Being involved in your parents’ retirement finances is just as crucial as their involvement was in your upbringing. This realization hit home for me during a recent conversation with my parents.
Despite starting their retirement planning later in life, they managed to set things up efficiently. The reason behind their late start is a different story, but what’s important here is the approach we need to take. I want to share a quote from one of the financial advisors in my trusted circle:
“In my practice, I’ve seen the consequences when families delay involvement in their aging parents’ finances. Issues like missed bill payments, fraudulent activities, and unrecognized debts often arise, leading to significant stress and financial instability. Addressing these concerns early can prevent many of these problems, ensuring that parents’ financial affairs are managed smoothly and securely. It’s crucial to have these conversations sooner rather than later to safeguard their financial wee-being and your peace of mind.”
We owe it to our parents to offer guidance and perspectives, just as they did for us. You might encounter resistance, with parents asserting their independence, saying, “I’m an adult and I’ve made it this far.” It’s vital to approach this topic with care and love. You can’t be sure your parents are prepared for a successful retirement unless you sit down with them, discuss their plans, and review their financial situation.
In my profession, I’ve seen too many families act out of necessity when the money runs out, rather than proactively building a robust safety net. Proactive planning always results in a stronger financial position which results in less stress on the parent.
I now have a thorough understanding of my parents’ finances, as I am designated to be their Power of Attorney if needed. Having conversations about the financial plan and position allowed me to make suggestions like a Home Equity Conversion Mortgage. I could not have had a confident conversation about these things if I was not versed in the subject myself. So, if you’re not, no worries. There’s no shame in having a professional help. Don’t guess, just rest a little easier knowing what the situation is and if it needs addressing.
It’s essential to check in regularly with your parents. A simple “How are you?” can reveal important aspects of their financial health. For instance, I discovered that one of their accounts had lost money and we could correct that position. These conversations are crucial; always ask, ask, and ask again.
One discussion we had was about a substantial bank account earning a mere half percent interest. We explored better options that would still offer things that were important to them. It’s not about criticizing their choices, but helping them make informed decisions.
Key Takeaways:
Start the Conversation with Care: Approach financial discussions with love and understanding.
Regular Check-ins: Frequently ask how they are doing and if their financial situation is stable.
Offer Guidance: Help them explore better financial options and ensure they are aware of all available resources.
Proactive Planning: Look at possible bumps and curves and work together to head them off early. There’s nothing wrong with pivoting to another option that may work better.
Taking these steps will not only help ensure your parents’ financial stability but also strengthen your relationship with them. Being involved in their retirement planning is one of the most meaningful ways to show your appreciation and love.
Donald Battista, NMLS ID 2030959. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Arizona Mortgage Banker License 0926603. Florida Mortgage Lender Servicer License MLD1827. Louisiana Residential Mortgage Lending License 1025894. Oklahoma Mortgage Lender License ML012498. Texas Mortgage Banker Registration 1025894. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org | Equal Housing Lender