We've all learned a few things from our parents, whether through word or action, about how to handle our finances. But what do we do when our parents start to reach retirement age and we aren't sure of their financial health or wishes if an emergency were to arise?
If you are under that wonderful under age 40 demographic and your parents are nearing or at retirement age, you should be having conversations about so many key topics:
Fidelity® Intra-Family Generational Finance Study found overwhelming evidence that children and their parents believe these conversations are important -- yet the key findings of the study were that adult children take on unnecessary financial and emotional stress because the lines of communication aren't open.
Setting the Stage for Sound Communications
Communicating well will always be at the heart for success in these conversations. Here are some ways you can steer it in the most positive direction.
Find the right time.
Bringing up the topic of finances when everyone is sitting down to Thanksgiving dinner might not lead to the best outcome. Instead choose a time when both parties are calm but able to fully focus and be present in the conversation.
Consider bringing in a a professional.
Those that participated in the Fidelity study stated that they were more comfortable talking to a financial professional than their children about the state of their finances.
Make suggestions, not demands.
No one likes to be told what to do, especially by their children. Avoid telling your parents what they "should" be doing, and frame it in more general, informative terms.
Share stories that you've heard.
Often times people relate better to stories than to facts or suggestions without a foundation. Do your research beforehand and know what will speak to your parents and what will move them to act.
According to Fidelity "starting the conversation may not be as difficult as getting to the details.” How much detail to ask for or disclose is different from family to family.
No child wants a parent to feel like they need a food taster to come along for Sunday dinner and no parent wants a child to feel like they will have to provide 100% of the parents’ upkeep in retirement.
Create a Sense of Openness
Frankness and openness can go a long way to create a sense of caring about the best interests of the entire family – parents and adult children alike. With that groundwork in place, reassurances for children and parents can be discussed.
If you are a child, why not ask some of these questions?
- Do you have an up-to- date living will, or have you sought estate planning assistance?
- How do you wish to handle serious debilitating conditions later in life?
- Have you sought the assistance of a financial planner or other financial professional to help you understand whether your resources can last for the remainder of your life?
If your parents are on the brink of facing some of these tough issues, think about the questions just asked and how you might start sharing information with your family. Do your research so you can come to the conversation well informed, but open to working through a few differences in opinion.