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Key takeaways:

  • Talking about money with your aging parents is essential to help avoid surprises and make sure they are set up for the future they want.
  • Encourage your parents to obtain a living will and Power of Attorney (POA), which are important in helping ensure their financial and healthcare wishes are honoured.
  • You can schedule a ‘meet & greet’ with your parents’ financial planner, lawyer, or estate planner so that you know who to get in touch with in the future.
  • Ask your parents about their retirement goals and determine if you have the financial resources to support them.

With Canadians living longer than ever, you’re likely thinking about what you can do to help your parents make the most of their retirement years. One great way to support them is to help make sure your parents' finances are on track. It may seem like an awkward talk to have — especially if you don’t feel like a money expert yourself.

We have some tips on how you can talk finances with your parents so that they’re better prepared for whatever life throws at them.

Benefits of talking to your parents about money 

The pros of talking money with your parents — or an aunt or uncle or close family friend — about their finances far outweigh the cons.

This isn’t a conversation to put off because the earlier you have it, the better position you are in to help:

• Protect their financial future

• Get their input while they’re still able to give it

• Support their retirement goals

One thing to keep in mind: If you expect your parents to open up about their money matters, they may have questions about your finances, too. It is helpful to make sure you are being as open and honest as possible to inspire them to do the same.

Assess the situation

Before you sit down for a money chat, it’ll be helpful to prepare for that conversation. What do you know about your parents’ finances? This will help steer the conversation — and let you suggest solutions they can manage.

You might also reflect on the roles that your family members tend to play. To work as a team, you’ll need to focus on each other’s strengths, not weaknesses.

Understand family dynamics 

How your family interacts may impact the way you talk to your parents about money. Perhaps one of your parents is more involved in decision-making, or more open to talking about finances. Taking these dynamics into account can help you tailor the way you approach this sensitive topic with them.  

If your parents or relatives are embarrassed about their financial situation, you could — without meaning to — resurface past issues they’ve faced with money. Try to make it clear that your goal is only to help them better prepare for later in life.

If their savings aren’t what they want them to be, they’re not alone. A 2023 study found that one in five Canadian workers aged 55 to 64 hasn’t set aside any money for retirement, and 44% have less than $5,000 in savings.1

You don’t have to feel like you’re doing this alone — you can create a support team that includes loved ones like partners and siblings, too. This might help take the pressure off you, especially if you’re in the sandwich generation and support not only your aging parents, but also your own children.

Start the conversation

Once you’ve assessed your family dynamics, you can move forward with sitting down with your parents. Be sure to give them advance notice and remind them that you only want to help.

If you also find it tough to talk about money matters, look at it as a fact-finding mission. You can always follow up later with shorter, bite-sized chats. 

Health care decisions 

As people age, they may get ill or injured. Many adult children find themselves caring for a loved one while taking care of their own kids. Be sure to ask your parents about their long-term care plans, not only so you can help honour them, but also to head off what can be a huge financial impact on a family.

You should see if your parents have legal documents in place that’ll ease the process if you have to make important health care choices for them down the road. If they don’t, help them work through writing a living will and choosing someone to serve as power of attorney for personal care. This lets them assign a family member or close friend to help make decisions about their health care, personal care and housing if they can’t.

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Long-term care insurance 

With aging parents, it’s a good idea to research long-term care insurance options to make sure they’ll have the right coverage for nursing and health care costs that may come up. Some people want to stay in their own homes, but may need daily nurse visits to live on their own. Others may suffer from a chronic illness and require ongoing treatment.

You can speak with an insurance advisor to help review long-term care insurance options.

Seek advice from professionals 

If your parents work with a banking advisor, ask if your parents are open to having a meet-and-greet session with you present. That way, if your parents ever need your support, you’ll already have made contact with this person that they trust.

If you feel like there’s a gap in your own financial knowledge, you’ll also have an expert to seek advice from. 

Consult with an estate planner

Many adult children don’t know all the questions to ask their elderly parents or relatives when it comes to estate planning. There are experts for this, too — estate planners prepare legal documents, including living wills, trusts and power of attorneys (POAs) for property and personal care. They can also give you a heads-up on tax implications, such as probate tax, so you can plan ahead.

Be sure to discuss with your parents how they’d like to pass on assets to their heirs. Knowing their wishes can help avoid legal disputes with family members down the road.

Help them get organized 

Ask your parents to create a binder of all their personal finances. This may include details about their bank and investment accounts, safety deposit boxes, property taxes, insurance and routine bills they pay. Also, have them share where they store their online passwords. 

Having this information in order and in one place will come in handy when you need it most.

Talk about fraud prevention

With fraud on the rise in Canada, your parents or relatives can become targets.

Be sure to tell them about popular scams, such as the grandparent scam where a fraudster will pose as a grandchild or loved one in need of help. To be proactive in keeping your parents safe, ask them to:

  • Never answer calls from numbers or click on links they don’t recognize
  • Never offer personal or banking information, particularly don’t provide financial information including credit card number, and One Time Passwords over the phone or internet. Financial institutions won’t call or email you to ask you to disclose this information.
  • Never post financial details on social media
  • Review their monthly bank statements for unusual transactions

If they think they have been scammed, be sure they report it to their bank and credit card providers, the Canadian Anti-Fraud Centre and their local police services.

Set goals for their future 

Before you wrap up your money talk, ask your parents about their retirement and financial goals. For instance, they may prefer to remain in their own home, instead of moving to an assisted living. Knowing what they want will help you figure out a financial plan to meet those goals.  

If they haven’t fully figured things out yet, you can help them decide what they want their future lifestyle to look like. 

Listen to a great expert

In this 2023 episode of the Perspectives podcast, Amy D’Aprix, also known as Dr. Amy, is our guest. She’s an author, speaker and consultant for the Scotiabank Women Initiative. She’ll give us practical tips on how to have that dreaded money conversation with our parents regardless of your age. 

Click here for the transcript.

Bottom line

There’s no better time to talk about money with your loved ones than when they’re active and healthy. If they don’t have the proper legal documents, insurance coverage or a financial plan in place, you can help them work with a Scotia advisor or estate planner so they’re fully ready for the future. Have the conversation now, to best prepare for their future. 

Ready to get your finances on track for your future? Come in and speak to a Scotia advisor today