How to Talk About Money With Aging Parents

With life expectancy and living costs on the rise, retirement savings and government assistance for seniors may no longer be enough to cover some Canadians’ expenses as they age.

Roughly 3 in 10 Canadians (29%) currently assist or plan to assist their parents financially, according to a NerdWallet survey of 1,044 Canadian adults, conducted by The Harris Poll from April 1-3, 2024.

It’s natural to want to help our parents as they age — doing yard work or driving to a doctor’s appointment. But if parents might need financial assistance, it’s best to discuss details well in advance.

“It’s really hard to provide for your own family and then the additional financial pressure to provide for your aging parents can be really tough,” says Sandy Yong, a Toronto-based personal finance expert and author of “The Money Master.”

This may be one reason why 39% of Canadians say they don’t assist their parents financially and don’t plan to start, according to the NerdWallet survey.

Providing financial support to anyone can be tricky, and that’s especially true when it’s family. While your heart might be in the right place, taking on parental expenses without firm boundaries can put your financial wellness and relationships at risk.

Here are six tips for navigating a conversation about finances with your older loved ones.

1. Understand your own financial situation

If you have your own family and future expenses to budget for (daycare, health care, college tuition, etc.), weigh those costs against any future support your parents might need, says Natasha Knox, a financial therapist and planner, and founder of Alaphia Financial Wellness based in Vancouver.

“That’s step one. Figure out your own position and then figure out the degree (that you can help) within your own position,” Knox says.

If you manage your finances with a partner, include them in discussions about what future support of aging parents might look like. If you’re both in agreement you want to help, start setting aside some money each month, live below your means and take money out of other discretionary spending pots that won’t compromise your own financial goals, Knox advises.

2. Get on the same page with your siblings

If you have siblings, it’s a good idea to discuss how much financial support you can each contribute to parents later on, Yong says.

You and your siblings should decide if you’ll contribute equally so the responsibility is shared. Or you might agree that one sibling who can afford to help financially takes that on while another sibling who lives close by helps with caregiving duties so all of the responsibility isn’t falling on the same person.

3. Approach the conversation with compassion

Parents are sometimes reluctant to discuss money matters because they don’t want to burden their children, Knox says. Plus, some parents might feel shame about needing help and hesitate to ask for it even if they’re in a tough spot. If your parents have traditionally been tight-lipped about money, that’s unlikely to change overnight, she adds.

“Enter into the conversation with the right intentions, with a lot of love, [and also] hold space for them to be uncomfortable,” Knox says. “Maybe you’ll get good answers, maybe you won’t. But I think keeping it short and sweet is a good start and allowing them to ease into the comfort of talking about the numbers is another thing. We definitely don’t want to start with that day one.”

4. Share details of your own financial plan

Your parents might be more open to sharing about their money situation if you talk about your own financial plans, Yong and Knox both say. It’s also important to know whether your parents have an updated estate plan, including a written will, power of attorney, and advanced medical directives.

If you ease into the discussion by sharing about your own estate plan, your parents may be more willing to chime in with their own, Knox says.

It’s also important to find out where important documents are stored and who their lawyer is, if they have one. Ask your parents where they keep financial and estate plan documents so that you can find them quickly, Yong says.

5. Ask about housing and health care

Planning for your parents’ future needs involves understanding what expenses lie ahead. Here are the three biggest considerations:

Housing: Will your parents remain in their current home? Does that home need renovations so they can age in place, or will a move to a long-term care facility be necessary due to health or mobility issues? Are they still making mortgage payments, or will the home be paid off? It’s critical to understand what their current monthly living expenses include and how that might shift as they age.
Health care: Out-of-pocket medical expenses that aren’t covered by national or provincial health plans can add up fast. Consider dental care, hearing and vision care, medications and preventative care as well.
Long-term care: Will your parents eventually need to move into a nursing home or require in-home care? Both options can be extremely expensive, and their current health plan may not cover this level of care. Do they have long-term care insurance in place or savings set aside to pay for this expense?

6. Set shame-free boundaries around what you can’t do

If you’re on a tight budget, be upfront about it. The earlier you have a conversation and are transparent, the better, Yong says. The key is to be clear about your limitations without making your parents feel as if they’re a burden.

Consider lending a hand in other meaningful ways, such as managing their bills, helping with household chores, connecting them with government benefits or helping them downsize into a smaller home, for example.

You can also suggest that they consult with a financial advisor or lawyer for guidance on how to bridge financial gaps and plan ahead for retirement, Yong adds.