Dear mom and dad: Are your finances ready for retirement?

The need to discuss your parents’ futures with them, especially before a potential crisis or inciting event, is true for everyone.

  • By Erin Lowery,
  • The New York Times News Service
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Cameron Huddleston was 30 years old when she first suggested that her mother look into getting a long-term care insurance policy. Her mother was divorced, and Ms. Huddleston, a financial journalist, knew that a long-term care insurance policy could help offset the cost of any future care that might be needed. Ultimately, her mother couldn’t get coverage because of a pre-existing health condition, and the conversation just petered out.

“What I should’ve done was sit down with her and say to her, ‘Mom you can’t get long-term care insurance, so let’s look at your assets and see what kind of care you’d want,’” Ms. Huddleston said. “It didn’t even cross my mind to ask her that question.”

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Four years later, her mother started exhibiting signs of memory loss. When Ms. Huddleston was 35, her mother was told she had Alzheimer’s, at the age of 65.

Ms. Huddleston immediately went into preparation mode when her mother started having lapses in memory — so by the time the Alzheimer’s diagnosis came, the family had taken care of the legal paperwork and laid the financial groundwork to ensure her mother would be well cared for.

While Ms. Huddleston’s experience may seem an outlier to many, the need to discuss your parents’ futures with them, especially before a potential crisis or inciting event, is true for all.

Initiating the conversation

“It can happen naturally. As naturally as premeditated can be,” said Ms. Huddleston, who wrote the book “Mom and Dad, We Need to Talk” to help others navigate this potentially difficult transition.

How should you bring it up naturally? Ms. Huddleston recommends using general questions to ease parents into the conversation. “Mom and Dad: What does retirement look like for you?”

A natural point of pain in this conversation is that your parents have been the ones providing you with advice and guidance, and now you’re shifting the paradigm and asking questions that suggest you’re concerned whether they’re going to be O.K., Ms. Huddleston said. That shift can cause discomfort and tension.

Amanda Clayman, a financial therapist and financial wellness advocate for Prudential, advises that you tie the conversation to your own life as a way to maintain the original roles in which the parent is still the expert and helper. With this strategy, you’re not threatening the power dynamic, while also getting the insights you need.

For example, one script to follow could be: “My partner and I are working to combine our financial lives after the wedding. It’s tough figuring out things like life insurance, wills and retirement planning. How did you and Dad handle all that?”

Sally Hurme, an elder law attorney and author of “Checklist for Family Survivors: A Guide to Practical and Legal Matters When Someone You Love Dies,” suggests that adult children get together ahead of time to discuss how to talk to their parents. Some families might want to nominate a spokesman to lead the conversation.

“Problems become exponentially more complicated if kids don’t communicate well with each other and don’t present a unified plan about how best to support Mom and Dad, socially, environmentally and potentially financially,” Ms. Hurme said.

Timing is a big consideration if all the siblings are going to be involved. There is, however, one time you should avoid: the holidays.

“Yes, everyone might be together, but they can be together by Skype and other ways,” said Carol Levine, a senior fellow at the United Hospital Fund in New York. “These are festive times and good times, kids are around; don’t muddy it with all these difficult conversations.”

Do your parents have enough money?

The ultimate goal of the retirement conversation is to determine whether your parents have enough assets to sustain a comfortable lifestyle.

“Most people don’t plan and just eyeball what’s coming in from Social Security and look at their 401(k) balance and wing it,” said Liz Weston, a certified financial planner and personal finance columnist for the personal finance blog NerdWallet.

An initial way to avoid winging it is to use one of the many online retirement calculators. Ms. Weston suggests AARP’s for the Social Security benefits and NerdWallet’s or T. Rowe Price’s retirement calculators. Online calculators, though, aren’t enough.

“At some point you need a second opinion on your retirement plan before you retire,” said Ms. Weston, especially before a couple decides whether to take Social Security benefits early.

A way to ensure there is a plan in place is to get your parents to meet with a financial planner if they don’t have one.

Brittney Castro, a certified financial planner who is the founder and chief executive of Financially Wise Inc., had a client whose son found Ms. Castro and paid for his mother to work with her to put a retirement plan in place.

“She doesn’t have that much, but enough to work with, and needed to find a way to stretch it as long as possible,” Ms. Castro said.

This gesture can be particularly useful for adult children who don’t have the financial ability to support their parents.

Would you want to move in with us?

While multigenerational households are an expectation in many countries, only about 20 percent of households in the United States are multigenerational, according to a Pew Research Center analysis of census data. Sure, a multigenerational home helps stretch a parent’s retirement fund, but the decision has far more benefits than just money. Mainly, it reduces social isolation, which in turn can promote a healthier physical and mental state. You just need to be careful how you approach the topic.

“Ninety-nine percent of the time how children approach it is: ‘Mom and Dad, we’re worried about you. You can’t do as much as you think you can,’ and it’s all about taking away their freedom,” said Lisa Cini, president of Mosaic Design Studio, which provides design services for senior living, long-term care and health care institutions. “I think that’s the exact wrong approach. You need to move them from fear to freedom, not the opposite way.”

Ms. Cini moved her grandmother and her parents into the home she shared with her husband and teenage children, which she details in her book “Hive: The Simple Guide to Multigenerational Living.”

Instead of using scare tactics, Ms. Cini advises that you start by asking parents what they are having challenges with, like keeping up the yard or maneuvering the layout of their home or feeling lonely.

Next, outline the benefits to you of having your parents move in. Perhaps your parents can keep an eye on the kids or pets while you travel or help offset the cost of certain bills or help you handle meal prep during the week.

But living together under one roof isn’t a solution for everyone.

Other options to help your parents without moving them in could be aiding them in finding home help, visiting them more frequently to reduce the feeling of isolation or financially subsidizing their current housing.

Is your legal paperwork in order?

A natural extension of the retirement conversation is estate planning, which is arguably even more complicated. Now you’re bringing up the inevitability of their deaths and, if not done tactfully, it can seem as if you are trying to sniff out details of an inheritance. You can sidestep that, however, by not focusing immediately on a will.

Liza Hanks, partner at GCA Law Partners L.L.P. in California, doesn’t put a will at the top of her list of important estate planning documents.

“Power of attorney and advanced health care directives allow adult children to help parents if they’re incapacitated either short term or long term,” said Ms. Hanks, author of “Every Californian’s Guide to Estate Planning: Wills, Trust & Everything Else.” “When I work with clients, I call them the not-dead-yet documents. You’re not dead, but you need someone to help you.”

It’s always preferable to use an estate planning lawyer when drawing up legal documents, but Ms. Hanks doesn’t see an issue with using the online do-it-yourself options for people who feel they can’t afford or don’t want to pay for a lawyer’s time. She cites Nolo and Quicken WillMaker as two options.

“Online options are better than nothing,” Ms. Hanks said. “If you do them properly and follow the instructions, they will be valid.”

Feeling awkward about asking your parents about estate planning? Return to your own life experiences to bring up the topic — after all, you need these documents too. One script you might want to use: “My partner and I recently drew up a power of attorney and advanced health care directives and had to have a lot of discussions about who to designate as our backups. How did you two decide who to name?”

Another consideration is ensuring both parents know how to access all the legal and financial paperwork and pay all the household bills. Ms. Weston suggests using a service like Everplans to digitally store all the important documents as well as passwords.

If your parents keep resisting

For some adult children, their parents will consistently shut down efforts to talk about retirement and estate planning. It’s important to remember that this conversation can span months or even years, if you have the time. It also might not be a resistance to discussing the topic with you; it could be a contentious issue between them.

“Parents may not be on the same page themselves,” said Ms. Levine, who encourages children to present this as a caring activity and not simply an effort to postpone trouble.

Some feel comfortable living with the unknown, while others feel anxiety about their parents’ lack of engagement on retirement and estate planning. For them, there is really only one option.

“At some point you have to be willing to say they’re not going to talk to me and I’m going to do my best to take care of my own self financially,” Ms. Castro said. “And be ready to do what I can in the future.”

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