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Talking to Parents about Retirement

Talking to Parents about Retirement

 

            It’s easy to avoid discussing money with your parents, and in some families, the subject is almost taboo. According to Fidelity Investments latest Family & Finance Study, 40 percent of families disagree on the roles children will play as their parents age, in terms of who will be their caregiver, who will be executor of the estate and who will manage the finances. The survey also revealed that 38 percent of parents and 43 percent of adult children who have yet to discuss retirement plans say it's because the subject never comes up.

            Though both adult children and elderly parents may be reluctant to talk about retirement and money, it’s an important conversation all adult children can and should initiate. Here are suggestions for having the retirement conversation with parents.

            Set the stage - Money and aging are sensitive topics. Introduce the subject of your parents’ retirement at a time when you can have a peaceful, rational, and face-to-face conversation about their plans for the future.

            Get support - Consider including siblings or other close relatives — or at least telling them about your plans to gather the facts about your parents’ financial future. A trusted financial professional can also be an educated and unbiased resource to guide the conversation, diffuse any tension, and keep topics on track.

            Make your motivations clear - Tell your parents that you want to know about their plans in case they need help in the future. Your goal is to understand their wishes and resources, not to take control.

            Ask the right questions - The focus should be on gathering information, not giving advice. Instead of telling your parents what they “should” be doing, try framing statements with “I.” “I would feel more comfortable knowing what plans are in place” or “I want to be better prepared to assist you in planning.”  Possible questions to ask are:

            - What are your plans for retirement? Are you confident you are on the right path?

- What are your planned sources of retirement income?

- Do you have any sources of debt? If so, what are they?

- What type of insurance coverage do you have (life, long-term care, Medicare)?

-If you were unable to live in your current location, where would you want to go?

- Have you considered if you could maintain a household alone if necessary?

- Are you now working with a financial planning professional?

            Locate documents: Ask about your parents’ important documents, including where the originals are stored and if they are up-to-date (including beneficiary designations). Make a list of the following:

  • Bank accounts, wills, trusts
  • Health and long-term care insurance policies
  • Investments, pensions, Social Security
  • Durable power of attorney, health care proxy, living will

            Ideally, this will not be a one-time discussion. Keep a list of the things you know about your parents’ finances and what you need to learn. Approach these conversations with love and respect, and the results may surprise you.

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