7 Steps to Beginning a Financial Conversation with Your Aging Parents [A Series: Part 1]

Financial Conversations with Aging Parents

Whether or not your parents are financially prepared for retirement, discussing the future with your aging parents can help alleviate financial worry and uncertainty and improve financial wellness not only for you but also for your parents. Many people are completely unaware of their parents’ financial circumstances, wondering…

• “Do my parents have $5,000, $50,000, or $500,000 in their retirement?”

• “Does my mom have a plan for her long term care and the means to execute this plan?”

• “If my mapa were to die today, do they have a will? Where is or who has access to the will?”

Lack of financial transparency can lead to intense feelings of anxiety and uncertainty. Your parents may be worrying about money every day and avoiding the conversation as they do not want to feel like a burden. Meanwhile, you feel calm and confident that they have their finances under control. On the other hand, you may feel anxious about your single dad’s financial situation, while your dad has an excellent pension that you do not even know exists. It is impossible to know the truth of your parents’ financial situation until and unless you have a conversation about it.

Start Having Financial Conversations Today

It is never too early to start a financial conversation with your parents. While it may seem unnecessary or unusual to talk about finances and aging when your parents are 60 years old and pickle balling every day, this is actually the perfect time to start the conversation! Discussing finances before you need to or are forced to due to circumstances beyond your control will allow you and your parents to think more clearly and to collaborate more effectively. If you wait to discuss finances until your parent receives a cancer or Alzheimer’s diagnosis, the financial conversation will be fueled with feelings of fear, worry, grief, and urgency. While you and your parents will have a mixture of emotions throughout the conversation, one day you will all feel grateful and relieved that you had the conversation on your terms. If your parent is already older or has health complications, start the conversation as soon as possible - there is no time like the present! Remember…

• Oftentimes, the thought of having the conversation is far worse than the conversation itself.

The Intersection of Death and Money

Let’s take a moment to acknowledge why this conversation may feel so challenging and uncomfortable. When we talk about aging, planning for retirement, estate planning, and long-term care, we are ultimately talking about death and dying.

Your parent may be grappling with their own feelings of sadness, worry, and fear, as they confront their own aging. They may be worrying about running out of money or losing their identity in retirement. They may worry about how to maximize their time and money before their hearing starts to fade or they cannot walk. Talking about aging, death and dying is difficult to say the least. Add that to talking about money, financial wellness, and financial preparedness - who wouldn’t want to avoid this conversation! For many people, confronting and discussing these worries is much more difficult than avoiding them.

You may be experiencing similar feelings, as you notice your parent’s hand is shaking or they are struggling to get up from the couch. Unfortunately, in terms of your parents’ aging a lot is out of your control. However, engaging in a financial conversation is well within your means and can help to make aging more manageable.

7 Steps to Beginning a Financial Conversation with Your Aging Parents

1. Consult Your Partner

If you have a partner, start the process by checking in with them about initiating financial conversations with your aging parents and their aging parents. Your parents may have very different financial circumstances than your partner’s parents. Therefore, it is important to have this conversation with both sets of parents, so you can make the most informed decisions moving forward. Discuss and brainstorm ways in which each of you would like to support your parents as they age. Ask your partner…

• "How do you feel about having a financial conversation with our parents?”

  • “What concerns or worries do you have about the conversation?”

  • “How can I support you leading up to, during, and after the conversation?”

• “How do we envision financially and physically being a part of our parents’ lives as they age?”

  • “Would you like to live close enough to your parents to be able to drive them to doctor appointments?”

  • “Would you like your parents to live with us?”

2. Consult Your Siblings

Your siblings (and their partners) are another factor in the financial equation and conversation. The conversation you start with your siblings about finances and aging will be ongoing (possibly spanning decades), as it is likely that you and your siblings will one day need to work together logistically and financially to ensure that your parents are cared for throughout their lives. Talking with your siblings before talking with your parents is an important step as they can provide you support in having the conversation. They may ask to participate in the conversation or offer insights into approaching the conversation. Your siblings may or may not have thought about your aging parents’ finances yet. To start the conversation with your siblings,

• Ask…

  • “How do you and your partner imagine being involved with our parents physically and financially as they age?”

• Assess…

  • What are everyone’s strengths?

    • Some people love spreadsheets - this will prove very helpful!

    • Some people have flexible work schedules - this will also prove very helpful!

3. Setting the Stage

Setting the stage for a financial conversation is like making a first impression - it is so important to how the conversation will be received. Calling your parents while they are with friends on a Saturday evening is probably not the best time to start a financial conversation. You know your parents best, so consider different times, locations and situations that they would be most receptive to having this conversation. Also, remember that there is never a perfect time or place for anything, so be thoughtful yet do not wait for the perfect time or place or you will never have the conversation. Ask yourself (and your sibling)...

• “Would our parents be more receptive to this conversation…

  • In the morning or the evening?”

  • On a Tuesday or a Saturday?”

  • Around the holidays or during the summer?”

  • In a coffee shop or at home?”

  • In person, over the phone, or via email?”

  • As a whole family or just with one of us?”

Also, consider setting a (mental or explicit) time limit on the conversation in the event that people begin to feel overwhelmed. You can always continue the conversation later!

4. Determine the Purpose and Goal of the Conversation

There are many possible purposes or goals for an initial financial conversation. Consider the following common purposes and goals.

Information Gathering

One purpose or goal for an initial financial conversation with your parents is to gather information. Instead of delving into everyone’s feelings, you can discuss details and logistics. Ask your parents…

• “If something were to happen to one of you tomorrow, does the other know the financial accounts that exist as well as usernames and passwords for these accounts? If something were to happen to both of you tomorrow, where could Adrian and I find this information?”

• “At what age do you plan to start receiving social security? Do you have any idea how much you will receive in social security?”

Information Sharing

Perhaps the purpose or goal of the conversation is to help alleviate some of your parents’ financial anxiety by informing them that you have been financially planning for their retirement. Share with them…

• “We would love for you to live with us in the future.”

• “We do not want finances to be an added stressor as you age, so we are also setting aside some money to help you in the event you need it.”

Identifying Areas of Growth and Exploration

You by no means need to have extensive financial knowledge to initiate a financial conversation with your parents. You and your parents may be learning together. Identify areas of financial growth and exploration and incorporate your parents…

• “I have been thinking about creating a will. Do you know much about wills? Let’s learn more about wills together.”

• “I am reading Taking Stock: A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life by Jordan Grumet, MD to learn more about financial power of attorneys. Do you want to read it with me?”

5. Financial Ice Breakers

Sometimes, breaking the ice can be the most challenging part of the conversation. Once the conversation gets started, it will flow naturally, and you can segway into other areas. As you create your own financial ice breakers, notice that these conversation starters are in no way judgmental, accusatory or presumptive.

• “I have recently started seeing a financial therapist, and I wanted to talk with you about your current financial situation, as I am completely unaware of it.”

• “My sisters and I were talking about your upcoming retirement, and we were wondering about your financial plan.”

• “I read an interesting article about long term care coverage. Do you have long term care coverage?” 

• “Watching you take care of Lita and Pops has me thinking about the future and your financial situation. I would love to have some of these conversations now instead of later.”

• “I know that you really do not like talking about money, and talking about finances is really important to me, because I want to make sure that you are taken care of throughout life. How can we have this conversation in a way that feels good to you?”

6. Seek Understanding, Withhold Judgement

If you have ever felt financial shame (or any shame for that matter), you know how terrible it feels. Try to give your parents the benefit of the doubt; they probably did the best that they could financially, as most people do. Remember, they too did not receive a formal financial education. Remember, intergenerational wealth and poverty exist. If your parents are not in a financially sound position, they probably already feel ashamed.

• Avoid…

  • Making assumptions. It is unlikely that you are fully aware of all the circumstances that shaped your parents’ financial beliefs and behaviors.

  • Questions such as “Aren’t you worried…” and “Don’t you think…”, as they are biased. Instead ask questions, such as “How do you feel?” and “What do you think?”.

• Say…

  • “I am not judging you. I just want us all to be on the same page, so we can work together on a plan for the future that feels good for everyone.”

Also, if you are upset with your parents for not being financially prepared for aging, consider working with a certified financial therapist.

7. Follow Up Financial Conversations

Remember that the first conversation is just that - the first conversation, opening the door to future conversations. You cannot and will not cover every question and concern that you have in the first conversation, so create a concrete plan to continue the discussion at a later date. Even if all of your questions were answered, schedule ongoing financial conversations with your parents as there will be constant changes in their financial circumstances as well as in their health and wellbeing.

• Set a timeline to ensure that the discussion will continue. Otherwise, the conversation can be easily overlooked, forgotten, or avoided.

• Create a specific action items that each person is responsible for addressing before your next conversation. These items will be your future financial ice breakers.

  • “Let’s check in again in October. Meanwhile, I will look into what is required to create a financial power of attorney. Mom and Mark will gather more information about Mark’s pension, and Maria will talk with her financial therapist about her financial anxiety about supporting Mom and Mark. ” →

  • “I looked into a power of attorney, and here is what I learned. Mom and Mark, what new information do you have about Mark’s pension?”

You Did It!

The first financial conversation you have with your aging parents could go better, worse or the same as expected. Regardless, you did it! Be proud of yourself for doing something difficult and important.

If the conversation goes worse than expected, do not let that deter you from having future financial conversations. Instead use the first conversation as a learning experience. Ask yourself…

• “What could I do differently next time?”

• “What supports (partner, friends, financial advisor, financial therapist, etc.) do I need to continue engaging in this conversation?”