Ever dealt with that “who’s paying the bill” tussle at the end of a family dinner? I know I have. I’ve sat in countless meals where the bill was yanked in four different directions, with siblings, in-laws, and parents all equally willing to put down their credit card and provide for the family.
That’s not a bad situation — I know that fighting over generosity is far better than fighting over bills — but every time this happens (and it does happen every single time) I’m reminded of just how complicated the connection between family and money can be. Even though family is the most intimate of bonds, in many families, specifics about money are taboo, and even small money mentions can cause friction.
Why do you need to talk about money with your aging parents? You don’t need to know the specific numbers in their bank account. But if you have a broad view of their overall retirement plans, their plan in case of illness or need for long-term care, where they are in the estate planning process, and any details that they want you to know now, you might all feel more secure about the future.
Here are five money conversations to have with your parents.
The “what’s the retirement plan” conversation
No matter how young your parents are, talking about a retirement plan — do they plan to retire, at about what age do they plan to do so, does their company offer any sort of pension plan or retirement benefits — can be a smart one to have.
Knowing what their plans and timeline are can be important for your own planning, but it’s equally important to recognize that your parents are adults who may have a different view of the world than you do. It can be exasperating to hear a plan that seems unrealistic (“we’re just going to work forever!”) or idealistic (“we’re just going to sell our house and live off the land!”) but needling or lecturing them is unlikely to change their plans. That said, suggesting or referring parents to a trusted financial planner may be able to help them come up or consider options they hadn’t yet thought about.
What if your parents haven’t saved for retirement? First, what is their plan? Is their plan to sell their house and use those expenses? If you’re in a position to help, either in the form of financial assistance, living expenses, or letting them move in with you, let them know that — and make equally clear what you’re not able to do.
Above all, financial experts recommend making sure your own retirement savings and goals are on track.
The “what if the worst were to happen” conversation
If one of your parents was no longer able to advocate for himself or herself, what is their wish in terms of medical care? This discussion can touch on medical proxy forms, any wishes regarding medical treatment and interventions, and any wishes for death or burial.
While the convo is morbid, it’s not restricted by age. You and your partner should probably discuss the same questions for yourselves. Getting medical proxy forms and wishes squared away minimizes confusion and can make it less complicated to make decisions during a stressful time.
This is also a time to discuss whether or not your parents have a life insurance policy, and how one of them would be able to keep paying the bills if the other were to die. If your parents are nearing retirement, they may have a nest egg or investments that would cover the cost of living for the remaining spouse. But if not, then it might be smart to consider term life insurance options. If your parents are still relatively young and healthy, they may be able to purchase a term policy at an affordable rate that could give them peace of mind for the future.
This conversation can also be a good segue into larger fears surrounding aging. What if one of your parents develops dementia? What if one of your parents is no longer able to drive? Talking about these what-ifs can pave the way to easier conversations in the future if these things do occur, and can also help you and your family plan accordingly. For example, if it’s a priority for your parents to live together, no matter what, having assisted living communities on your collective radar can make it easier to find the right place when the time seems right, versus putting the research off until a day when time may be of the essence.
The “where are you planning to live” conversation
Whether your parents are still living in the house you grew up in or they’ve downshifted to a smaller space, it’s important to recognize that home maintenance can be tough as you get older, and the home that was perfect for someone in their fifties or sixties may be a burden to someone in their seventies or eighties.
Even if your loved ones don’t have any mobility issues now, a ten- or twenty-year plan can be helpful for everyone. Would you be able to let your parents live with you and your family? Let them know that. Would it be helpful for them to move closer to you now so they could help you with your own children? See if a multigenerational setup might be something they would consider.
It’s also a good time to look at retirement or over-55 communities, including prices, pros and cons, and your parents’ level of interest. For example, many over 55 communities have tiered living arrangements where healthy, young retirees live independently, with options for more care, including prepared meals and personal assistance, as residents age and need more help.
This can also be a time to consider long-term care insurance options, which can help pay for extended care in a nursing facility if it becomes medically necessary. These types of insurance plans are often less expensive if the applicant is relatively young and healthy.
The “let’s talk about logistics” conversation
Are documents, including a will and life insurance information, stored in a safe, online, or in a file cabinet? Who has access to information? If you were to need a legal document in a hurry, like a medical proxy form, where would you find it? This conversation focuses on the financial paper or digital trail your loved one has.
It can also be a good time to learn the names of any legal advisors and financial planners, and the locations of important documents, account numbers, and records, including passwords. It may be a good time for them to share these with you, or tell you how to access them if the time comes. Again, this conversation isn’t about numbers, it’s just about how you can access key info if they don’t have the ability to give it to you. This conversation can go both ways — if your financial info is all over the place, commit to organizing it, including making sure key documents, account numbers, and passwords are in a secure place that is accessible to those who may need it.
The legacy conversation
How will your loved ones like to be remembered when they die? This conversation can focus on whether or not your loved ones have prepared a will, and what might be included in it. It’s not to ask, “Who gets what?” but rather, a way to broadly understand how their assets may be divided down the road.
This conversation can be brought up by you sharing that you and your partner have recently made a will, going through some of the important elements that may affect your loved ones, such as who would be named guardian of your children. It’s smart for every adult to have a will, and if your parents haven’t set one up yet, it can be a good time to guide them into how to get one prepared.
This is also a time to discuss any key elements they want in a funeral or celebration of life, and where they may want to be buried or have their ashes scattered. This conversation about leaving a legacy can also touch on values, memories, life lessons, and stories they want to make sure are remembered through generations.
Remember: The hardest step may be initiating the conversation
As a mom to a three-year-old, I’m pretty new to the parent game. But already, I know one thing truly unites all parents, no matter how old they (or their kids!) may be: The constant concern over the wellbeing of their offspring. Knowing this has made it easier to bring up the tough stuff with my own octogenarian dad. I know that at the end of the day, even though our life experiences and our financial profiles are vastly different, we both want what’s best for our kids.
To me, this realization works even if you’re not a parent: Your parents probably don’t want you worrying about them, and by bringing up these concerns, you’re showing that you do care about them, you want to help, and allows for the conversation to flow both ways. Money is complicated. But for me, what worked to get over the awkwardness was to get past the dollar figures and numbers and focus on the emotions behind my questions. I was asking them these questions because I love them, and if I’m in a position to help in any way, I want to know now. The other benefit of bringing up these questions was having a sounding board to talk about my own concerns for providing for my own daughter in the future. At least for me, broaching the complicated conversations has made me feel closer to my family.
Of course, some things stay the same. I don’t expect any closure to the “who’s paying the bill” argument. And now that my larger financial questions have been answered, I have to say I even enjoy watching the way that argument unfolds.
Anna Davies is an editor at Haven Life. She has written for The New York Times, New York Magazine, Refinery29, Glamour, Elle, and others, and has published 13 young adult novels. She lives in Jersey City, NJ, with her family and loves traveling, running, and trying to find the best cold brew coffee in town.
The information provided is not written or intended as specific tax or legal advice. Haven Life Insurance Agency does not provide tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.
Haven Life does not endorse the products, services and/or strategies discussed here.