Many Americans see money as a challenging subject to discuss with others. So it's understandable that so many people would rather avoid conversation topics like aging parents and finances. When you take into account the fact that parents may also feel awkward about accepting help from their children, conversations about your parents' retirement (and retirement finances) can feel nearly impossible to have.
But even if your parents are reluctant to discuss money matters with you, it's still important you have the retirement conversation — before they receive that gold watch and retirement sendoff party.
Why Have This Conversation?
Again, it can be easy for your family to completely avoid the subjects of aging parents and finances, since both money and our parents' mortality are issues most of us would rather not think about. But you can't help your parents achieve what they want — like their retirement goals — if you don't know what they are.
To start, you need to know what to expect from your parents' retirement. You may assume they want to stay in their current home, but they may be thinking about downsizing or moving to a retirement community.
Similarly, you need to know if your parents expect to receive financial, personal or home-maintenance help from you and your siblings. Clear expectations can help to avoid confusion during what should be a peaceful time for your parents.
Knowing what your parents want from retirement, and having a clearer view of their financial health, can help put you in a better position to help them — whether that means giving nitty-gritty money advice or simply making sure you always pick up the tab at dinner so they have more money available to set aside for retirement.
How to Start "The Talk"
Many aging parents may feel awkward about learning something from their children — after all, they can still remember a time when you needed their help to walk!
If you know your parents are likely to shut down a financial conversation, try framing it as an opportunity to learn together, so you're not simply assuming the role of their teacher. For example, when you're reviewing your own retirement plans, you could use it as an opportunity to let your parents know that you'd like to talk with them about how they handle their own accounts. Another option would be to invite them to read a book about retirement planning with you, and then use that book as a jumping-off point for discussing both your retirement strategy and theirs.
Finally, don't forget that financial conversations are really about life plans. If money is a truly taboo topic in your family, you can start your retirement talk by asking your parents what they hope to do after they retire. Simply talking about goals and plans can be a great catalyst for talking about money.
What to Talk About
There are several key areas you may want to cover when you do discuss retirement with your parents. It's also important to remember that "the retirement talk" is not just a single conversation. You'll need to cover retirement and financial issues over multiple conversations to help build a strong enough mutual understanding to really help your parents. Consider having separate discussions about each of these issues.
Day-to-day details: Consider having a discussion with your parents about how they envision life after retirement. This can help provide a baseline understanding of their future financial needs. This can also be a fun and easy conversation to start out the retirement talk with, since thinking about what they plan to do with their time can help your parents enjoy the anticipation of preparing for their next chapter.
Social Security & Medicare: Right now, most Americans don't have to foot the entire bill for retirement, since Social Security and Medicare are both available to help ease the financial burden. These systems are not a guarantee, and may not always be available, but currently, it can be beneficial to help your parents navigate these programs. You may be able to help them determine what their benefits will be, when they should take their benefits, and what Social Security and Medicare do not cover. These conversations may prompt your parents to take another look at their own savings and insurance plans.
Legal & financial documents: Even if your parents have already purchased adequate insurance and made estate plans, medical directives and power-of-attorney directives, these plans and documents will not help you if you don't know they exist or where they are. Making sure your parents have these documents in one place, and that you clearly understand their wishes, can help everyone be prepared.
Your Own Role
Your parents might decline your offers of help. This is because aging parents often prize their independence and worry about the time when they might be forced to accept aid from others. So it's important for you to make it clear to your parents that you have no intention of taking over — you simply want to understand their wishes and help them achieve their goals.
Though the discussions can be difficult to start, talking to your parents about their retirement plans and finances can be both helpful and rewarding. No matter how uncomfortable you feel the first time you bring it up, chances are you and your parents will be glad you had the conversation.