When to have the “First Chat” with your Aging Parents?
In my opinion, the ideal time to really talk with your aging parents in regards to all things related to retirement is before they retire. Retirement is a scary word and ensuring your parents have a solid plan before they take the plunge into living off of what is hopefully a bountiful amount of funds is quite essential. If you hear your parents “talking” of retirement, start the conversation. I regret not having that conversation myself. There are so many things I would have encouraged my parents to do differently in preparation for their future had I known they really didn’t have a good plan in place.
The goal for your initial conversation is to be in the “know” of your parents’ finances. It’s not to immediately get the nitty gritty, but just find out a few things about their overall portfolio.
So what should you ask first? The number one item you should know the status of right from the start is whether or not your parents have a Will. That is crucial to the journey. Why is a Will so import? Well, for starters, in the event your parents pass away or maybe just one passes, there is a legal binding document in place with an outline of how things should be handled financially. I can’t say this enough, having a Will is CRUCIAL. If they don’t have one, find an attorney or even use an online template to have something in place. We’ll talk more about Will’s, Power of Attorney’s and all legal documents in a separate post, but get going on just knowing if your parents actually have one.
So you’ve inquired about the Will and know the status, now it’s time to get a pulse check on more financial items. Sharing this information with you might not come easy at first so really think through your approach. You are almost playing detective in a way but you don’t want to be intrusive of what some feel is truly private information. Some beginning questions to ask are below:
- If you retire now, will you have enough money to live each month?
- Will your monthly budget change?
- Do you have enough funds to potentially live until you’re in your 70’s or 80’s? (The current life expectancy in the US is 79.05 years.)
- Do you have to dip into your savings to live each month? If so, have you calculated how much you need to sustain retirement?
- Have you considered an additional caretaker expense should one parent become ill?
Asking a few simple questions will help you gage if your parents have thought through the “what if” scenarios that actually do come up in the later years. No one expects to have a stroke, no one expects to be diagnosed with Alzheimer’s and no one expects a spouse to become completely dependent upon care takers. These are real instances that can happen and why having a game plan in place will be so important to your family.
Remember, the initial conversation is just to fact find. You don’t need details, you don’t need numbers, you just need to know there is a plan. Follow your gut too. If you don’t feel like your parents have thought things through, then change your approach and ask for more. As a child, no matter your age, you need to know these things so you too can be prepared for when situations pop up and you are stuck dealing with critical decisions. You can thank me later.
