Here at AgingOptions we often say that aging is a family affair – another way of saying that parents need to involve their adult kids in their plans for the future. We’ve seen too many families fall apart because mom and dad never made their wishes clear. Others have faced financial pressure because the parents never planned how to cover the costs of their own care as they grow older. Parents need to be open with their kids about retirement planning. But what do the kids do if the folks refuse to initiate the “Retirement Conversation”?
Initiating the Retirement Conversation Can Feel Awkward
The answer, according to this recent NerdWallet article, is clear: the younger generation just might need to initiate the talk themselves. “Yes,” says the title of the article by columnist Kelsey Sheehy: “You Should Ask Your Parents About Their Financial Plans.” As Sheehy writes, “Parents are often more than happy to offer financial advice to their kids. They like to feel needed and want to make sure you’re on solid financial ground. But it’s important to turn the tables and ask about their financial plans, too.” The list of questions kids should ask parents may seem obvious – Are they saving for retirement? Have they updated their will? What’s their plan for long-term care, should they need it? – but starting the chat can be awkward. “It doesn’t matter if you’re living on ramen or running your own business, asking your parents about their financial future can feel odd,” the NerdWallet article says. “But life moves fast. And your parents’ financial plans can and will affect your own, eventually. So it’s important to talk early and often about how they’re planning for retirement and the often high cost of aging.”
As one financial planner told Sheehy, “It’s never too soon to have this conversation. If something happens to your parents, not only there goes your safety net and a key part of your support network, but their affairs will likely pile onto you.” The article suggests that “tact is everything” when launching into a conversation with parents about their money and their retirement plans. “Show them you want to learn and you want to help,” NerdWallet recommends. “Use your own life events, like a new job, a new house or an expanding family, as an opening to talk about their plans.”
The Retirement Conversation in Three Essential Elements
In the NerdWallet article, Sheehy suggests three areas for adult kids to consider when deciding to dive into this important discussion with their parents. We’ve paraphrased these three broad topics as Retirement Dreams, Long-Term Care, and Estate Planning.
- Retirement Dreams: “It’s important to know if your parents are saving,” Sheehy writes, “but this conversation isn’t just about money. It’s also about their dreams for retirement.” We think she’s spot on with this observation, and it reflects our philosophy here at AgingOptions: retirement planning and financial planning are not the same. Getting your parents to talk about how they want to live in retirement, not just about how much they’ve saved, will give the adult children valuable insight into how well the folks have prepared. Sheehy suggests a few good ways to get into this important topic. “Your first real job (or any new job) is a good chance to ease into the conversation,” she writes. “Ask your parents for advice as you navigate 401(k) contributions. A simple ‘What did you do’ gives you insight without being invasive.” House-hunting can provide “another opportunity to check in with your folks about their retirement plans. You know, in case you need to add ‘in-law suite’ to your wish list.”
- Long-term Care: Because care costs are so staggeringly high, whether for assisted living, nursing care or in-home services, adult kids need to understand what provisions their parents have made. This conversation typically turns to long-term care insurance which helps offset these costs. “Long-term care insurance gets more expensive with age,” says NerdWallet, “so most people who buy it do so in their 50s or 60s. It’s good to start the conversation early to have the topic on your family’s radar.” If the straightforward question, “Do you have long-term health care insurance?” makes you uneasy, the article suggests you “try backing into the conversation” by “[using] someone else’s experience as an example.” This is also a great stimulus to get your parents to attend a LifePlanning Seminar, since long-term care insurance isn’t the only way people can find to cover the costs of their care needs.
- Estate Planning: “Sorting through an estate without clear directives can tear families apart,” says Sheehy. “That’s the last thing your parents want.” It’s essential that parents and kids talk openly about things like wills and trusts, life insurance and advance medical directives. These topics “can help you understand what they have in place, and give you insight into their intentions.” A good place to launch this conversation with the folks is with your own estate plan, especially if you have children of your own. “You can also use someone else’s experience to start the conversation,” says “Ask questions like: ‘A friend from work had a parent pass and they could not find any paperwork. … Do you and Mom have all your paperwork together in one place? If you were to pass, who has access to it?’”
The Best Preparation for the Retirement Conversation: a LifePlanning Seminar
This article is a persuasive reminder of the importance of preparation. When you use the power of an AgingOptions LifePlan to chart the course for your retirement future, you’re also laying the groundwork for a great blessing that your loved ones will experience after you pass on, as they see how well-ordered your affairs have been. A LifePlan blends together financial planning, housing options, legal strategy, medical coverage and a communication plan involving those closest to you – all the essential elements of retirement living. You’ll be able to navigate through all the phases of aging with confidence and security, creating the retirement you’ve always hoped for, and leaving a well-prepared estate behind in the future.
Why not invest a few hours and find out more? We offer free LifePlanning Seminars with Rajiv Nagaich at locations throughout the region. Visit our Live Events page for a current calendar, or give us a call. The key to a brighter future for you and those you love is a LifePlan from AgingOptions. Age on!
(originally reported at www.nerdwallet.com)