Can you help your parents—
without derailing your own retirement?

By Kelly Greene, TIAA Senior Director and co-author of the New York Times best-seller The Wall Street Journal Complete Retirement Guidebook
My kids and I recently caught up with friends sheltering in a sleepy coastal community with their retired parents. For now, Camp Grandma is a great help, but our friends are noticing subtle changes in their parents’ health—and looking for ways to shift savings to buy a small place nearby so they are ready to help when needed.
 
Many adult children spending extended time with older parents in the pandemic are coming to terms with their parents’ needs—along with worries that spending to keep parents, or other older family members, comfortable could come at the expense of their own financial future.
 
When you search online for caregiving resources, meal delivery and health services typically pop up first. But we also need resources and strategies to grapple with the financial piece as we find ourselves in shifting roles. Here are three ways to get started:
 
Talk about it. If at all possible, start a conversation now with your parents about their financial situation and yours. This sounds so simple, but it can feel so hard. Research that TIAA did a few years ago, surveying a large group of parents and adult children separately, found that while both generations consider financial conversations to be very important (74% and 87%, respectively), surprisingly few people surveyed in either generation are very likely to start a conversation about any financial topic (just 11% of parents and 37% of adult children).1
 
So making a plan for a financial discussion in advance—choosing a specific time, date and place that puts everyone at as much ease as possible—might help. There are many natural openers to talk about money right now, from the stock market’s seesawing to stimulus checks ending and grocery prices going up.
 
If you want to get more detailed, we put together two guides—one for questions children can ask parents, and a similar list for parents to ask children. They are designed to make sure both generations have a sense of the others’ financial resources, outlook and expectations—and wishes for the future. What matters most is not the specific questions you ask but gaining a sense of your parents’ preferences and finding ways to talk openly about how you are—or possibly are not—in a position to help.
 
Moving in together? Make a plan. Even before the pandemic hit, more parents were moving in with their adult children: 14% of adults living in someone else’s house were the parents of the head of household—double the portion in 1995.2 And intergenerational moves can work out wonderfully: One of my friends tells great stories on long walks about her abuela, whom she lived with for her entire childhood.
 
But even if you’re living together temporarily, it’s good to talk about some key issues up front—especially if the reason for the move is a change in your parent’s health or financial situation. A few questions to help you get started:
 
  • Is your parent financially independent, or will they need your support? It helps for all involved to be clear about what they can, and are willing, to spend on household expenses and other costs.
  • Do you need to make any modifications? If so, who will pay for them, and how?
 
One other note: Many parents may have preferred physically visiting a bank branch—until now. But the combination of living together and the current situation may make your parents feel more comfortable handling finances online, and with providing you with their passwords—or at least with access to where they keep them—in case their health changes.
 
And as you make the transition, you may want to reassess your own cash-flow plan, and contributions to savings, either on your own or with the help of a financial advisor, to make sure you stay on track while gaining a new household member. This could help you feel more comfortable in advance of the move, and would also be worth checking in on a few months afterward.
 
Recognize your limits, and look for a work-around. Sometimes we just have to agree to disagree with our parents, especially when it comes to spending. If you can’t persuade a parent to see the value of investing in physical therapy or surgery that would help them keep using stairs, maybe you can find a stair lift on eBay instead that helps them stay in their own home.

If you worry about what the experts refer to as “cognitive risk,” consider asking your parents to introduce you to any financial professionals they work with and share the location of paperwork and passwords. They may also want to consider using annuities as a tool for putting their retirement income on autopilot—or you may want to think about it for yourself down the road.

A financial advisor might be able to provide other strategies you haven’t thought of yet—or help your parents come up with strategies, too.

But if all else fails… we’ve all shrugged and said some version of, “Kids. What can you do?” when offering a cookie ends in a meltdown. On a good day, we smile. Even on a bad day, we still love them.

Well, parents. What can you do?
 
 
 
This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.
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