my two cents

‘I’m Worried About My Mom’s Finances!’

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I love my mom a lot, but she can be difficult and very stubborn about asking for help. Now that she’s getting older, I’m worried about what that means when she eventually has to retire. She’s worked most of her life, but most of her jobs have been low-wage. For the past decade, she’s been a home health aide, so she has good job security, but the work doesn’t pay much and takes a toll on her physically. She’s in her late 60s and I would be surprised if she had much savings. She has never mentioned retirement, but she can’t keep working forever. My parents divorced when I was young, so she’s on her own. 

I’m a nurse, and I’ve pretty much been supporting myself since I was a teenager. I got scholarships to college and grad school, but I still had to take out loans, so I’ll be paying those off for a while. Financially, I’m doing okay, but I’m not sure what things would look like if I had to support my mom too. How can I talk to her about this? She’s not super financially literate, so I don’t know if she has a plan. How can I encourage her to make one, and talk to me about it? I know that she will probably need my help, but like I said, she’s really stubborn. I don’t have any siblings or other family members who would be able to step in here. What do I do?

Aw, I feel for your mom. Most parents hate to feel like they’re a burden to their kids, and it sucks to talk (and think) about getting old. Still, it’s tough for you to plan for your own future if you’re in the dark about whether your mom might need your help, and how much. Even if she brushes off your overtures about her finances at first, know that you are doing the right thing for both of you by bringing it up.

You’re also right to be concerned for your mom. Not to freak you out, but 16 percent of single women 65 and older live at or below the poverty rate, a higher number than any other demographic group. This is not the kind of thing you want to sit on, see what happens, and hope for the best. And while you can’t be expected to “fix” your mom’s finances, there is a lot you can do to help her.

First, you need to figure out how to talk to your mom about her money more generally. From there, you can encourage her to come up with a strategy, get a sense of what your role will be in supporting her, and plan accordingly.

The good news is that there are many easy ways to broach this topic. “Start with open-ended questions that build a dialogue,” says Jennifer Murray, a financial adviser who specializes in helping single older women plan for retirement. You could even use the pandemic as a conversation-starter — Murray suggests asking your mom if the past year has changed how she feels about work and retirement, and if she has a different outlook these days. “She might say, ‘It makes no difference how I feel. I have to keep working because I don’t have any retirement savings.’ And that opens the door for you to say, ‘Well, let’s talk more about that.’”

It’s also worth asking your mom about her own parents, and what they did when they got older. Depending on her cultural background, she may have certain expectations of support from you that she’s never voiced out loud. Maybe she’s always had it in the back of her mind that she’ll move in with you and help you with your own kids someday — a tall order, if that’s not aligned with your vision (or great, if it is!). Either way, being curious about how she pictures her golden years is a great way to dig into how much (if at all) she has planned for them financially.

Murray also recommends looking into your mom’s Social Security benefits, which is a relatively easy process — she can go on the Social Security website and get an estimate of what her benefit is going to be. Many Americans are eligible to start receiving a portion of their Social Security checks at age 62, even if they’re still working. But your mom’s checks will be bigger if she puts off receiving Social Security until later. Plus, if she takes payments while she’s still making an income, the government may dock part of her checks until she reaches “full retirement age,” which depends on what year she was born. (Probably age 67, but for more information, see here.) The system can be confusing, so it’s best for both of you to get up to speed now, if you haven’t already.

No matter what, it’s very unlikely that Social Security will provide enough income for your mom to live comfortably when she eventually does stop working. And if she doesn’t have savings, then she is starting to run out of other options. For example, she is probably past the point of being a good candidate for long-term care insurance, which would help cover the costs of a home health aide or assisted living facility; the premiums for someone her age could be too high to be worth it, says Murray. (Ideally, you want to shop for long-term-care policies in your late 50s or early 60s, if that’s something you’re considering.)

That doesn’t mean she’s a lost cause, of course. A good next step could be to hire a fee-only financial planner to sit down with her and take a comprehensive look at where she stands. (A fee-only financial planner will charge by the hour, and is not to be confused with a “fee-based” adviser, who takes commissions from product sales — not a good fit for your mom.) You can find options through the National Association of Personal Financial Advisors, here. Murray says that she gets a lot of clients this way: “I think it’s a great gift. When I first started my practice, a lot of my friends gave sessions with me to their moms or sisters or other family members.”

Another benefit to calling in a professional is that, as you mentioned, your mom might not warm to the idea of getting an earful from you about her money. An authority on the subject who is kind, professional, and experienced in these conversations could get a lot farther. I also suggest vetting potential advisers first; you don’t want someone who will talk down to your mom, or speak in jargon that goes over her head and makes her feel like it’s a waste of time.

A financial adviser may be great at finding creative ways for your mom to save money. One standard piece of advice that they will probably give (and that she should follow, to the best of her ability) is for her to put as much money as possible into retirement savings vehicles like an IRA — ideally the maximum annual amount ($7,000 for those over 50) — and sock away additional cash in low-risk investments if she can.

Once you get a better read on her situation, you might consider sitting down with a financial adviser, too. Integrating your mom into your own long-term plans can be overwhelming, especially when you have a lot of competing priorities — student loans, money for your own retirement (which you shouldn’t ignore — you don’t want to be in the same position as your mom someday). But if you can figure out how much you’ll be able to set aside for her bills, that’s important to communicate to her, too. The goal is to set expectations on both sides, in the most supportive way possible.

‘I’m Worried About My Mom’s Finances!’