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.
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. 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.
“It’s never too soon to have this conversation,” says Greg Young, owner of Ahead Full Wealth Management LLC in Rhode Island. “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.”
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.
THE TOPIC: 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 “What did you do?” gives you insight without being invasive.
The cost of extended care is staggering — assisted living carries a median price tag of $48,000 per year, while the annual median cost for a nursing home is nearly $90,000 for a semi-private room, according to an annual survey by Genworth, an insurance company. In-home care can be just as costly, depending on the services needed.
“‘Do you have long-term health care insurance?’ That’s a specific question that is pretty palatable,” says Thayer Willis, a wealth counselor. “If they say yes, the follow-up question is: ‘How does it work exactly?'”
If the direct approach doesn’t jibe, try backing into the conversation. Use someone else’s experience as an example and ask whether your parents have considered assisted living in the future and how they would pay for it.
THE TOPIC: ESTATE PLANNING
Sorting through an estate without clear directives can tear families apart. That’s 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.
“Knowing what to expect from them, or that they’ve done some planning, will certainly make an emotional eventuality a little easier,” he says.
Starting your own family, and setting up your own estate plan, is a great opportunity to ask your parents what they have in place. You can also use someone else’s experience to start the conversation.
“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?'” says Mark Struthers, owner of Sona Financial, a wealth management firm.
Your folks might not be comfortable talking about their finances. That’s OK. Don’t push them. Instead, make it clear that you’re ready and willing to talk another time, Willis says.
This column was provided to The Associated Press by the personal finance website NerdWallet. Kelsey Sheehy is a writer at NerdWallet. Email: firstname.lastname@example.org. Twitter: @kelseylsheehy.
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