In addition to opening up with your significant other and getting through some tough money conversations together, you need to be able to communicate about finances with two other important people in your life:
Yes, it can be awkward to ask your parents about money — especially about their money. (Can you believe 54 percent of adults would rather talk to their own kids about sex than talk to their aging parents about money?!)
But keeping open lines of communication about their financial situation as they approach retirement is important for both your sake and theirs.
They may not need (or want) your help today, but you might need to help them at some point in the future. The more you can understand about their financial and retirement plans today, the easier it will be to help them when they need it.
How to Bring Up Money Questions with Your Mom and Dad
This doesn’t mean you need to start offering your unsolicited advice. But you can open up the conversation with a few questions to better understand their situation and what they may need to do to keep their financial ducks in a row.
You can also talk about your own situation or share a story about a friend to get them talking. Be mindful about when you ask questions or bring up these topics, too. Finding a time when they’re not overly emotional or stressed is important.
And if they’re still resistant to talk about it? Remind them that you want to ask the questions and understand the answers now so you can help them avoid financial trouble in the future.
After all, should anything go wrong with their money plans, you’ll probably be the one on the hook for getting them through it.
As a last resort, you can help them find an objective third-party. They may not want to burden you with the details of their financial situation, but they may open up to a fee-only financial planner whose job is to provide unbiased financial advice and plans.
These are the biggest questions you should be asking your parents to help them — and you — maintain the financial success your whole family wants.
What’s Your Retirement Plan?
This might be one topic that’s easy to get your parents to talk about if they’re excited about an upcoming retirement. Make sure you understand what they’re planning on for life after their working career — and how they’ll fund their plans.
You can ask questions like:
- When do you plan to retire?
- Where do you want to live? Will you stay in the same place or do you have plans to move somewhere else?
- Will you do something else for work once you retire from your current job? How will you spend your time in retirement?
Once you understand what they have in mind, you might want to ask an important follow-up question: what will you do for income?
They could use savings, a pension, government benefits — or they may continue to work part-time. There’s no right answer here. The important thing is they have a spending plan and a way to fund it.
How Will You Handle Healthcare Expenses?
In addition to understanding what your parents’ retirements may look like, you’ll want to ask about their plans for dealing with healthcare.
Your parents shouldn’t take this question personally. For one, healthcare costs are some of the most expensive costs in retirement. Medical bills could eat up a large chunk of their budget if they don’t have the right strategy in place to handle those costs.
If they haven’t retired yet, you can help them find ways to plan for healthcare expenses, like opening and funding an HSA while they’re still working if they qualify. You can also help them figure out what kind of government benefits they might be eligible for an how those could help pay for healthcare costs.
You might also want to ask if they’ve considered long-term care insurance — especially if you and your family aren’t in a position to provide for your parents should they reach a point where they need 24/7 care.
Do You Have Your Estate Plan in Place?
This question might be a little harder to ask, but it’s critically important. Do your parents have an estate plan, which includes things like a will, healthcare directives, and other important legal documents that lay out your parents’ wishes should they become incapacitated or pass away?
If they don’t have these documents, they need to speak with an estate planning attorney (and sooner rather than later). You can acknowledge that it might be difficult or just feel morbid, but remind your parents that they don’t have to go through the process for themselves.
Getting an estate plan helps protect not just their assets, but you and the rest of their family. If anything were to happen to your parents and they didn’t have wills or estate planning documents, decisions about how to distribute their assets and property would go through probate court.
Probate can be a long, complicated, stressful process. And anything that goes through probate becomes public record, too. And because a probate judge makes the decisions, it could open the door for disputes within your family and further legal procedures if any relatives challenge the probate court’s decisions
If they do have an estate plan, make sure you know who the executor is. That person, whether it’s you or someone else, needs to understand where to find their will and who to contact should they need to make decisions around your parents’ estate.
Will You Need My Help?
One of the reasons to ask all these money questions of your parents is to understand whether or not they have the financial means to enjoy the retirement they want. These questions can also help you understand if they have the financial means to enjoy any retirement at all.
It might be hard to imagine, especially if you’re doing your best to work your wealth right now. But the reality is, half of American families have nothing in retirement savings.
According to the Economic Policy Institute, the median savings households where the income earners are between 50 and 55 years old is $8,000. For those between 56 and 61, it’s $17,000.
With numbers like these, it shouldn’t come as a shock if your parents will need a little help. It’s important to ask and get a straight answer here so you can plan ahead.
Do they anticipate needing financial support for living or healthcare expenses? Make sure you understand what their budget is, how much of their expenses they can handle themselves, and what shortfalls they may face.
Once you understand the reality of their financial situation, you can make a plan for next steps. That might be helping your parents come up with a more realistic spending plan, or it could mean paying a financial advisor to help them.
There are a lot of other things you can do to help your parents without hurting your own financial situation, but there’s no way to know the right thing to do until you ask these important money questions and understand what their finances actually look like.