Here is what to do if your parents need financial help

Multiple surveys have found that most parents provide some sort of financial support to their adult children. But often, financial aid goes the other way.

A 2015 survey by TD Ameritrade found 13 per cent of adults provided financial support to a parent. Millennials were far more likely than older generations to report they were helping their folks. Of people born between 1981 and 1996, 19 per cent helped their parents, compared with 13 per cent of Gen Xers (1965 to 1980) and 8 per cent of baby boomers (1946 to 1964).

Sometimes the money is provided happily or at least without resentment, by those following cultural norms or personal conviction that they owe it to their parents. Other times, financial aid to parents is a source of tension — between parent and adult child, among siblings and between partners.

Certified financial planner Austin A. Frye had no idea when he married his wife four decades ago that they would one day support her parents. The older couple, now in their 80s, cover their day-to-day expenses with a union pension and social security. Frye and his wife cover unexpected expenses and travel for her parents, Frye says, and also pay $15,000 a year for a long-term care policy.

Frye says that though he’s happy to be in a position to help his in-laws, he still wishes they had saved money for their retirement. “They just spent what they made. They didn’t really plan,” Frye says.

Certified financial planner Kashif A Ahmed, on the other hand, comes from a culture where younger people get into arguments about who will have the honour of caring for an older relative. Ahmed said he needed a spreadsheet to coordinate the dozens of relatives who volunteered to help his great-grandparents in their final illnesses.

Ahmed invited his mother to move in with him after his father died in 2001. His wife, Simona, an economist who grew up with similar values in Romania, supported the move, and Ahmed’s mother is helping to raise their four daughters, ages 6 to 16.

Ahmed says financial advisers from other cultures often have trouble grasping the deep sense of obligation. He’s heard peers criticise clients who aren’t saving enough for retirement or are neglecting other goals while supporting parents, saying the clients don’t “get it.”

“I’ll say, ‘No. You don’t get it,’ “ Ahmed says. Balancing competing goals is what financial planning is all about. If you’re supporting a parent or think you may in the future, the following steps could help make the balancing act a bit easier:”

TALK TO YOUR PARTNER

If you’re married or in a committed relationship, it helps to get on the same page about how much you’re willing and able to give. Brainstorm different scenarios, such as emergency expenses (how much can you give, and what constitutes an emergency?) or long-term care (can you provide care in your home or help pay for in-home or nursing care?). If you’re not clear what you can afford, a consultation with a financial planner could help. If you don’t have a partner, talking to a trusted friend or a financial planner can help you clarify what you can offer and when.

TALK TO YOUR PARENTS

 Just over half of the people supporting parents in the TD Ameritrade survey had ever talked with them about it. Financial planners say that understanding the parents’ financial situation can help you prepare, and might also provide an opportunity for you to reduce their need for your help. You could help them budget, give them a session with a financial planner. You also can let them know how much help you can afford to provide.

ROPE IN YOUR SIBLINGS

 Even if they can’t contribute financially, they may be able to help in other ways —  running errands, taking parents to the doctor, handling bill paying and other paperwork, or providing respite care.

TAKE CARE OF YOURSELF

You may have to delay retirement, buying a house or having kids to support your parents. Many people do, according to the survey. But you should have a plan to eventually reach your own goals. Unlike your parents, you may have only yourself to rely on when you’re older.