Parents--should I ask about their finances?

[RosemaryS-F]

My dad is set to retire, and as far as I know, they really don't have any savings. This is incredible to me. I make half what they make and have two savings accounts and a money market, plus retirement savings. I am concerned about their situation, and I am also concerned about MY situation should anything happen to them. Has anyone here dealt with their parents and their parents finances before, and if so, what are good, respectful questions to ask?

[zinemama]

It really depends. How open are folks in your family about money? Do you have reason to think they are or will be struggling? Have they given any indication of that?

[karkli]

When you say that your dad is "set to retire", do you mean that he is actually planning to retire now, or that he is of retirement age and/or is eligible for a retirement pension/social security?

If its the former, I would think it would be easy to nonchalantly bring up the subject.

"I'm so happy that you're in a position to be able to retire and spend more of your time enjoying your time. What do you plan to do once you're no longer working? With your retirement on the horizon, I've been thinking about my own eventual retirement. Would you mind sharing how much you/you and mom have saved to fund yours? I wonder if I/SO and I am on the right track and would really love some insight from you..."

You might not say it exactly like that (WHO talks like that? ), but something along those lines. By the by, if you're questioning their financial situation, I would prepare yourself to share a bit about your own. Quid pro quo.

If it's the latter situation, I wouldn't necessarily assume that he is actually considering retiring at this point in time. Many people who have not saved for retirement or have not saved sufficiently plan to work as long as they are physically able and then cross their fingers that social security will cover their expenses for the remainder of their lives.

Of course, if that is his plan, depending on your relationship with him and how comfortable you are with it, now might be a GREAT time to start a financial dialog with him. He may still have time to better prepare himself for the future.

[UberMama]

Depends on your relationship with him. For me, I could easily ask my Dad about his finances and it be an everyday conversation (finances aren't taboo between us, never have been).

That said, if he did retire, accrued massive debt and then passed on, his estate (whatever he owned) would be sold to pay those bills. The creditors wouldn't come after you, even if you were the sole beneficiary. So, you may lose out on not getting money from this or that that is sold, but you won't be OUT money yourself or shouldn't be from what I understand.

[ChristyMarie]

Originally Posted by UberMama

That said, if he did retire, accrued massive debt and then passed on, his estate (whatever he owned) would be sold to pay those bills. The creditors wouldn't come after you, even if you were the sole beneficiary. So, you may lose out on not getting money from this or that that is sold, but you won't be OUT money yourself or shouldn't be from what I understand.

I think she's probably more concerned with possibly having to help support them.

[Mosaic]

This is an extremely important and difficult conversation to have, and it's a conversation that can easily takes months or even years to sort out fully. Over the past several years, we have been broaching the subject with our parents in order to get a good idea of how they envision their future, what plans they are making to help that future become a reality, etc. Originally I think the topic came up because we were asking for advice and knowledge from someone who had BTDT: do they have a will, an estate plan, a retirement plan, emergency savings? How did they set it up and what changes have they made over the years as their situations have changed? This not only informed our decisions but also gave us some insight on their priorities and plans. We also talked about this, sadly, when grandparents passed away or others we knew became sick or incapacitated: talking about someone else sorta opened the door to talking about what you would do similarly or differently. And (un)fortunately, we have all learned from others' mistakes.

What I realized in these conversations is that while yes, it does boil down to money, it's REALLY about quality of life and planning for the unexpected but inevitable changes that older age brings. What do they want, what DON'T they want, and what can we do to make sure that these things happen. And just when we think we have something almost figured out, everything changes: MIL/FIL divorced in their 60s, and my parents' house was flooded last year, plunging them tens of thousands of dollars into debt merely 1 month after my mother retired.

The only advice I can give after this superlong reply is to broach the subject focusing on how to make their wishes a reality, and expect this to be an ongoing conversation. Good luck!

[SuzyLee]

Not finances exactly, but I have asked all our parents and IL's if they have wills/living wills/medical directives, and where those documents are stored. This has led to some discussion of the actual finances.

I know my mom asked my g'pa for info on where/how he kept track of his various acounts. If he passed, she needs to know all that info in order to handle his affairs.

ETA: also, you can broach how he feels about possibly needing long term care. That will drain savings fast. If he is adament against LTC you can ask him if he has plans to fund in-home care, etc.

[RosemaryS-F]

Thanks, everyone. My dad will be 65 next year and plans to retire at 66 so that he can take that last year and use all the $ to pay off their house and also to get $250/mo more in Social Security. So you see, I have talked a little about it with them. I think what will make it hard is that I sort of sit in judgment of how they spend their money every month. In 30 minutes I could shave off the $250 from what they currently spend each month just by suggesting a new car/house insurance company and maybe not going out EVERY DAY to buy groceries for that day. But like I said, I'm a bit incredulous/judgmental about their habits...

[_ktg_]

I saw another poster mention it, and I wanted to just add besides funding for their retirement/expected lifestyle, its always good to have discussions about financially related topics like LTC, nursing homes, advanced directives etc...

Suprisingly I've had more conversations with my parents about this vs. their finances for retirement since my grandma was diagnosed with a terrible disease in her mid 60's and all the craziness that ensued with trying to get her LTC insurance, finding the right home, trying to get her care wishes documented clearly before the disease took hold.

[NightOwlwithowlet]

You can talk to them, but there really isn't much you can do about. I'm pretty sure my mom has blown through her savings and is subsidizing her COL with credit cards. She is 72, her health is deteriorating, and she is working full time. Sadly, this is a repeat of her mother did, that she wore she would never do........

What I have done is made it clear I will not be responsible for her debt. I will help with her living expenses and so will some of my sisters, but she needs to start making some hard choices about how she wants to live the rest of her life.

DH and I have just in our late 30's and early 40's started to pay off our debt (18,000 in credit cards and 8,000 in other debt in two years ) and started saving.