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Money Matters: Talking to Seniors About Their Finances

It can be difficult to have conversations about money

No one wants to talk about finances, especially with their parents. Our attitudes about financial matters are complicated and deeply personal. As a result, the topic can be very awkward and difficult to discuss, especially among our nearest and dearest. Nevertheless, broaching the topic of money management is essential to ensure that your loved ones’ assets are safe and that they have enough money to live on.

I still remember the story told over a family Christmas about how horrified my parents were to learn that my grandparents (one of their parents) had suddenly decided to give to a lot of money to Billy Graham. The fact that my grandparents had never given to an evangelist before was worrisome. In addition, they were surprisingly proud to show us the “expensive” trinket they had received for their donation. My parents were perplexed about how to address this change in behavior.

44% of Americans believe personal finances are the most challenging topic to discuss with other people.

Wells Fargo (WFC) released a study in 2014 revealing that 44% of Americans believe personal finances are the most challenging topic to discuss with other people. It ranked above death (38%), politics (35%), and even religion (32%).

The conversation about finances and financial planning in later life can make people feel overwhelmed and fearful that they are losing control. It is important to be sensitive to this and listen to what is being said, as well as the experiences and needs that are expressed. Here is a suggested phrase to use to initiate the conversation:

I’m worried that if something happens to you, I won’t know what to do.

This statement communicates concern but also aligns your goals with those of your loved ones. Communicating that you are “on their team” is an important step in getting buy-in and cooperation.

Financial decline is subtler than physical decline.

It is important to have a plan with parents about their finances as they age. It is also essential to be aware of any potential financial decline. Financial decline is subtler than physical decline and can be impacted by factors such as depression or medication side effects. It could also be an early sign of dementia, signaling the need for more testing. Knowing exactly what is causing the change in behavior or difficulties with handling finances may lead to urgent decisions, such as protecting assets or highlighting the need for near-future care planning.

The following are warning signs that someone you love may be struggling with financial matters and at risk for financial scams, overspending or missing payments and lowering their credit score:

  1. Watch for mistakes in everyday arithmetic, such as struggling with calculating a tip or counting change.
  2. Do you hear them talking about investments that could be constituted as fraud or a scam?
  3. Are there bills piling up and payments being missed?
  4. Do tasks such as preparing bills to mail, tracking statements, and organizing paperwork seem like onerous tasks?
  5. Is there a change in their ability to understand health care expenses or bank statements?

Watching for changes in patterns of behavior related to money is critical when protecting your parents’ best interests.

Once you have establish trust, you may want to continue the conversation with the support of a professional, such as a Certified Financial Planner or an accountant (CPA), or even a trusted banker. In this process, make sure not to criticize, condescend, or blame them. Begin by identifying all existing accounts, including pensions (the Pension Benefit Guaranty Corporation’s website can help). Obtain a copy (free) of your parents’ credit reports. This can help you track down their existing credit cards and loans and will help uncover or prevent identity theft. Encourage your parents to consult you before investing in any new annuities, insurance products, or brokerage accounts. Finally, don’t forget to keep meticulous records of all activities and communicate with other family members to prevent legal action from an angry relative.

There are other professionals who specialize in assisting with money matters, such as elder care attorneys, private fiduciaries, medical billing advocates, and estate planners. (See the C2it Health Translator and Professional Resources for more information.) They help to provide unbiased, independent advice. Even though it’s uncomfortable, recognizing that someone you love isn’t able to handle their finances any longer or is in financial trouble already is an opportunity to act early to protect their independence and safety.

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References:

Goetting and Schmall, “Talking with Aging Parents about Finances”, Montana State University Extension

J. Opdyke, “How to Talk to Your Parents about Money”, Aug 2011, WSJ

T. Beck, “Five Signs Your Parents Need Help with Financial Decisions”, Oct 2015,  WSJ

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