According to the National Council on Aging, 25 million Americans aged 65 or older are economically insecure—living at or below 250 percent of the federal poverty level. One-third of senior households have no money left over each month or are in debt after meeting essential expenses. In 2015, 2.9 million households with a senior 65 and older experienced food insecurity.
What about your senior parent or parents? Do you know their financial state? Would a downturn in health put them in a financial crisis? What plans have been made for their future? Here are four ways to help you talk to your senior parent about finances.
How to Talk to Your Senior Parent About Finances
1. Talk Sooner Rather Than Later
Though it may seem intrusive, you should begin talking sooner rather than later about their finances. If you start too late, financial problems will multiply, and your parents’ ability to understand their situation could be diminished.
People with dementia or other cognitive challenges often find finances a difficult thing to manage, but even people without cognitive difficulties who can manage their own finances may not anticipate expenses for future healthcare and residential care needs.
It would also be a good idea to talk to your parents’ physician for his or her assessment of your senior loved one’s ability to handle financial details.
2. Talk After Assessing and Preparing
Family members should begin reviewing and assessing their seniors’ financial situation as their loved ones’ health starts to decline. Plenty of peripheral signs exist that show that Mom or Dad are losing their ability to manage their finances. For example, while visiting the home, you notice:
- Housekeeping standards have declined
- Food gone bad in the refrigerator
- Items in disrepair
- Poor personal hygiene
- Medications not taken
These are detail-oriented activities, and managing finances is all about handling details. Other things you may notice specific to finances:
- Unopened bills
- Overdue notices
- Mom or Dad complaining about being short of cash
In addition, your parents’ checkbooks can reveal expensive purchases they would not normally make, as well as math errors, regular monthly payments that have been missed, or a number of checks to suspicious charities and causes.
The parents’ caller ID logs may reveal numbers for creditors and collection agencies repeatedly cropping up, as well as calls from credit card companies.
3. Talk with Compassion and Understanding and Offer Solutions
Admitting a decline in their ability to manage their money puts many senior adults on the defensive if not handled correctly. When you talk to your senior parent about finances, look for openings where you may offer help— a moment in the home when Mom or Dad is puzzling over a bill. Ask if they mind if you take a look, and evaluate the response. If it is positive, you might mention you have noticed some unopened mail that looks like bills as well and offer to assist.
From that point, the discussion can become an open and honest conversation (in an undemanding tone) about the money problems you see brewing.
Offer solutions and options, and listen to your senior loved ones’ responses. Explain there are many things to help improve their finances, or at least slow some of their expenditures. For example, you could place your name on their checking account, have your parents grant financial power of attorney to someone in the family, and place them on a no-call list to thwart scammers.
Do not put off discussions about financial matters, but do not blurt out all the challenges at one time. Let your parents absorb and discuss options over as many conversations as they need. If you push too hard, they could become confused or push back.
4. Talk with a Professional in the Conversation
Uncertainty about the future and how to best plan for it can cause stress, family arguments, and the inability to make necessary decisions.
There are a number of complex and difficult choices to be made involving finances for senior adults:
- What is their current financial status?
- How do you pare down expenses?
- Are there financial documents to find and organize?
- To which benefits may your seniors be entitled?
- What other financial help is available to seniors?
- Can you anticipate some of the future health care needs and costs?
- Will home health be needed?
- Is a new life in a senior community a good option?
All of these questions and more can be discussed in consultation with a geriatric care manager, a skilled professional who knows the ins and outs of many issues facing seniors and their families. With their experience and knowledge, they can solve many challenges, reduce stress, and be an unbiased source of information and assistance when you talk to your senior parent about finances.
As our parents age, it is important to stay in the know. Bethesda has programs to support family caregivers and adult children to lighten the burden. Contact us to learn more about our Senior Support Solutions and Care Management programs.