Have You Had These 12 Important Conversations With Your Parents?
You know how you seem to accumulate more stuff (and responsibilities) as you get older?
Life gets more complicated as we get older. So just imagine how your parents feel with everything they need to take care of as they age!
In addition to the day-to-day concerns we all face, your parents need to think about preparing for retirement (financially and otherwise), creating a retirement plan that works, making sure they’ve got healthcare covered, and communicating what they want for their lives as they continue to get older and may need more help or care.
Even if your parents are completely capable of making their own decisions and plans today, you need to know what those plans and decisions are.
That means you need to have some serious conversations with your parents about their finances, health, and estate plans -- and that can be tough.
It is important that as your parents age into their 60s, 70s, and beyond you don’t put these convos off because they are uncomfortable or hard. You don’t have to talk about everything at once. But you should start somewhere.
Here’s a list of 12 topics you and your parents should talk about as they approach their golden years. We encourage you to share this with your parents if having these conversations is something you don’t know how to approach them yet. It might help start the conversation.
1. Ask What Your Parents Want for Their Retirement
Be curious! Ask your parents to share what they want for their lives once they retire. Not everyone has the same expectations or wishes.
Some retirees plan to move to a new location as soon as they quit working. Others feel invested in their communities and want to stay. Do you know what your parents want to do?
And do you know when they actually plan to do those things? They might plan to retire the second they’re able to do so. But maybe they want to keep working for as long as they can.
There’s no one right way to do retirement, and you may be surprised by what your parents really want (versus what you thought they wanted). Plus, asking this question to start the conversation shows your parents you’re interested in them and want to help them achieve their goals.
2. Can Your Parents Afford Their Dream Retirement?
Once you understand what they want to do, you’ll likely want to talk about if it’s possible for them to finance their ideal retirement.
You don’t want to pry, but you should understand where they’re at and how you may be able to offer some sort of support, whether that’s financially or through some other means.
If your mom or dad hasn’t begun the process of planning out the finances yet, you can offer to help them calculate their retirement needs and evaluate whether they will have enough income to pay their way.
You can help by offering to research important information or connect them with trusted professionals that have their best interests at heart to figure everything out.
The way you help might also be in buying their home if they want to downsize and your family is looking to scale up. This convo might also be the time to talk about transitions in assets like a family business if you work with them.
3. Make Sure the Timing Is Right
Having enough money to retire is important. But knowing when you can retire to get the most of benefits and to avoid triggering any penalties is just as important.
IRS and Social Security Administration rules make the timing of getting social security benefits and retirement savings withdrawals complicated.
You may want to have conversations with your parents about their timeline for quitting their jobs and pulling from retirement savings or taking Social Security benefits.
For example, some types of retirement plans require minimum distributions once an individual reaches a certain age. And pulling Social Security benefits before reaching full retirement age (66 for individuals born between 1943 and 1954) means getting reduced payments.
Getting the timing wrong can complicate your parents’ plans, so talk to them to make sure they’re considering all the factors in play.
4. Get Honest Answers on Their Health
As your parents get older, stay aware of any chronic health conditions they have. They might feel like this conversation is too intrusive, but there are many good reasons for you to have this conversation that you can share with them:
● In an emergency, you may need to provide medical staff with the names of any medications your parents take and the names of their doctors.
● You need to know their medical situation for your own sake. You need to be able to share family history with your own doctors and healthcare providers to ensure you’re receiving proper preventative care and treatments.
The AARP’s planning guide for families, Prepare to Care, includes printable forms that you can use to record your parents’ prescriptions and other important medical information.
If your parent sees a doctor regularly, it is possible that he or she has consented to the creation of an electronic health record. If so, your parents should be able to get the login information to access their personal medical information from their doctor.
5. Ask About Your Parents’ Healthcare Wishes
While you’re talking about health, make sure to ask about the legal side of care.
Do they have an advance directive or living will? These documents include your parent’s wishes regarding life-saving measures.
Whether your parents have completed advance directives or not, you should find out how they want their treatment to be handled in the event they can’t speak for themselves.
Then, if your parents haven’t put their wishes in (legal) writing, it’s time they got an estate plan to address these concerns and more.
6. Have Conversations with Your Parents About Insurance
Ask your parents about their insurance and if they’re properly covered. As your mom and dad age, they may want to switch to a different coverage type or add extra coverage beyond what they had with an employer.
In the meantime, encourage them to take full advantage of whatever benefits their health insurance plan provides. Many plans provide preventative care for low or no cost.
If your parents are still working, ask them to look into any workplace wellness programs they may have access to before they retire. Some companies provide extra benefits such as weight-loss support, free flu shots, and stress-reduction courses.
Don’t forget to talk about HSAs. If they qualify to use one, they may want to contribute money before they stop working. It can serve as a nice, tax-advantaged healthcare nest egg for post-retirement medical costs.
You may also want to ask if they’ve considered long-term care insurance.
Deciding if they need it or not can be tough, so you may want to connect them with a fiduciary financial planner who can help analyze their situation and make a recommendation.
7. Talk About Estate Plans (If You Haven’t Already)
We briefly mentioned this, but it might need to be an entirely separate conversation.
While you may think estate planning only involves preparing a will, it’s not always so simple (and no, you shouldn’t go buy a will from an online portal).
Your parents’ estate plan should address survivorship, business continuity, and federal and state tax issues. An estate planning attorney or another professional can help your parents decide which documents they need and ensure that those documents are properly prepared and executed.
If your parents have already executed a will, revocable trust, or other legal documents, find out where the documents are stored so your family can access them when the time comes.
8. Are They Planning to Help with Your Children’s Education?
Something we encounter at Beyond Wealth is our client's parents are contributing to a college fund for their grandchildren but the details are usually vague at best. In most cases, your parents have either mentioned it in a passing conversation or occasionally provide some details about their plans.
This clearly presents a challenge when it comes to planning for your kid's college education. You may be surprised if you bring this up with your parents that they are excited to talk about how they’ll help their grandchildren. Also don’t just ask about higher education. If your parents encouraged you to attend private K-12 schools, they might be willing to help pay for them as well.
Asking this question will give you some clarity if they plan on making a modest annual contribution in place of a birthday gift, they have factored it into their gifting strategy, or maybe they plan to pay for all of college. Having some information here can go along way to creating an optimal college savings strategy.
9. Are Your Parents Planning to Make A Financial Gift to You?
This conversation usually happens if you ask your parents if they are on a path to affording their dream retire. Sometimes parents don’t offer a lot of details about if they are in a position to gift money to you while they are alive or if they are planning to leave an inheritance. The goal of this conversation is to avoid “Hey Mom and Dad, are you going to give me some money?”
The way to approach this might be that you are working with a financial planner. As you are putting your own plan in place a conversation came up about if we are planning to leave an inheritance to our children. You are wondering if they have discussed it with their advisor.
Things always change but knowing your parents’ intentions can help with your own financial planning.
10. It’s Tough, But You Gotta Ask: What Are Their Final Wishes
It’s not a fun question to ask, but it’s an important topic to raise with an aging parent. Ask your parents if they have any final wishes for their funeral.
Have they purchased burial plots or pre-paid for funeral services? Do they want to be cremated instead? What do they want their ceremony to be like?
You may be surprised to learn how they want matters to be handled and talking about it early ensures that you can honor their wishes later.
11. Find Out If Your Parents Have Designated Representatives
You already know about the advance directive that your parents can use to indicate their health-care wishes. In addition to that document, they may have a healthcare power of attorney.
These documents designate who will be authorized to make health-related decisions for someone if they are unable to do so themselves.
A related document is a durable power of attorney. This document designates a representative (the agent) who can make financial and other decisions on behalf of the person granting the power (the principle).
If you aren’t named as your parents’ designated agent, you’ll need to know how to get in touch with whoever is.
12. Gather Important Information and Details So You Can Handle Your Parents’ Affairs the Way They Want
As you probably noticed, you need lots of documents and info to prepare yourself and your parents for the future. The best way to make sure you can help and support your parents if the need should arise is to write everything down and store those details safely.
Work with your parents to prepare lists that include the names of important friends, relatives, and advisors in their lives.
Ask them to record the location of physical assets like safety deposit boxes and assets held in bank and brokerage accounts. Make sure that your parents have recorded their passwords and placed them somewhere for safekeeping.
You might also offer to help your parents consolidate assets and simplify their bill paying and other tasks if that feels appropriate to you.
Remember, you don’t have to do everything at once or discuss everything at once. Take things one step at a time.
By entering your parents’ life as a partner and helper now, you can be prepared to help them when they need you most.
Please contact me at 913-871-7980 or by email to discuss your financial planning and investment management needs.
ANDREW COMSTOCK, CFA
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.