Aging baby boomers and their adult children often find it difficult to engage in meaningful family conversations about parental retirement plans. Sensitive topics like housing, finances, health status, and the ability to continue driving are a few topics that can trigger strong emotional responses.
Kiplinger.com recently published an article on this topic titled, “10 Ways to Talk to Your Aging Parents About Their Finances.” Author Cameron Huddleston wrote a book on the subject, and she has several productive guidelines to help adult children broach the subject of financial planning with their parents.
This is an important topic that I deal with often in my work as a certified reverse mortgage professional (CRMP). Since most borrowers need to be 62 or older in order to qualify for a home equity conversion mortgage (HECM) or other type of reverse mortgage, I often find myself speaking with the adult children of potential borrowers as part of the loan process.
Listed below are three starting points that adult children may find helpful when trying to open a dialogue with their parents about retirement planning.
#1. Select the right time and place to approach the subject of long-term planning. This can vary depending on the number and proximity of family members as well as the frequency with which they meet. Major family gatherings like birthdays, Christmas, or Thanksgiving are probably not the best setting.
A better approach is to select a day and time when the parents are relaxed and not distracted by competing activities. Easing into the conversation may help the parents to respond favorably. Adult children should give some thought to several different approaches that they might try over a period of time if they meet with initial resistance.
#2. A direct approach is recommended so that parents understand the genuine interest of their children in helping them plan for a healthy retirement. Being clear that the discussion is intended to help all family members plan for a successful aging process may result in more productive talks.
Aging in place is a priority for many aging homeowners today. The U.S. Center for Disease Control (CDC) defines aging in place as “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.” Discussing how the adult children might help parents stay in their own home for as long as possible is likely to meet with a positive response.
#3. Start the conversation without focusing on money specifically. Many older Americans are cautious about their finances, and they may be reluctant to reveal the specifics of their financial status even within the family. Less threatening ways to address the subject would be to ask about where the parents want to live in retirement, what types of activities they want to pursue, and the types of local medical or cultural services that are important to them.
Addressing the Financial Needs of Aging Parents
Even though it is difficult to talk about money with aging parents, if done correctly the conversations can help all family members strengthen their bonds and meet their common goals.
Many aging homeowners in the Central Coast area of California—including Monterey, the San Jose area, and Salinas—have the benefit of long-term price appreciation in the value of their home. In those instances where the homeowner is 62 or older and has significant equity in their home, a reverse mortgage can be considered as one potential way to help finance retirement needs for aging parents.
I am available to speak with older homeowners and their adult children about how a reverse mortgage might serve their needs.