Parents how to talk to them about money when they are agingAlthough you may have depended on your parents to take care of you for a large portion of your life, there comes a time when you can take care of yourself and you might also be asked to care for your parents. So if your parents have started to face some physical and financial challenges, it may be time to step in and help them understand their saving and spending considerations, and estate planning possibilities.
Reviewing physical and mental health considerations
First, if your parents are no longer able to work and they are under the age of 65, its important to determine if they might qualify for Social Security Disability Insurance or SSDI. This is a disability program offered through the SSA which provides wage replacement for workers who have a severe health condition which does not allow them to work for at least 12 continuous months.
Their condition must be very severe, and they cannot be able to retrain for new work. They also must have worked and paid enough employment taxes to qualify for benefits. If you believe they might qualify you can call the SSA at 1-800-772-1213 or you can contact a disability lawyer for more information. Consider, however, if they have reached their full retirement age they will not qualify for SSDI, but instead, must apply for SSA retirement benefits.
Talk to your parents about their financial situation
Next, its time to have a financial discussion. You can start slow and easy, but its important to review basic financial information. For example, what is their income, do they have a will, have they created an estate plan and what are their long-term care ideas. If both parents are alive the conversation should be done with both of them in the room. This could also be the time to make sure they both understand their finances.
For instance, its not unusual for one partner to understand the finances, have full control and make all decisions while the other spouse is left in the dark. While this may be more comfortable for each partner, it could leave one of them in a precarious situation if the spouse who has all the financial information dies without a clear, outlined plan for their surviving spouse.
Talking to your parents could eliminate fraud
Every day we hear about con artists and scammers targeting the elderly. Financial experts suggest one more benefit of opening up the financial discussion with your parents is it could help identify who your parents are currently getting advice from and whether they have been the unwitting target of financial fraud.
Keys to working with my parents
What are some key steps when working with your parents? Experts suggest the most important thing is to respect them and their boundaries. If your parents do not want your help or do not want to share information with you, thats okay. The only caveat is if they have lost sufficient mental capacity to manage their own finances. At this point you may have to legally step in. If they have a sound mind and are open to your help, you can help them create an estate plan, talk to a financial planner, help them update their investment portfolio and make sure plans are in place to minimize any legal complications or probate delays in distributing their assets when they do pass away.