The Silent Crisis: Americans’ Reluctance to Discuss Aging Parents’ Finances

There are few things more taboo than talking about money and death.

But, if you are a parent approaching retirement, it is imperative to have the aging parent money talk with your adult children.

Unfortunately, this doesn’t happen as often as it should.

According to a Wells Fargo survey, only 38% of Americans with aging parents have discussed both their parents’ current and future financial situation. And 46% have talked to their parents about whether they have the money they need now.¹

Almost half of the survey respondents said they would rather discuss funeral plans over financial planning.²

In a Fidelity Investments survey, 60% have seen family members or friends lose their ability to manage their daily finances as they age, and 40% said they have had to help manage their parents’ finances.

Yet, only 9% of those surveyed think they could end up in a similar situation.³

Gallup’s latest polling finds that slightly less than half of U.S. adults, 46%, have a will that describes how they would like their money and estate to be handled after their death.⁴

56% of Americans believe that estate planning is important, but only 33% of adults in the U.S. have documented their end-of-life plans.⁵

All these statistics show that Americans know it is necessary to have the aging parent money talk, but most are hesitant to have the actual conversation.

Instead of avoiding the difficult conversation, use the tips below to help you navigate the aging parent money talk.

Why the Aging Parent Money Talk Is Necessary

Many parents believe their kids will step in and help as needed, but without talking to their kids about it, parents may be incorrect.

And this can lead to a lot of frustration, headache, and heartache.

Check out these findings from a Fidelity Investments study.

  • 92% of parents expect their children will assume the role of executor; however, 27% of children identified as executor didn’t know this was expected of them.
  • 69% of parents expect one of their children will help manage their investments in retirement; however, 36% of kids identified in this role didn’t know this was expected of them.
  • 72% of parents expect one of their children will assume long-term caregiver responsibilities in retirement if needed; however, 40% of children identified as the caregiver didn’t know this was expected of them.⁶

See why it’s critical the whole family is on the same page before something happens?

When to Have the Conversation

In general, it is better to have the aging parent money talk before you are an “aging parent.”

Cameron Huddleston, author of Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents about Their Finances, explains, “When there’s an emergency, it’s a lot harder to have a rational conversation. Your emotions are all over the place.”⁷

According to the study by Home Instead Senior Care, “Given the severe consequences of waiting too long to have this critical conversation, if your parents are approaching 70 and you are approaching 40, you should have ‘the talk’ about critical aging issues.”⁸

It is also wise to bring up the conversation if you or your spouse has been diagnosed with a life-threatening illness or is losing cognitive abilities.

What Topics Should the Aging Parent Money Talk Cover

There are several important topics this talk should cover.

  • Debt: While your children should not be held accountable for your debts after you pass, your estate is used to pay off any debts. Your children need to be aware of what this may look like. For example, don’t let your children be surprised to learn they have to sell the family home to pay off your debt. Be honest.
  • Needs: It’s important to be clear about what help you will or will not need from your children. Are you financially prepared to take care of yourself? Have you invested in long-term care insurance? Are you counting on your adult children to act as caregivers? Do you plan to move in with your adult children, or have you set aside money for assisted living?
  • Inheritance: 68% of young people expect an inheritance, yet only 40% of their parents will leave one.⁹ Let your children know what they should and should not expect.
  • Estate Plans: Discuss any wills, trusts, and insurance you have. You should also discuss end-of-life care. Note: If you do not have a will, the courts will decide what happens to your assets, which can be extremely difficult for your remaining family members.
  • Your wishes: Talk to your family about your funeral wishes and whether there is money set aside to cover these costs.

Who to Include

Think about who will be tasked with handling your estate should you die.

These are the individuals who need to be included in this important conversation.

Identify which roles your children may play.

You need to designate one of your adult children as the executor of your estate – the one who manages the finances.

Designate the adult child who will take on the role of caregiver and holds power of attorney for healthcare.

Designate a third party if you don’t feel your children are up to these types of tasks.

Where to Get Financial Help

The aging parent money talk can seem overwhelming, but there are plenty of people and tools available to help you.

For starters, meet with a financial advisor to discuss your retirement goals and end-of-life care goals.

Work with an attorney to get your family’s finances and your estate in order.

In addition to finding help yourself, you want to make it easy for your children to find this information.

If you plan to leave your children in charge of your estate, they need to know where to find the following information:

  • Bank and investment accounts
  • A list of assets
  • Debts
  • Insurance information
  • Your pension or other income
  • Recurring expenses
  • Names and contact information for the following: accountant, financial planner, lawyer.
  • Powers of attorney
  • Your estate’s executor
  • Any healthcare proxies
  • Living wills
  • Wills

How to Have the Talk

Again, it is better to have this conversation before you need to.

Talk to your adult children while you are healthy and happy.

Set aside time to give them a general overview.

Then, make a point to continue the conversation by giving more specifics. This will be less overwhelming for everyone.

When you start to feel uncomfortable, remember that you are doing something helpful for your children in the future.

They will appreciate all these talks when the time comes to put these talks into action – especially if they can avoid an emotional blow up come funeral time.

Stacie Irving explains, “No one is excited to have these conversations, but everyone feels relief once the door has been opened and a financial plan has been made.”¹⁰

Book a complimentary 15-minute 401(k) strategy session with one of our advisors to see how we can help you have Aging Parents’ Finances.

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