Aging Parents? 5 Money Topics to Discuss

Perhaps it was their upbringing, but both my parents were the "we don't talk about money" types. Even now, as I work in the financial industry and know the money topics we should be talking about as my parents age, their mindset has made these conversations a challenge.

My parents divorced when I was 12, so I've had two sets of these conversations: one with my mom and one with my dad. My mom was diagnosed with Alzheimer's in 2021. Fortunately, she did a lot of up-front work with an estate attorney. It was such a relief to my siblings and me that she had documented her decisions prior to her disease setting in. This meant we had a plan we could follow that clearly stated her wishes. This was one less burden to carry.

My dad is a different story. He has never wanted to talk about money. But gradually I was able to open the conversation. After chipping away over a period of about a year, we came to a great outcome.

Difficult as they may be, these discussions have brought peace of mind for our entire family. My hope is that sharing my story can give you ideas on how to approach these conversations with your loved ones. Here are five things that helped me.

I tried to open the estate planning conversation several times with my dad, and my approach wasn't hitting right. My dad and I are incredibly close. I'm super comfortable with him in every other way, but I just didn't have the right words, and he seemed to shut down the discussion before I could make much progress.

I decided to tell my dad about my friend Dana. Every time Dana visits her parents, her dad quizzes her: "Do you remember where my passwords are? What will you do when this or that happens?" and so on. I shared that with my dad and explained it would be important for me to know some of these things too. He listened but didn't react immediately. The next time I came over, he handed me a folder filled with all his account information, passwords, balances, and everything I would need to know. Progress!

While my dad has a will, no matter what I tell him, he still won't create a trust. All you can do is share information and offer to partner on the strategy they want to take. It's important to meet them on their terms and not be overly forceful with an approach they're not comfortable with.

Some people may be put in a position where they need to support their aging parents financially, as caregivers, or both. It can be hard to know what to expect until you get to the point where your parents may need help. And this could induce a level of shame that they didn't plan adequately and are now a burden on their children. It's important to approach these conversations with extreme openness and no judgement.

In my mother-in-law's case, she has always been very open with my husband about what she has and doesn't have for retirement. About eight years ago, we bought a house as an investment and let my in-laws live there rent-free. This has allowed them to have a better quality of life during their 70s by eliminating a significant financial obligation. It also provides my husband and me with a strategy for forced savings and unrealized investment gains. Win-win!

If you can get your parents to open up and share their financial picture with you, it could help you determine whether they are in good shape or if you're going to need to supplement. If it's the latter, knowing in advance gives you time to start saving and planning for that inevitability.

These four documents can clarify your parents' wishes ahead of time and allow you to manage their affairs if that becomes necessary.

Revocable living trust: This allows your parents to appoint a trustee who can manage the trust and its assets in the event of incapacity.

Power of attorney (POA): This legal document gives a trusted individual control over any financial matters your parents specify, such as paying bills, making gifts, or managing property. Without a POA, a court may need to appoint a conservator to manage their financial affairs.

Advance directive: Also called a living will, this legally binding document allows a person to spell out their preferences regarding medical intervention and end-of-life care. You may want to consider exploring if your parents also want to establish a health care proxy (sometimes called a medical POA), which gives a loved one the legal authority to make medical decisions regarding any situations not covered by the directive.

HIPAA authorization: The Health Insurance Portability and Accountability Act's privacy rule established a national standard meant to protect an individual's medical records. A signed HIPAA authorization form would allow you to speak with your parents' doctors about their medical situation.

Luckily, my mom was always a planner and did this paperwork in advance of her dementia. It's a comfort to have her true wishes on paper so it's not clouded by her disease. I've also gone through the process of drafting these legal documents with my husband, and it spurred a healthy discussion that we likely wouldn't have had otherwise about both our financial and medical needs and aspirations. 

The average 65-year-old today has a roughly 70% chance of needing some type of long-term care (LTC) in the future, according to the U.S. Department of Health and Human Services. The cost for LTC currently ranges from about $50,000 to $100,000 per year, according to the Genworth Cost of Care Survey.

Neither my parents nor my husband's parents have long-term care insurance. We know there are likely to be some expenses for both our mothers that they will not be able to handle. So, we know we need to save more to help them in the future. Again, it's important to understand the full financial picture so you can make a plan and not be caught off guard with unexpected financial obligations.

When we first noticed my mom's dementia issues, my sister and I knew we had to jump right in and make sure things were in order, which included reviewing her bank accounts. We noticed a lot of random subscription charges for $20 to $50 per month, and we didn't recognize any of the payees. My sister and I quickly realized our mom was getting scammed. On her cell phone, she was getting over 100 texts per day with messages like: "Hey Carolyn, your $15,000 IRS check is ready. Click here to get it. Put in your Social Security number." She started engaging with some of these texts, which then signed her up for subscriptions and memberships that chipped away at her account balances.

My sister and I had to dedicate many hours over several months to calling and threatening legal action for each subscription. In the end, we got back a lot of the money. However, we could not control the amount of text spam she was getting every day. We also could not prevent her from clicking on the links. We ended up changing her cell phone number and, since then, we monitor usage very closely.

I would recommend talking to your parents about scams and sharing specifics and stories. It's important for everyone to have awareness of how these things can start and what they look like because some of them are incredibly believable. If they know it happened to someone they know, it will likely hit closer to home. Suggest that your parents add a trusted contact to their financial accounts, which allows a financial firm to move more quickly when addressing suspected fraudulent activity.

Money conversations with parents can feel heavy and uncomfortable, but once you have them, both you and your parents will likely feel relieved. Your parents can feel good knowing they have your support and their wishes and legacy will be honored. And you can feel relieved knowing what you may be up against, potentially needing to save extra to support your parents, or helping to honor your parents' wishes as they age. If you haven't already, start these conversations. You can be a sounding board, a partner, and a support system to help your parents.