It’s time to have an uncomfortable conversation with your parents

Pete the Planner, causing awkward moments since 1977.

Whether it’s happened already or not, you will eventually switch roles with your parents. They will look to you for guidance. They will look to you for care. And they may even look to you to help them financially. This is inevitable in one way, shape, or form. I’d be lying if I told you that it isn’t sad. It is sad. And we’re talking about it on this here web log because it can have a serious impact on your financial life.

No one really knows how to retire. Most people have never done it before. So when the time comes to retire, or in other words when it comes time to give up your earned income, many mistakes can be made. People often retire too early, with too many expenses, and without a health care plan in place. But what do you care? You’re in your 20s, 30s, or 40s (if you’re in your 50s and 60s and you read my blog, thank you, and I’m sorry some of my pop culture references are lost on you), so you have your own things going on. You are getting married, having kids, building careers, etc etc. All you generally know about your parents’ financial situation is that it’s probably better than yours. And THIS is where the trouble begins.

We are relative thinkers. We hold ourselves in a certain regard, and anyone that seems to be in a better spot than us, we hold in high regard. It’s kinda odd, but that’s what we do. If someone is relatively more successful than us, then we generally remove the relatively, and simply call them financially successful. This most often occurs with our parents. They generally have more stable jobs, bigger 401(k)s, and they don’t have the same material expenses that the typical young American family has. All this adds up to assuming that our parents will be fine when it comes to retirement. That’s a mistake.

At first, it seems like none of your damn business. But it is. Well, it will be. Unless you gave your parents a flaming bag of poo for Mother’s and Father’s Days, then you will most likely be dealing with their estate when they pass away. You will liquidate their assets, pay their debts, and keep the rest. No matter how much money they have, this process sucks. If your parents are adequately prepared, it sucks. And if your parents aren’t adequately prepared then it REALLY, REALLY, REALLY sucks. The sooner you have a conversation with your parents about their retirement and estate plans, the less the situation will suck. Remember, it’s still going to suck.

So how exactly are you to say “Hey Pops, I want to make sure everything’s cool when you die”? It’s not as cut and dry as death. You actually want to make sure everything is cool if they live. That’s the whole point. They need planning. They need retirement planning, long term care planning, and estate planning. These are things that you and I generally don’t think about on a daily basis. The best way to bring it up is with a casual “hey, can you walk me through your retirement plans so that I know what my job is?” That will inevitably raise a “huh?” That “huh” is a good thing. It gives you a chance to say something like this:

“I’ve been doing a lot of reading on financial stuff recently. I found this really (pick your favorite fawning adjective: smart, funny, handsome, potent, ginger) financial writer named Pete the Planner. He had a post the other day about your parents’ retirement and estate plans. He says that I should know what’s going on so that I can step-up when necessary.”

See, that wasn’t that awkward. Make sure that your parent knows how important it is to you to help them. You aren’t doing their planning, you are simply trying to find out what their plans are. And if they don’t have any plans, then badger them until they get it done. It’s at this point in time when you realize you have officially switched roles with your parents. “Get your homework done. Clean your room. Take out the trash. Get your retirement, long term care, and estate planning done so that you don’t leave the entire family hanging.”

Have any questions? I know a potent ginger that may be able to answer them.

5 thoughts on “It’s time to have an uncomfortable conversation with your parents

  1. I’m under no delusions that my parents are better off than I am. I think they are good, but I probably do need to have the discussion with them. I know they have a will. I’m pretty sure the only debt they have is their mortgage which they’ve had for 20 years and is a pretty low manageable payment. I do know they are good with healthcare. They are both over 70 and on Medicare. Plus, since my dad was a UAW member for 30 years, the union picks up the entire tab for their supplemental insurance. I think my mom would continue to get that deal if my dad passes away too. Same with his pension check.

    I have no idea about long term care though. That’s the one that scares me the most. I don’t know if long term care insurance is a union benefit that they may have. I doubt if they purchased any on their own.

    So, here’s my question. What if you have this conversation, they say that they do have a plan, explain the plan to you, but you don’t think the plan is adequate? For example, what if they say, “What’s long term care insurance,” or if they didn’t even consider what would happen if they had to go into a nursing home? Can 70-year-olds even get long term care insurance?

  2. […] the original post: It's time to have an uncomfortable conversation with your parents … ← Start Thinking About Retirement […]

  3. We just learned that the long-term care insurance my 70-ish parents have been paying premiums on for 20 years will provide only about $150 a day in coverage. That is a drop in the bucket toward a day’s nursing home care–which I dearly hope they will never need. I’m not Pete, obviously, but my advice to other people worried about their folks: Don’t assume LTC insurance will be of much use.

  4. Thanks for your comment, Karen. The key is that the LTC insurance policy allows the daily benefit to increase on annual basis. LTC is a huge help, if that option is selected at the time of purchase.

  5. Hi Pete,

    Thanks for this article. My wife and I have been having many discussions about this vary topic lately. My in-laws have made a series of poor financial decisions over the past several years and the situation continues to spiral. They will give us an occasional vague update but they have made it abundantly clear that they don’t want our input. At this point for them retirement is off the table as they have cashed out their 401k, sold the house, etc. My question is two fold…

    First, any recommendations on how to reach and help them? There seems to be a lot of pride and embarrassment tied into the mess that they’ve gotten themselves in.

    Second, should they choose to continue in the financial spiral of disaster, can any of their poor choices (read “debt”) come back to haunt us after they are gone?

    Thanks in advance!

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