How to Talk to Your Aging Parents About Finances

For many people, money is a private topic. But understanding your parents’ financial resources is important as you think about their long-term care.

Still, talking with your elderly parents about finances can be tricky. “When you start asking people to talk about their financial accounts, it’s a little bit like poking around in somebody’s underwear drawer,” says Michelle Ash, a certified financial planner in Jacksonville, Florida, and chartered advisor in senior living. “You have to work your way into it.”

Follow these steps from Ash to have good conversations about your parents’ financial resources and wishes as they age. 

Step 1: Consider your parents’ point of view

Think about your parents’ generational and cultural viewpoints on discussing money. “The oldest generations tends to be very, very private about finances,” Ash says. “Baby boomers are more open, generally speaking.” Being aware of their perspective is a good first step — especially if it differs from yours. 

Step 2: Think about your family’s parent-child dynamics

If you have siblings, consider whether one of you might be better suited to talk to your parents about their finances. Sometimes, parents are more comfortable speaking to the eldest child. Or they may perceive one child to be better or worse at financial management.

Step 3: Start with why you’re bringing it up

Make your intentions clear. Let your parents know you want to talk about finances because you’re worried about their health or you want to plan for the future. “You can say: ‘My hope is we won’t need to use this information for a long time, but if you need help as you age, we want to be able to respect your wishes.’”

Step 4: Find out what’s most important to your aging parents

“Most people are far more interested to speak about what’s important to them and how they’re going to be cared for first,” says Ash. Ask about their experiences with caring for their own aging parents. Do they envision a similar situation?

This is the time to discuss your aging parents’ health and family health history. If they eventually need help managing activities of daily living or their health needs, what form ideally would that help take? Have they had experiences with assisted living or other senior living communities? What are their impressions?

Step 5: Look into costs associated with their plans

Once you know your parents’ long-term wishes, research elder care costs. If they want to remain in their homes, look at home care costs together. If assisted living may be an option, check out assisted living costs in their state. Are they experiencing some memory loss? If so, you’ll want to look at memory care costs.

Step 6: Discuss financial resources to support their wishes

Now that you know the type of and cost of care your parents want as they age, it’s time to look into what financial resources they have. “If you’ve started by talking about what’s important, it may be relatively easy to transition into asking your parents about their finances,” says Ash.

You may want to ask these questions:

• Do you have a financial advisor? Many financial advisors ask their clients to fill out a form that authorizes them to share information, says Ash. It states under what circumstances they want financial information shared and with whom.
  
• Do you have retirement or investment accounts? Do you have a pension?
  
• Do you have life or long-term care insurance?
  
• Where are your important legal documents?
  
• Do you have a will?
  
• Do you have a durable power of attorney?

Step 7: Research little-known ways to pay for senior living

Investigating ways to offset elder care costs before they’re needed could offer peace of mind to aging parents and their families. If your parent is a veteran, understand VA benefits for long-term care. If they own their home, a reverse mortgage may provide needed funds. Sometimes, life insurance can be used to free up cash for long-term care.

Step 8: Find out if your parents expect you to contribute financially

Some people’s goal is to spend their last dollar on their deathbed, says Ash. If they have unforeseen long-term care expenses, they reason they’ll go on Medicaid or move in with their children. But, the vast majority want to provide for long-term care costs if they can, and don’t want to be a burden on family, she says. “Of 300 client families, I’ve only had one say they want to go with ‘the Medicaid plan’ or move in with their kids.” If that’s your parents’ expectation, however, finding out now can help you prepare.

Talk now to avoid long-term care financial planning regrets

Not making financial plans for long-term care needs is the most common mistake people make, says Ash. “Everyone needs to have a strategy,” she says. “We’re all aging — scientists haven’t yet figured out a way for us to live forever. Many, many people need help. Not everyone needs a solution that is top of the line, but it’s far better to have a partial solution than no solution.”

Some elderly parents may have thought about their future and finances a lot. Others may be in denial they need to consider their finances at all. But you won’t know unless you begin discussing what’s important to your parents, and the financial assets available to help them.