For most adult children, talking to our parents about financial matters is about as comfortable as it was for our parents to give 'the talk' to us about where babies come from.
Try holding a conversation, not a confrontation
Two weeks ago, I was lucky enough to make an inaugural visit to South Africa and then serve as a UAE tour guide for my parents, two genial Texans who are easing their way into retirement. We gawked at leopards, elephants, the Burj Khalifa and the gold ATM at Emirates Palace. We ate many wonderful meals and traded gossip about friends and family members scattered around the globe. And at no point during the holiday did we feel like we wanted to strangle one another.
It was a complete success, a remarkably stress-free holiday. But it should come as no surprise to anyone that the only moment of strife involved money.
For most adult children, talking to our parents about financial matters is about as comfortable as it was for our parents to give "the talk" to us about where babies come from.
In our case the dispute was minor. My parents had paid the lion's share, so to speak, of our safari costs and I thought it was only fair that I pay their hotel bill in Abu Dhabi. Knowing they would argue, I slipped into the hotel on my parents' last day in the country and gave the front desk my credit card, then informed my folks over breakfast so they would not encounter any confusion at check-out. My father almost spit out his coffee as he and my mother protested vociferously, as if I was suggesting they could no longer manage their chequebooks.
Their intentions were pure, I have no doubt, but it was momentarily awkward - not to mention a window into what the coming decades may hold in store as my parents' financial concerns more and more become mine as well.
This is not a matter of greedily monitoring a dwindling inheritance, even though I have wondered if my mother really needs the latest edition of the iPhone and noticed that my father was toting around an awfully expensive camera.
There are selfish, practical considerations to consider, especially for those in the "sandwich generation" with young children to support and facing the possibility of helping out their parents financially as well.
To plan adequately for the younger generation, it is necessary to have a clear picture of what the older one may need.
Anyone who is fortunate enough to have surviving parents is faced with the same handful of questions: do they have enough money to last? Do they have the necessary health and life insurance in place to provide some security to their spouse? Have they left clear directions about how they want their financial and medical decisions handled in the event they are unable to communicate?
As the last scenario vividly illustrates, these are not always pleasant conversations. Outside of Woody Allen, few of us go out of our way to talk about death. But financial advisers say talking about these issues is critical, and tell stories of many families that have been torn asunder by the lack of communication between parents and their children.
I know of a few myself.
The experts say the solution is about holding a conversation, not a confrontation. And the earlier the better. According to a 2007 study by the US Federal Reserve, financial decision-making skills start to decline after the age of 53. But it should not feel like an intervention. Often, an indirect approach is effective. "I know of a friend who ..." is one. "Did you see that story in the paper about ..." is another. Some advisers even suggest writing a letter expressing your concerns as long as it is clear you are worried about their well-being and not your own.
The financial turmoil of the past few years wreaked havoc on many retirement plans, so even children who previously felt they had a good grasp of their parents' financial planning should think about requesting an update.
My parents may be slightly creakier than I remember, but remain the picture of health. Still, we've had several conversations of late that would have been off-limits not so long ago. As a result, I do not worry about them much and that is a valuable peace of mind to have. The fact is, I can still learn more from my father about money than he can from me.
Over our last dinner before their flight out, the conversation turned to his recent retirement. A surgeon, he is hanging up his scalpel this year at age 67. I joked that I may not ever be able to retire, having got a bit of a late start on my savings, but he reminded me that he was also unable to start accumulating assets until his mid-thirties because of medical school and a military commitment. In any event, many of his colleagues about the same age are continuing to work.
The difference is that many of them invested huge sums in speculative businesses or borrowed against their retirement accounts to cover short-term expenses.
My father, by comparison, saved aggressively, especially in tax-advantaged retirement plans, and avoided debt whenever possible. "I just didn't do anything stupid. That's why I was able to retire," he told me.
Don't be stupid.
That's good fatherly advice I am going to do my best to follow.