How to talk to your aging parents about money


About the Author

michael mcgrath

true Michael McGrath, MS, CFP®, CLU®

Regional Director/Partner
Valencia, California

walking and talking with parents

Author: Mike McGrath 

Many of my clients are in the sandwich generation: they're stuck in the middle of helping their millenial kids and caring for their parents.

The gift of medical science has been that we're living longer than ever, but that also means that we have a generation of people who are outliving their money, have had significant (and costly) illnesses, and/or have made errors of judgment while in retirement, their current situations do not look how they originally imagined.  In addition, separate from personal circumstances,  lower than predicted investment yields and rising core costs haven eaten away at elderly parents' finances.

All of this has lead to a strange role reversal, which can be hard on both the adult children and the parents.  When my clients reach out to support their parents, they have had to choose between their parents’ financial needs, sending their kids to their chosen college or financing personal retirement.

Signs you need to talk to your parents about money

I have witnessed many signs that reveal parental financial distress, including:

  •  Sudden implementation of cost-cutting measures, like coupon clipping and taking advantage of senior discounts for many things like oil changes to restaurants.
  •  Sudden reduction of social activities, such as no longer eating out or going to movies or plays.
  •  Verbal signs, such as change in commentary about the cost of things or bragging about how they saved an insignificant sum of money.

portrait with parents

Having the tough talk

Regardless of the specific signs, the character of the individuals involved and the quality of their relationship are key.  If I were to assume that the parents and adult children have a good relationship then this situation may strengthen their relationship.  If those things are not present, obviously it may strain their relationship, making things more difficult.

Regardless, I would first outwardly recognize and express caring towards the parents. To offer financial assistance like this is an act of love.  Recognize that for what it is.  Next, I would recommend a direct conversation about both the adult children's and elderly parents' finances, as well as the need for and ability to help elderly parents with finances.  This must happen in a “safe” environment, meaning only with those who are most trusted in a comfortable and familiar setting, so everyone is relaxed and open to share very personal information.  Sometimes, for example, even if in-laws get along, mixing the two groups can present an entirely new and higher level of requisite trust.

Recognize the true gift of love is the genuine offer. Whether or not the gift is not made or even of great value, knowing a family truly has each other’s best interest at heart is of greatest importance.  That is edifying no matter the outcome. However, if you're able to establish trust, you can go through financial planning for elderly parents. It'll give everyone involved a clear understanding of the situation and maybe point to a resolution. Note that money doesn’t have to be the means of the gift.  

To do this well, I'd suggest meeting with a fee-only financial advisor who's aware of the delicate nature of the situation, also because of their understanding of navigating these difficulties, plus having a third party can help remove conflicts in the conversation. Contact an advisor today!


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