Talking to Your Parents About Money
Money is always a touchy subject - particularly when you are an adult child trying to see if your adult parents need help. I was featured in an article in Money Magazine this month about this very subject: "How to Talk Money with Mom and Dad".
The market plunge has not just effected you, but everyone around you. For elderly parents, they likely won't make up 20% to 40% losses in their lifetimes. Their financial pie is smaller, but their potential long terms needs are only growing in cost. Couple this with the fact that social security payments are not increasing this year, and likely not next , and mom and dad might be facing a financial bind.
One key to remember is that while your parents may be elderly, unless incompetent, they are still entitled to make their own decisions - even if that means they are making bad ones in your opinion (I suggest to adult children that they think back to their teenage years when their parents supported their decisions - misguided or not). Your role may be to educate your parents about risks they may not be aware of (stairs in the house, need for a caregiver, risky investments, etc.) and suggest solutions to those risks. To do that, you may need to educate yourself as to what are true costs of aging, and what might be hype (ie: if dad goes into a nursing home, mom will definitely lose the house). At our office we facilitate these conversations by putting recommendations in writing to be circulated to all family members, and having the parents and children attend at least one meeting (in person or on a conference call) to get everyone on the same page in terms of asset protection planning.
