4 financial questions to ask your aging parent

It’s important to consider finances when planning for retirement, and determining one’s financial situation sooner rather than later helps support confident and secure retirement planning while reducing potential stress down the road.

If your aging parent has reached out to you looking for some support in managing their finances or planning for a retirement living lifestyle, consider asking them these four questions.

1. Where are your financial documents stored?
It’s important for both you and your parent to know where their financial documents are stored to mitigate having to dig around the house later should an issue arise. Money Sense recommends asking where documents like life insurance policies and investment statements are stored, along with a list of all bank accounts, PINs and contact information for the advisors that handle your parent’s finances. If your parent is hesitant about sharing their financial information with you, assure them that should they choose to, you will ensure it is kept confidential, stored somewhere safe and will not be used without their permission. You can also discuss the importance of sharing such information with someone they trust, should they ever experience a health incident and need someone to help manage their finances in a hurry.

“Explain that if something were to happen to your parent, knowing where the important papers are will help family to step in and act as quickly and easily as possible,” said Lise Andreana, author of “Financial Care for Your Aging Parent,” in an interview with Money Sense.

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Talking about finances now can help reduce stress down the road.

2. Does your retirement plan make room for unexpected expenses?
When planning for the future, it is important to consider unexpected expenses, such as health care services. Ask your parent if their financial plan includes extra savings for contingencies, advises Newport Private Wealth. Once you factor in these additional expenses, talk with your parent about how they would like to map out their finances and check in about whether enough money will be allocated to support an active and healthy lifestyle.

3. Do you have an up-to-date will?
Discussing wills is never an ideal situation, but it’s an important component of your parent’s financial situation that should be addressed. If your parent already has a will, ask how old it is; Money Sense notes that a will should never be more than five years old. And as The Globe and Mail mentions, this conversation is also a good opportunity to discuss your parent’s advanced directive wishes.

4. Have your investments been reviewed?
Your parent may have a portfolio of investments with terms that suited their working lifestyle, however, if they haven’t yet done so, recommend reviewing these terms together when planning for their retirement, noted Newport Private Wealth. Talk to your parent about any investments they currently hold and if the terms may need to be updated.

If you and your parent are trying to determine if they can afford a retirement community, use Chartwell’s Budget Assistant Tool to help calculate their current expenses and projected income from the sale of their home.