Parents are often more than happy to offer financial advice to their kids. They like to feel needed and want to make sure youâre on solid financial ground. But itâs important to turn the tables and ask about their financial plans, too.
Are theyÂ saving for retirement? Have they updated their will? Whatâs their plan for long-term care, should they need it?
It doesnât matter if youâre living on ramen or running your own business, asking your parents about their financial future can feel odd. But life moves fast. And your parentsâÂ financial plansÂ can and will affect your own, eventually. So itâs important to talk early and often about how theyâre planning for retirement and the often high cost of aging.
âItâs never too soon to have this conversation,â says Greg Young, owner of Ahead Full Wealth Management LLC in Rhode Island. âIf 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.â
Tact is everything when talking about money. Show them you want to learn and you want to help. Use your own life events, like a new job, a new house or an expanding family, as an opening to talk about their plans.
Itâs important to know if your parents are saving, but this conversation isnât just about money. Itâs also about their dreams for retirement.
Your first real job (or any new job) is a good chance to ease into the conversation. Ask your parents for advice as you navigate 401(k) contributions. A simple âWhat did you do?â gives you insight without being invasive.
House hunting? Thatâs another opportunity to check in with your folks about their retirement plans. You know, in case you need to add âin-law suiteâ to your wish list.
The cost of extended care is staggering â assisted living carries a median price tag of $48,000 a year, while the annual median cost for a nursing home is nearly $90,000 for a semiprivate room, according to an annual survey by Genworth, an insurance company. In-home care can be just as costly, depending on the services needed.
Long-term care insuranceÂ helps offset the cost of nursing care and help with routine activities like eating, bathing and dressing, whether at home or in an assisted living or nursing home.
Long-term care insurance gets more expensive with age, so most people who buy it do so in their 50s or 60s. Itâs good to start the conversation early to have the topic on your familyâs radar.
ââDo you have long-term health care insurance?â Thatâs a specific question that is pretty palatable,â says Thayer Willis, a wealth counselor. âIf they say yes, the follow-up question is: âHow does it work exactly?ââ
If the direct approach doesnât jibe, try backing into the conversation. Use someone elseâs experience as an example and ask whether your parents have considered assisted living in the future and how they would pay for it.
Sorting through an estate without clear directivesÂ can tear families apart. Thatâs the last thing your parents want. Talking openly about things like wills and trusts, life insurance and advance medical directives can help you understand what they have in place, and give you insight into their intentions, Young says.
âKnowing what to expect from them, or that theyâve done some planning, will certainly make an emotional eventuality a little easier,â he says.
Starting your own family, andÂ setting up your own estate plan, is a great opportunity to ask your parents what they have in place. You can also use someone elseâs experience to start the conversation.
âAsk questions like: âA friend from work had a parent die and they could not find any paperwork. âŠ Do you and Mom have all your paperwork together in one place? If you were to pass, who has access to it?ââ says Mark Struthers, owner of Sona Financial, a wealth management firm.
Your folks might not be comfortable talking about their finances. Thatâs OK. Donât push them. Instead, make it clear that youâre ready and willing to talk another time, Willis says.
âYou might need to take the approach of planting a seed, and thatâs all you do in the first discussion,â she says. âWhich is another reason for beginning early.â
Kelsey Sheehy is a writer at NerdWallet. Email: [email protected].