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May 9, 2008

"Mom and Dad . . . we need to talk about money!"

Whether they never remind you of it or always seem to, your parents sacrificed for you. They have always been your safety net, there to bail you out and fund your dreams. But eventually the tables will turn, and you may find discussing their financial future harder to do than explaining why white was out of the question on your wedding day.

Not an easy discussion to have, but it is critical for you to know whether your parents' finances will carry them through retirement, illnesses, or emergencies. As always, we recommend talking to a professional financial adviser who specializes in estate planning. However, to get the ball rolling, you may start with questions such as where your parents want to spend their later years--if it's with you, you want to know!--and whether they think Social Security, savings, and/or any pensions they have will last them for the duration.

The AARP is a great resource and can help you find the right professional in your area. E*Trade and Bloomberg also offer free retirement calculators to help you look at various scenarios.

Often we're so afraid of coming to terms with our parents' possible dependency that these issues aren't addressed until there's a crisis, and emotions are high. Beginning the discussion now will help everyone confront those fears and create a sound plan of action. A plan of action . . . well, that certainly sounds like something your mother would say!

Have a happy Mother's Day!

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