The Financial Flip: How do I help my aging parents manage their money better?
Beth takes on a tricky new money question—and offers expert advice on how to resolve it and how to talk it over in constructive ways.
“My parents are retired and in their mid-80s, and I’m worried that they don’t have enough saved. My father has always managed their household finances, and has never discussed their situation with me or, from I can tell, with my mother. I’ve asked how much savings they have, but he has always brushed me off. Now he’s showing signs of forgetfulness—I won’t say Alzheimer’s—and I worry that if he is no longer able to manage their finances, my mom won’t be able to step in. I know that the responsibility will eventually fall on me, and I have no idea if their savings will cover things like assisted living, or even pay their bills. What is the best way for me to approach this conversation with them?”
—Bill T., Newark, Del.
Parents and children go through a lot of role reversals as they age. One of the hardest to pull off is what I call the Financial Flip. Take a look at your kids now: That tween struggling to untangle the elastic strap of a glittery unicorn horn from her hair, the 9-year-old who just split his chin pulling a John Cena move in the garage—odds are that one day they will be in control of your finances. Scary, right?
When you prepare to have the inevitable, frank conversation with your aging parents about their savings and solvency, you can be assured of one thing: meeting some resistance. To make sure you’re all on the same page, and to ease financial strain on all sides, there are steps that you need to take—financially, legally, and emotionally. Here are seven smart ways to tackle the Financial Flip without anyone flipping out.
- Draw on your parents’ concerns for each other. Each parent brings different anxieties and expectations to this conversation. That’s why it’s better initially to pull each aside separately, said Steven H. Zarit, distinguished professor emeritus at Pennsylvania State University and a pioneer in the field of clinical gerontology. With older parents, this may be in step with traditional gender roles. “One thing to try with the father is to say, you know, he’s getting up in years and you’re sure he would want the mother to be well taken care of if something happens to him,” Zarit said. The mother in this case probably has her own concerns. “With the mother,” Zarit said, “I would be very frank and say you’re concerned that he’s not able to manage the money anymore.” Be sure to point out that you want to protect both of them from scams designed to take advantage of older people, especially ones with cognitive problems.
- Go easy. If you’re expecting to take care of this over one family dinner, you’re in for a reality check. This is not a problem to be solved in one—or even three—conversations. Zarit’s advice: Plant seeds and don’t push. Pushing too hard can quickly turn a measured conversation into bickering. “When any of us, whether older or not, dig our heels in, we’re not going to agree to something,” Zarit said. “Rather than hitting the issue head-on, raise it, and then if you get resistance, back off a bit and say, ‘I just want to raise the issue and let you think about it.’ Then leave it at that.”
- Share how you feel. No matter how old we are, our parents still think of themselves as the ones who give advice, not the ones who get it. Let them know how uncomfortable this role reversal is for you as well. “It has to do with fears of being dependent, fears of having control taken away,” Zarit said. “The thing to do is to make it a non-argumentative conversation. The more you push, the more the person will push back.”
- Don’t pry. You might feel concerned about your parents’ lack of savings for the future—and rightly so. If they offer you a peek inside their ledger, that’s fine. But don’t ask. There are two big reasons not to pry: For one, there isn’t much that can be done if they haven’t properly prepared for retirement. The sad news is that many seniors have nothing but Social Security to pay the bills. While it may fall on you to support them in the future, you can’t turn back the clock on their retirement savings. (Consider, however, doing some research to learn how they might qualify for Medicaid in their state, should the need arise.)
- Get power of attorney. When a parent’s mental or physical faculties are in question, this is important to consider. “If she’s concerned about the father’s memory, the cleanest thing from a legal standpoint is to get the person to agree to power of attorney,” Zarit said. “Even to give it to his wife would be a step in the right direction.” How exactly you do that depends on the state your parents reside in. This guide from AARP can get you started. “Emphasize that it’s just a backup that would only come into play if your father could no longer make decisions,” Zarit said.
- Automate bill payments. You might have gone paperless ages ago, but it’s possible your parents aren’t hip to the wonders of online bill payment. Much like those pill organizers we rely on more and more as we age, automated bill paying makes sure you don’t miss a payment.
- Store passwords. And update them frequently—at least once a year. A friend of mine asked her dad for his Wi-Fi password recently, and he dug a sheaf of loose-leaf paper out from under the desk. It was covered in usernames and passwords for dozens of online stores, streaming services, bank accounts, and newspapers. After a half hour of searching, she ended up going to the local coffee shop to check her email. If your parents have a similar “method” to their password madness, show them what a sanity-saver online password vaults such as LastPass can be. While you’re at it, ask for access—in the event that one of them is incapacitated.