As financial planners, we often help families sort and prioritize their goals, many of which are centered on supporting their children. Stuff like paying for schooling—and later on, helping with a wedding or a down payment on a first-time home purchase—are typically part of the plan. So I was struck by a recent Kiplinger column—written by a millennial—that encourages young adults to discuss their parents’ financial plans.
That sort of conversation is not easy to broach, we know. But it’s important for young people with aging baby boomer parents to understand the role they may need to play as their parents age.
Millennials should start with the basics, including learning whether their parents have contemplated the road ahead. Some things to ask: Are they financially prepared to handle retirement? Have they considered health risks, and how life will play out when they may need care? Do they have appropriate insurance coverage?
This line of inquiry might seem elementary to many Conlon Dart clients, but most Americans remain woefully unprepared for the aging process. Even for those who have considered the issues, the margin for error is often so slim that their financial safety net is the kids. The fact is, for the majority of baby boomers who will face aging challenges, millennial children will become their primary caregivers. This role might begin simply by taking parents to medical appointments, but in many instances, it transitions into offering more day-to-day support and eventually providing live-in help.
This process can become life-changing for millennials, who must sometimes sidetrack their own best-laid plans to care for their parents. Parental support may require relocation, a job change, or perhaps even quitting work altogether.
Some of the uncertainty can be resolved simply by having a conversation. Share your concerns and find out whether your parents have a financial plan. If so, ask if they’re willing to share it. That way, you can begin to get a handle on your future responsibilities and incorporate them into your own financial plan.
In the best-case scenario, your parents will have their needs covered, and you can relax and move on to planning for your own goals.