If you’re wondering how to talk to your ageing parents about finances, you’re not alone. Research commissioned by Lloyds Bank has found that over 50% of Brits have a hard time talking about finances. For many, money is more taboo than sex, religion and politics.
And while money is a difficult subject to approach at any time, it becomes even more difficult when it involves ageing relatives. As uncomfortable as it might be, however, don’t put off talking to your parents about their finances. Approached properly, it’s a conversation that can be productive and liberating.
Why it’s important to talk about finances
As your parents age, it becomes essential to understand what they’re doing with their money and how you can help.
If you don’t have this conversation, you could be left with a lot of stressful planning after they’re gone or if they suddenly go through a health crisis. Understanding their wishes and need now, when they’re in good health, will take the pressure off for everybody.
In addition to discussing money plans, it’s important to also know where important documents (wills, insurance policies, birth certificates, etc.) are stored. You’ll also want to understand their mortgage situation and what they owe.
At a minimum, you should have a list of the contact information for their life insurance provider so you can get in touch to develop a strategy for care if something happens to them.
How to approach ageing parents about their finances
1. Timing is everything
Talks about finances can get long and complicated, so don’t start a chat during a dinner party or when one parent has popped in for a cup of tea. Instead, choose a time when both parents are present and you can get their full attention for a proper chat about retirement planning.
2. Decide in advance how you’ll approach the topic
Cornering your parents is not the right way to start the conversation. Instead, spend some time in advance preparing for the talk. You can bring up new laws or changes in retirement or benefits that might affect them as a way to break the ice. Or use somebody else’s experience to bring context to the topic before you start talking.
3. Focus on positive solutions
When talking to your ageing parents about finances, focus on their vision for the future. You’re not there to solve things for them, but to partner with them to plan their future. Are they hoping to travel? Do they plan to downsize their home? Do they want to move to a retirement community once they need assistance?
What to ask
How can I help?
Your parents might not feel comfortable sharing everything about their finances right away. But they might have questions or ask for suggestions. Or maybe the first discussion will just be a way to break the ice and ask open-ended questions.
Do you have a will set up?
If your parents don’t have a will, this is a good place to start. Help them set one up so they can be sure their assets will go where they want them to.
Your parents should also designate somebody as their ‘health care proxy’ – a person who can make health care decisions for them when they’re no longer able. Having a lawyer on their side is also vital. A professional can help with paperwork, offer legal advice and help them assess critical issues.
Do you need help with any financial tasks?
You can take the first step by offering to help them with their current money management. Maybe they need help setting up automatic payments or finding an app to keep track of their net worth.
Helping them feel empowered about their finances is a good first step that builds trust. You might find that they come back to you on their own with more that they want to talk about.
