5 Tips for Talking to Your Elderly Parents About Their Finances
When you were a kid, talking with your parents about money may have been focused on whether to spend your allowance on a toy or save your money for the future.
Money management lessons from your parents may have continued throughout the years as you got a job or planned for the future. However, now might be the time for you to help guide your parents with their finances.
Here are five steps to having a productive conversation about your elderly parents' finances.
1. Start Early and Ease Into the Conversation
Starting the conversation while your parents can make infomed, proactive decisions with the benefit of time, can make discussing money more manageable and less stressful for everyone involved. Sometimes a natural money conversation starter presents itself, such as the illness or passing of a friend or family member, or a casual comment from one of your parents about the rising cost of prescription medicine. Consider using one of these opportunities to open the discussion gently. If you have siblings, ask them to join the conversation for added support.
To address any concerns about your motivations for getting involved, stress that you want to ensure your parents' financial goals are met and that their wishes are followed. You might start by asking, "What are some of the most important things you'd like to do now that you're retired?" Once you get them talking about their general goals, it might be easier to segue into more sensitive topics. Early conversations can help establish a foundation of trust and understanding, making it easier to address more detailed financial matters as time goes on.
2. Provide Money Management Support
If your parents mention having trouble keeping up with bill payments, take that as a cue to ask more questions to see how you can assist. This could be a perfect opportunity to offer help with scheduling their bill payments.
Additionally, it’s a good time to discuss the latest news about financial scammers. Remind your parents to keep their Social Security numbers, financial account numbers, and passwords private and secure.
Even if a parent needs help with money management, be cautious about becoming a joint account holder on their bank account. This could raise concerns about potential abuse, especially if other siblings question your authority to spend the money in the account. Instead, consider having your parent grant access to their accounts through a power of attorney (POA). This would allow you (or another sibling) to withdraw funds for that parent's benefit without raising the same concerns.
3. Ask About Estate Matters
The issue of estate planning can be especially sensitive. You'll need to convey that your interest in these matters isn't self-serving but based on your desire to understand and help fulfill your parents' wishes. For example, if a person dies without a will, it can be difficult to settle their affairs, and potential beneficiaries may become contentious.
If your parents agree, you can move the discussion further into topics such as creating a will. Encourage them to store copies of these documents in a secure place and tell a trusted family member how to locate them in case of an emergency.
4. Talk About Healthcare Expenses
If your parents are dealing with challenging health issues, it's especially important to talk about finances for potential related expenses. If you haven't discussed this topic with them before, ask whether they have private medical insurance, supplemental insurance such as Medicaid, or other assets to pay for healthcare costs not covered by Medicare.
Ask about their funding plans and preferences for long-term care. Do they have long-term care insurance? What are their preferred living arrangements if their health starts to decline? Encourage them to create a medical power of attorney (POA) to select someone to make healthcare decisions on their behalf if they become unable to do so.
With the proper forethought and sensitivity, you can all have a productive and cooperative conversation about your elderly parents' finances. You can provide the support they might want or need, while reassuring yourself that their concerns have been addressed — paving the way for future conversations.
5. Include Family Members
Involving the entire family in discussions about your parents' finances is essential for effective planning and support. Begin by coordinating with your siblings to ensure everyone recognizes the importance of the conversation and agrees on key points. This teamwork approach allows for the distribution of responsibilities.
One sibling might handle day-to-day financial tasks, while another oversees investments or insurance matters. Embracing diverse perspectives from each family member leads to more comprehensive planning and decision-making. Holding regular family meetings, whether in person or virtually, is crucial to keeping everyone informed and making necessary adjustments as circumstances change.
Encourage open communication within the family to promote transparency and prevent misunderstandings. Document any agreements made during discussions to maintain clarity and accountability. This unified strategy not only establishes a strong support system for your parents and primary caregivers but also ensures their financial and emotional well-being is well-managed. Actively address potential conflicts and consider involving neutral third parties such as mediators or financial advisors if necessary. By collaborating, you establish a supportive environment that enhances care and assistance for your aging parents.
For more information about helping your senior parents manage their finances, visit or call your local KeyBank branch.