How you could help your elderly parents face their financial needs?
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What we'll cover
- How to have ‘the talk’
- How to help financially without spending money
- Hunt the documents
How to have ‘the talk’
The time has come for ‘the talk.’
We’re not talking about the toe-curlingly embarrassing ‘birds and bees’ conversation your parents had with you when you were growing up. No, this time it’s about a subject almost as taboo – your parents and their money.
Funny isn’t it, how money makes the world go around, yet it’s a subject from which many of us shy away. But having the money talk with your parents could be critically important. When you were growing up, adults may have been in charge when it came to your finances. But that was then, and this is now.
Their life is changing, and although they navigated their way into retirement successfully it doesn’t necessarily mean they may have planned further ahead. As they age, their needs and goals will change, so now’s the time to talk these through with them to help ensure they have a plan in place.
Your opening gambit
Going in all guns blazing is not the best tactic to adopt (when is it ever?), so it might be a better idea to adopt the softly, softly approach when beginning ‘the talk’ with your parents. You could kick off by talking about the financial plans you’re making for your retirement. This could then naturally lead to asking them what plans they have in place for the future.
It’s not a comfortable conversation to have, but taking the time to ask them about their needs and goals will help you understand where they stand. You could start by asking:
- Who will care for them when they’re older?
- Where do they want to live if they can no longer look after themselves?
- Who do they want to make decisions on their behalf when they no longer can?
- How are they placed financially for their future needs?
Although you might have grown up thinking your parents are invincible, they are only human and could well experience poor health as they age. That could lead to the need for a care package of some sort, which will cost money.
On average, home care could cost as much as £1,600 per week, and residential care could potentially reach around £600 per week. If your parents own their property or have savings exceeding £23,250, they may not be entitled to help with the cost of their care, which is why having ‘the talk’ could be such a good idea.
You could help them find out where their savings are and what they amount to, what current insurance policies (e.g., life insurance, medical insurance etc.) they have, if they have any other investments, and whether they own their home outright. This will give them a good picture of determining their financial health and whether it’s sufficient to cover their future needs and goals.
Financial help doesn’t always mean money
If it looks likely that there’ll be a financial issue to address later in your parents’ lives, there are some practical things you could suggest that can help – and may not involve you opening your wallet:
- Downsizing – moving to a smaller home could help them financially by reducing running costs. It could also reduce upkeep costs.
- Relocation – if your parents currently live in a high-cost-of-living area, moving could help reduce their living costs. Also, moving them closer to you means you’ll be on hand to help later in life if that’s what they want.
- Move in with you – this won’t be for everyone, but it’s something you could consider.
- Create a budget – helping them work through a budget will identify areas where they can cut costs if they need to.
Don’t end up playing hunt the documents
Talking to your parents about their financial needs is just the start.
You may also want to help support them in organising their financial documents. It can be helpful to keep them somewhere accessible where those responsible can easily find them.
It could also be a good idea to create a list of all the contact numbers for these, so your parents can keep it close to hand should they need them.
Together, you’ll be able to build a picture of the financial cover your parents have in place for later life.
The bottom line
It’s important to remember that ‘the talk’ isn’t a conversation about how much money your parents have and how much you’re likely to inherit. Instead, it’s all about how the family can prepare so that they can act in accordance with your parent’s needs and goals.
The sooner you talk, the easier it will be, so put the kettle on, take a deep breath and start.
The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.
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