Asking your parents about their finances may be a conversation you’ve been dreading. Your parents don’t want to talk about their finances either. In fact, more than 40 percent of parents are reluctant to talk to their kids about their finances, according to a T. Rowe Price report.
Having honest conversations about the taboo topic is essential, but can be uncomfortable — especially if you have financially irresponsible parents.
Not sure how to bring it up? Here are six ideas:
1. Be casual. Bring up a statistic or interesting fact from a news broadcast you’ve heard or an article you’ve read. Starting a conversation with “I heard that most Americans don’t have enough savings to retire” and asking whether your mom and dad have sufficient savings to last through their “golden years” will make it seem more like a casual conversation than an inquisition.
2. Make it a family affair. Call a family meeting and suggest that the entire clan make a commitment to have their estate documents prepared and life insurance policies updated. If your parents feel like the exercise is about family finances and taking care of each other — not singling them out — they may be more apt to open up about whether their wills, powers of attorney, health care directives and other paperwork are up to date.
3. Share information. You can’t force your parents to hand over their bank and investment account statements, reveal the contents of their estate documents or share the details of their insurance policies. You can ask for a list with the names of their accountant, lawyer and financial planner to have on hand in case of emergencies. You can also offer a list of your contacts in case your parents need to meet with a professional to get their financial affairs in order.
4. Be honest. Whether you’re concerned about their ability to cover their living expenses and health care costs or worried about being prepared in case of emergency, be honest with your parents. Your mom and dad will not fault you for saying, “I love you and want to be sure we’re both protected in case something happens.”
5. Offer to help manage their finances. Your parents might feel overwhelmed by all of the tasks on their financial to-do list. Offering to help them get their estate plan in order, research long-term care insurance or review their investments could ease their burden and give you important information about their financial situation.
6. Call in the professionals. If no amount of gentle prodding gets mom and dad to talk to you about their finances, ask if they’ll meet with a professional. A financial planner will gather all of the essential information and help your parents craft a plan. Bonus: Most will also encourage older adults to share information about their finances with their children, which could be one way to get your parents to open up. Connect with a Farm Bureau agent today.
Talking to your parents about their finances may be uncomfortable but it is important. The more information you have, the better able you’ll be to make sure their needs are met as they age.