73% of Americans Haven’t Had This Crucial Talk With Their Parents

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America’s aging adults are facing a whole host of issues that could force their children to become actively involved in their financial lives. More than 40% of baby boomers haven’t saved anything for retirement, according to a 2018 study by the Insured Retirement Institute. Less than one-third of boomers think they’ll have enough money for healthcare expenses, and only 19% said they’ll be able to afford long-term care.

Although most parents don’t want to become a burden on their kids, they may have no choice but to ask for some monetary support from their children. Even older adults who have budgeted for their sunset years might still require assistance because financial decision-making ability declines with age. The question is whether Americans are prepared to step in and help. Are they even talking to their parents about money matters?

To find out, GOBankingRates surveyed 1,001 Americans on whether they’ve had detailed conversations about their parents’ finances. Keep reading to see if people are prepared to take care of their aging parents — and learn how to start the discussion with your own family.

Most Americans Haven’t Discussed Their Aging Parents’ Finances

The survey found that a majority of Americans — 73% — haven’t had extensive financial talks with their aging parents. More than half of the respondents said they don’t think these conversations need to happen until their parents retire, start to have health issues, show signs they need help or actually ask for help. Furthermore, 22% said they don’t think they should ever discuss their parents’ finances because it’s none of their business.

Only 21% of respondents said financial conversations with parents should happen as soon as possible — and it’s the approach that many financial planners advocate. Marguerita Cheng, CEO of Blue Ocean Global Wealth, said the best time to talk with parents about their finances is before a crisis strikes.

“I asked my parents to start planning when my mom was 53 and my dad was 68,” Cheng said, and both parents were in good health.

Discussing sooner rather than later can allow your family to create a plan to deal with issues that your parents will face as they age — such as elder care, insufficient retirement savings or a home that might no longer suit their needs. And, it can help ensure that your parents have essential legal documents prepared, including a will, power of attorney and advance healthcare directive. To be valid, all of these documents must be signed while a person is mentally competent, so it’s crucial to have the conversation early on.

Young Adults and Men Most Likely To Think the Talk Should Happen ASAP

The survey found that men and women were equally unlikely to have talked to their parents about financial matters. However, men were more likely than women to say that these conversations need to happen as soon as possible — 24% vs. 19%, respectively.

Survey Question: When do you think you should have a conversation with your aging parents about their finances?

Not surprisingly, young adults ages 18 to 24 were the least likely of any age group to have discussed family finances — nearly 84% of this age group said they haven’t had detailed conversations with parents about their money. To their credit, though, 18- to 24-year-olds had the highest percentage of respondents who said these conversations need to happen as soon as possible, at 26%.

Adults ages 55 to 64 were the most likely to have had financial talks with their parents. Still, a majority of respondents in this age group — 66% — don’t know the details behind their parents’ finances.

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19% Feel Afraid To Bring Up Mom and Dad’s Money

GOBankingRates’ survey found that many adult children are afraid to bring up the topic of finances with their elderly parents — it’s one of the reasons behind the delay in starting this important conversation. Nearly one in five respondents said fear is the primary thing holding them back.

Survey Question: If you haven’t talked to your aging parents about their finances, what is the reason?

For some respondents, their insufficient knowledge about their parents’ finances isn’t for lack of trying — 23% have attempted to bring up the topic, but their parents refused to talk. However, 37% of respondents didn’t think their aging parents’ finances are an important topic to discuss, which was the most common reason selected in GOBankingRates’ survey.

The topic of aging parents’ finances is important, though, because most parents anticipate their children will be involved in their finances as they age. A 2016 study by Fidelity Investments found that 69% of parents expect one of their children to help manage their finances in retirement, 72% expect one of their children to be a caregiver if necessary, and 92% expect one of their children to be the executor of their estate when they die.

Wouldn’t you prefer to know now if your parents want you to be involved with their finances and care, rather than at the moment you have to step in and help? “Ignoring something you know is guaranteed to happen is not very smart,” said Daniel Lash, a partner with VLP Financial Advisors. “Look at all the things that can happen with lack of planning.”

The survey found that respondents ages 45 to 54 were the most likely to say that they haven’t talked to their aging parents about finances because they’re afraid to bring up the topic. Men were also more likely than women to say the same thing. Young adults ages 18 to 24 were the most likely to believe that their parents’ finances don’t seem important to discuss, with about 43% of this age group choosing that response. And, adults 65 and older were more likely than other age groups to say that talking about money is taboo in their family, or that they have tried to bring up the subject but their parents refused to talk about finances.

If you’re trying to figure out how to talk to elderly parents about finances, focus on how having these discussions can allow them to voice their opinions. “If you don’t want to have people deciding for you, it’s better to have these conversations,” Cheng said. “When you’re proactive, you have more control.”

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1 in 4 Americans Don’t Know How To Start the Conversation

GOBankingRates’ survey asked respondents to share the reason why they’re afraid to talk to their parents about finances. The top answer — with 25% of respondents choosing this option — showed that Americans are fearful because they don’t know how to spark the discussion.

Americans also said they didn’t want their parents to think they’re being nosy or after their money, drawing 22% and 21% of the responses, respectively. Respondents were less likely to think that having financial talks would make their parents mad or hurt their relationship with them, at 15% and 13%, respectively.

Survey Question: If you’re afraid to have a conversation with your aging parents about their finances, what best describes the reason why?

Not knowing how to start the conversation was the top reason among all age groups except for one — adults 65 and older were more worried that their parents would think they’re after their money.

Men were more likely than women to say that they’re afraid to talk to aging parents about their finances because they think it’d hurt their relationship. Women were also slightly more likely than men to say that they don’t know how to start the conversation about their parents’ finances.

31% Would Rather Discuss Their Parents’ Health Issues

The survey found that Americans would rather talk to their parents about other touchy topics than their finances. The most common topic that respondents said they’d be more comfortable discussing was their parents’ health issues.

After health issues, respondents would rather talk with their parents about politics than money, with 29% choosing this response. One in five respondents said they’d rather discuss aging. Surprisingly, 10% said they’re more comfortable talking about their romantic life with their parents — and 9% said they would rather discuss their parents’ romantic life than their parents’ finances.

Although many Americans are more comfortable talking about their parents’ health issues, they don’t want to dig into the financial side of those issues. The cost of their parents’ healthcare needs is the top financial topic that respondents said they dread discussing with their parents, GOBankingRates’ survey found. The second-most dreaded financial topic is managing parents’ assets, followed by their wills and children’s inheritance.

Survey Question: Which financial topic do you dread most discussing with your aging parents?

The survey found that the topics respondents were more comfortable discussing varied by age. Respondents ages 18 to 24 and ages 35 to 44 were more likely to be comfortable discussing politics than finances with their parents. Adults ages 65 and older were more comfortable than other age groups with discussing aging. And, adults ages 18 to 24 were more likely than any other age group to say they’d rather talk about their own romantic life than their parents’ finances.

How To Talk To Aging Parents About Their Finances

Knowing how to talk to elderly parents about finances doesn’t have to be as difficult or scary as it might seem. There are actually several effective ways to start the conversation:

• You could ask for their input on your own finances. For example, you could tell them that you’re thinking about meeting with an attorney to draft a will and other estate-planning documents, and you want to know what they’ve done along those lines. “It’s like they’re giving you advice because that’s what parents are good at — giving advice,” Lash said. The goal is to open the door to discussions about what sort of planning they’ve done.
• Look for articles about scams or elder fraud that you could share with your parents. John Cooper, a certified financial planner with Greenwood Capital, said talking to your parents about scams that target older adults could open the door to discussions about what they could do to protect themselves. You could discuss common red flags, and you could also help your parents check their credit report to look for signs of fraud on their accounts.
• Use a life event as a conversation starter. For example, if a friend or family member dies, you could talk about how their planning or lack of planning affected the loved ones they left behind, Cheng said.
• Getting a third party involved with the conversation can help. Asking a trusted individual — such as a financial professional or trusted family friend — to encourage your parents to talk with you might be easier than asking them directly, Cheng said.

However, before talking to your parents, you should talk to your siblings, Cooper said. It’s important to decide which child parents will be most receptive to discussing financial matters with, he said.

Most importantly, recognize that it might take time when dealing with aging parents and getting them to open up about their finances. “Don’t expect your parents to do everything all at once,” Cheng said. “That’s putting way too much pressure on them.”

Ask your parents to share a little bit of information at a time, and keep trying different approaches if they’re reluctant to talk.

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Methodology: GOBankingRates asked 1,001 adults the following six questions: 1) When do you think you should have a conversation with your aging parents about their finances? 2) Have you had detailed conversations with your aging parents about their finances? 3) If you haven’t talked to your aging parents about their finances, what is the reason? 4) If you’re afraid to have a conversation with your aging parents about their finances, what best describes the reason why? 5) Which financial topic do you dread most discussing with your aging parents? 6) Which would you be more comfortable talking to your parents about than their finances? Responses were collected from Dec. 22, 2017, through Dec. 24, 2017. There is a margin of error of 6.8%. 

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