It turns out that the parents of baby boomers – the silent generation – may still be living up to their name. Recent research reveals that only 28 percent of boomers’ parents say they regularly discuss money and finances with their family, and 41 percent feel they haven’t discussed their financial situation adequately with their children.1 So the responsibility may fall on boomers to approach their aging parents about money-related issues. Whether your parents are only a few years into retirement or more elderly these four questions are a good starting point for important financial conversations.
1. What do you want? If your parents are hesitant to open up about their finances, this may be a good place to begin. Ask them what they want and expect for the future – financially or in general. Gently inquire about the legacy they want to leave, including their wishes for their home, other property and valuable possessions, as well as any charitable causes they’d like to support. Your parents may be reluctant to discuss these things, and might not have even thought about some of them. Reassure them of the value in communicating now while both parties are still able.
2. Have you thought about long-term care? Perhaps the most important part of this conversation is understanding your parents’ wishes if they can no longer care for themselves physically. Begin by asking if they expect to live in an assisted living facility or nursing home, or if they hope to live with family under these circumstances. Be sure your own expectations and abilities are communicated if they choose the latter, or if you may need to pitch in financially to support their medical needs. Ensure you and your parents understand their health insurance and Medicaid benefits, and ask if they have any type of long-term care coverage.
3. What do I need know? Be sure you know where your parents store their important financial and legal documents and if they have a will or written power of attorney in place. Ask for contact information for any financial and legal professionals they’ve worked with along the way, and confirm you have the updated contact information for extended family members who you may need to reach in the future.
4. Is your retirement income still sufficient? It’s possible that your parents may be struggling to make their retirement savings last. They may have lived to be an older age than they expected when they retired, could be facing expensive health care bills, or their investments may have been affected by the recession. Being aware of their financial situation can help you both set expectations for the future.
Having these conversations with your aging parents can be difficult, but often the biggest challenge is approaching them in a way that encourages honest dialogue among multiple family members. Consider working with a financial professional who can help facilitate these and other conversations while keeping your overall financial plan and goals in mind.