you’re equipped to assist with their financial matters if necessary.
1. Be Prepared for ‘The Talk’
Before bringing up the conversation, be prepared. Just like going into any meeting, you don’t want to ‘wing it’. Share ideas with siblings or a trusted source about what questions you would like to ask. Questions might include: Do your parents have a will and a power of attorney? If so, where are the documents located? What are their wishes for the future? Where would they like to live if they are not able to care for themselves? Do they have Long Term Care insurance? What are their preferences for end-of-life care?
2. Start the Conversation Early
Asking your parents about their plans for retirement can be a fantastic conversation starter. This is an easy question to get them talking more than if you just asked about their finances. Don’t put off discussing these matters: the earlier you bring it up, the easier it will be to step in when they do need assistance.
3. Keep Calm & Carry On
Talking about money with aging parents is not a one-time event. The goal is to make progress one conversation at a time, so that it becomes more normal. Your parents may prefer to postpone discussions until they’ve had time to acknowledge their new needs as they age. Don't be surprised if you meet resistance – it might be hard for your parents to accept needing help in this area. Start with simple suggestions to help them understand your ability to assist them as they age.
4. Plan For Your Future
After you determine what your parent’s financial future holds, you will need to decide what you can contribute. Do your parents plan to move in with you? You will need to discuss this with your significant other. Are they looking to you for financial support? This is not uncommon as 56% of adults feel financial strain because of financial support that they provide to their parents1. Be proactive and communicate with them about the support you’re able to provide.
5. Educate your parents on potential financial scams
Talk with your parents about how to take precautions against potential scams targeting seniors. In 2023, the FBI's Internet Crime Complaint Center reported approximately $3.4 billion of financial losses were to victims over the age of 60.2 If they’re not already familiar with today's phishing tactics, explain how to spot them. Make sure they understand to never give out personal information when they receive unsolicited phone calls or emails, even if it appears to be from a “family member”.
6. Include the whole family
Often, important financial discussions between parents and adult children happen one-on-one, rather than as a family. This can create potential problems down the road. Have conversations on issues such as care and estate plans together so that tension doesn’t build due to lack of communication and understanding between family members. The best way to avoid any hard feelings is to make sure everyone is included in the conversation.
7. Create a ‘Legacy Box’
A Legacy Box is a great way to keep all your important information in one place! Take time to ensure everything you need is in the box and update it regularly. We’ve included a suggested checklist of documents to maintain in the Legacy Box on the following page.
Sources: 1https://aginginplace.org/finance-legal/talk-to-parents-about-finances/
https://www.schwab.com/learn/story/5-tips-talking-to-aging-parents-about-their-finances
2"Elder Fraud Report," FBI's Internet Crime Complaint Center, 2023, https://www.ic3.gov/Media/PDF/AnnualReport/2023_IC3ElderFraudReport.pdf
Legacy Box Check List
- Will and Estate Plans (make sure documents are “in force”)
- Financial Account Information
- Include Account Names, Numbers and Account Balances
- Important Contact Information
- Financial Advisor: _______________________________
- Estate Attorney: ________________________________
- Primary Doctor: ________________________________
- Emergency Contact: __________________________
- Power of Attorney: ___________________________
- Funeral Instructions
- Medical information
- Include providers, medications, blood type, vaccination record, health conditions, surgeries, hospitalizations, allergies, and family medical history Insurance Policy Numbers and Account Holders
- Car: _________________________________________________
- Medical: _____________________________________________
- Life: _________________________________________________
- Type: _____________________________
- Amount: __________________________
- Beneficiary:_______________________
- Disability: ___________________________________________
- Long Term Care: _____________________________________
- Other: _______________________________________________
- Important Documents
- Include Deeds, Titles, Marriage and Birth Certificates, Social Security Cards & Passports
- Past Tax Returns
- Monthly Budget
- Debts & Bills Owed
- Passwords
- Include all passwords, pins, and combinations, security questions / answers List of Personal Belongings and Where to Find Them
- Letters to Loved Ones
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