You talk with your mom about her health, favorite books, and the latest news. But if you haven’t stopped to inquire about her financial well-being, you are missing out on an important opportunity to protect the one person who has always looked out for you.
Generally speaking, financial planning is gender blind. We all need to spend and save appropriately regardless of which chromosomes we carry. But women (especially those over age 50) have some particularly compelling reasons to plan ahead:
- They tend to live longer than men. According to the Social Security Administration, a woman turning age 65 today can expect to live until age 86.8, while her male counterpart can expect to live until age 84.2.1 That means women spend more time in retirement and are more likely to require paid care late in life, especially after a spouse (would-be caregiver) passes away.
- Women generally still earn less. They make just 92 cents for every dollar earned by men, even when educational attainment, choice of major, and job tenure are factored in.2 A smaller monthly paycheck means that women have less money to save for their future. It also means they receive lower matching contributions from their employers.
- Women historically have less time to save for their future. That’s because they are far more likely to take career breaks to start a family or provide unpaid care for aging parents.3
Collectively, the financial headwinds they face mean women have far less financial security as they enter their retirement years.
You can help ensure that your mother has the safety nets in place to provide for her needs by asking some targeted questions, sooner rather than later.
Questions could include subjects like:
- Life's lessons
- Mortgage debt
- Assisted living plans
- Power of attorney documents
- Wills and HIPAA forms
- Beneficiary designations
- Her executor
- Asset inventory
As you embark on a discussion of financial wellness with your mom, however, be aware that the topic may be sensitive. Depending on her age, assets, and potentially even cultural background, your mother may not feel comfortable sharing details about her financial plan with her children. (Related: Tips for talking money with an aging parent)
“If your parents are in their 80s or 90s, in particular, that is a very private generation and they don’t talk about their money,” said Elijah Kovar, a partner with Great Waters Financial in Minneapolis, Minnesota.
1. What’s the biggest financial lesson you have learned?
As such, he said, it may be easiest (and most enlightening) to begin the dialogue by asking her to share any advice or lessons learned.
Indeed, your mom has seen more than you. She’s lived through economic recessions, wars, double-digit interest rates, and dramatic swings in the stock market. And, chances are, she’s had her share of financial ups and downs.
Ask her what she considers to be her biggest financial achievement and her biggest regret. If she had it to do over again, would she have chosen a different career? What single piece of financial advice would she give her grandchildren? (Learn more: 5 ways to help your grandkids)
You may learn something new along the way about Mom’s money values and why she manages her budget the way she does. Equally important, you’re opening the door to a deeper discussion of her long-term financial plan.
2. Do you still have a mortgage?
Bryan Bibbo, a financial professional with The JL Smith Group in Avon, Ohio, said concerned adult kids should ask their mother whether she still has a house payment.
Having too many fixed monthly expenses can be a detriment in retirement and could squeeze a limited budget, he said.
“Not having a mortgage payment gives retirees a lot more flexibility with monthly income,” he said in an email interview. “Downsizing before retirement to allow a mortgage to be paid off is a viable option.” (Learn more: Rent or own in retirement?)
If your mom is burdened by housing payments, or struggling to pay the heating bill on a home with more square footage than she needs, consider putting her in touch with a financial professional who can offer independent perspective on how she might lower her expenses and free up disposable income.
3. Have you considered inflation in your financial plan?
Inflation, or the gradual rise in the price of goods and services, is an insidious thief. Over time, it erodes purchasing power, particularly for retirees who are living off their savings.
Ultimately, it means the cost of essentials such as food, clothes, utilities, and medical care will consume a bigger portion of a retiree’s budget as they age.
If your mother hasn’t factored the inflation rate into her financial plan, she could be forced to lower her standard of living down the road. (Learn more: The ideal retirement portfolio withdrawal rate)
“Planning for retirement is important,” said Bibbo. “Retirees cannot expect a gallon of milk to cost five dollars now and five dollars 20 years from now. Using an average two and a half percent inflation factor helps in planning.” (Learn more: Is your retirement portfolio inflation ready?)
4. Do you have a plan for home health care or assisted living?
Your mom may not need long-term care insurance coverage, especially if her savings are sufficient to self-fund home health care or assisted living, if needed. But with the cost of such care on the rise, it’s best to discuss her plan in advance. .
The national median amount paid in 2021 for an assisted living facility climbed to $4,500 per month, according to the latest Genworth Cost of Care Survey. Home health aides charged an average of $4,957 monthly and a semiprivate room at a nursing home cost $7,908 per month.4
It may be that mom expects to move in with one of her kids in old age, a topic that should be addressed as early as possible so expectations can be met or managed.
5. Do you have power of attorney documents in place?
Like everyone, said Kovar, your mother should have a financial power of attorney document in her estate planning arsenal, which grants a specified individual legal authority to make decisions on her behalf in the event that she becomes cognitively impaired or incapacitated.
Similarly, she needs a health care directive, also called a durable power of attorney for health care, which permits a specified individual to make health care decisions for her if she is not able to do so. (Learn more: End of life planning)
Ask your mom to meet with her estate planning attorney, or help her find one if she doesn’t already have one. Make sure these documents are updated every three years so they are not considered stale by a medical or financial institution.
6. Do you have a will and HIPAA form?
Your mom, like all adults, should also have a last will and testament, which defines how she wants her assets distributed when she dies and provides instructions for who should care for any minor dependents she may have. (Perhaps she’s raising a grandchild.)
Estate planning professionals say she should also have a living will that clarifies her wishes for end-of-life care if needed, including artificial resuscitation and palliative care. (Related: End-of-life checklist)
Be sure, too, that she’s got a signed Health Insurance Portability and Accountability Act (HIPAA) privacy release form in her files, which permits the health care providers who treat her to disclose protected health information with named individuals so they would be able to make informed decisions on her behalf, if needed.
7. Have you named/updated beneficiaries?
You’re not asking for names or inquiring for self-interest. The goal here is to remind your mom that it is critical to keep the beneficiaries named in her life insurance policies or IRA or 401(k) retirement accounts up to date, since those beneficiaries take legal precedence.
When she dies, those retirement accounts (often a retiree's largest asset) pass directly to the designated beneficiaries, even if they differ from the individuals named in a more recently updated will.
If she hasn’t reviewed them since obtaining a policy or setting up her retirement accounts decades ago, the named beneficiaries could include an ex-spouse or a relative with reckless spending habits.
Indeed, failure to update beneficiaries after a death, divorce, marriage, adoption, or a birth is one of the most common and costly mistakes in the estate planning process. (Learn more: Estate planning: 6 biggest mistakes you might be making)
“You need to be clear on the steps she has taken to avoid probate,” said Kovar. “Many think they’re set because they have a will, so the adult children may have to educate their parents about the importance of beneficiary designations if they don’t already know.”
8. Have you chosen an executor?
Here again, she need not disclose the individual’s name, but it’s important to ask whether your mom has appointed an executor, the person she trusts to carry out the instructions in her will when the time comes. Also ask if that person is aware of their role and has agreed to it. (Surprises aren’t always a good thing.)
The executor has an important job, including filing the deceased’s final tax return, allocating specific bequests, paying all claims against the estate, taking an inventory of all assets, and arranging for the appraisal of property. (Learn more: You’re an executor…now what? )
If her will is straightforward and easily interpreted, your mom may not need an executor at all. In cases where no executor is named, the courts will appoint one on the deceased’s behalf, usually a family member or beneficiary.
If your mother would prefer to control that decision, however, be sure she has done so.
9. Do you have your estate plan organized?
It’s unpleasant to contemplate, but people are going to need access to your mother’s financial affairs after she passes, be it her spouse or her heirs.
To make things easier during a time of grief, ask if she’s pulled together an inventory of her assets, including copies of bank and brokerage accounts, life insurance policies, and retirement plans.
Financial professionals also recommend a written list of account passwords (including those she uses online) as well as contact information for her team of financial professionals such as tax accountants, financial professionals, and estate planning attorneys — all stored in a fireproof box or bank safe deposit box. She can keep those documents private during her lifetime, of course, but provide a key to a trusted executor or attorney to access them when the time comes.
Your aging mother may have all her financial planning ducks in a row, or she may be lacking an important estate planning document that exposes her to risk. You’ll never know if you don’t ask.
A few core questions can put your mind at ease and help ensure that your biggest fan has the financial stability she needs to enjoy her retirement years.
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This article was originally published in December 2020. It has been updated.
1 Social Security Administration, “Benefits Planner — Life Expectancy.”
2 Georgetown University, “Women Can’t Win: Despite Making Educational Gains and Pursing High-Wage Majors, Women Still Earn Less than Men,” Feb. 27, 2018.
3 National Alliance for Caregiving and the AARP, “Caregiving in the U.S.,” 2020.
4 Genworth, “Cost of Care Report,” 2021.