Checking Parents' Financial Health

NEW YORK (AP) - As
you've watched your savings accounts shrink, have you given any thought
to how the 2-1/2 year market slide and depressed interest rates have
affected your parents' retirement nest egg?

Are they in trouble or are they OK?

Just how do you broach the subject in a way that doesn't hurt their
feelings or threaten their sense of independence?

Experts say that despite the likely discomfort on both sides, it's
necessary for adult children to open lines of communication with
elderly parents about money.

"Families don't talk about financial issues a lot in normal times and,
of course, the worst circumstances to be starting a discussion are
times of crisis," said Elinor Ginzler, manager for independent living
at the AARP
in Washington, D.C. "But your goal has to be to make sure your mom and
dad are taken care of financially."

Ginzler points out that money is at the center of just about everything
that has to do with your parents' well-being: "You can't talk about
housing without talking about finances. You can't talk about health
care without talking about finances. You can't plan ahead without
talking about finances."

Lynn O'Shaughnessy, author of Retirement
Bible (John Wiley & Sons, 2001), suggests that one
way to break the ice is for children to open up about their own
financial concerns.

"It's very threatening if you say, 'Mom, have you lost all your
money?'" she said. "A better approach would be, 'I've taken a hit and
I'm looking for ways to help my portfolio. Can we brainstorm?'"

O'Shaughnessy also said that elderly parents might be more comfortable
sharing their problems with a professional financial planner than with
a daughter or son or son-in-law. If they have accounts with companies
like Vanguard or Fidelity or Schwab, they probably can see retirement
specialists free or for a modest fee, she said.

"A professional can hold their hand, give them confidence and help them
make decisions to ensure their money lasts," she said.

The AARP's Ginzler says children should watch for "red flags"
indicating financial distress: Are your parents' bills piling up? Did
they used to eat out four nights a week and now they're not going out
at all? Is there less food in the house?

She suggests several possible approaches to opening a dialogue:

• Start with a non-threatening topic, like a safety
  inspection of your parents' home to ensure railings are secure, the tub
  has nonstick mats, electrical cords are out of walkways. Then move on
  to financial issues.
• Cite an outside source, as in "Mom, I just read the most
  horrible article in a magazine about a couple that had been retired for
  15 years and had to go back to work. ... It kept me up all night. ...
  Can we talk about this, because it would make me feel better."
• Work through a third party, perhaps a trusted uncle or an
  attorney or accountant who has had a long-term relationship with your
  parents.

Financial planner Robert J. Reby of
Danbury, Conn., said he was seeing more multigenerational clients --
baby boomers who brought in their parents and their children.

He believes that many of today's elderly are in fairly decent financial
shape because, having lived through the depression of the 1930s, they
tend to be careful spenders and good savers.

"Despite today's financial turmoil, they're often not so much in
trouble as in need of confidence building," Reby said.

He noted that in cases where parents are having financial difficulties,
children can help out without doing something as obvious -- and
potentially threatening -- as buying them groceries.

One possibility, for example, is to put your parents on your own health
insurance plan.

Or suggest they start moving assets like their home into their
children's names -- a potentially good move for estate-planning
purposes as well as a way to let the children pay the property taxes
and other bills.

And few would turn down a gift from their children of a Christmas trip
to visit the grandchildren or an anniversary cruise.

Reby stressed that any steps must be sensitive to parents' feelings.

"Parents want to maintain their independence," he said. "You hear it
over and over, 'I don't want to be dependent on my children.'"

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