This article, entitled "The Talk All Parents Need to Have With Their Adult Children," comes from partner site Money Talks News.
If you think the birds and the bees is the most uncomfortable discussion a parent and child can have, think again. It seems there’s an even more difficult talk: the one between parents and their adult children about money.
According to Fidelity’s Intra-Family Generational Finance Study, parents and their adult children agree that discussing finances – including retirement planning, elder care and inheritance – is important. Unfortunately, they can’t seem to agree on when the conversation should occur, and how much financial detail should be covered.
The study found that while parents prefer to delay the conversation until after they’ve retired, most children said the finance discussion should occur earlier, before retirement or potential health issues arise. Overall, just 40 percent of parents said they had a detailed conversation with their children about expenses during retirement.
Some parents said they avoid the financial talk because they don’t want their children to count on receiving an inheritance, MarketWatch said. The top reason kids said they don’t want to broach the discussion is because they believe it’s upsetting to talk about – both for them and for their parents.
In a press release, John Sweeney, executive vice president of retirement and investing strategies at Fidelity, said:
These discussions aren’t always easy, but there can be real emotional and financial consequences when they don’t happen or lack sufficient depth. It’s absolutely critical that families take the time and break down any barriers to sort through important matters related to retirement preparedness, caregiving responsibilities, estate planning and the tax implications of an inheritance. The alternative is putting these matters off until a crisis occurs, at which point the options may be limited and there could be unintended financial repercussions.
According to AARP, Lauren Brouhard, senior vice president of retirement at Fidelity, encourages adult children to talk to their parents about how they’re going to live when they’re retired. It’s also a good time to discuss important documents, such as a will, health care directives and a power of attorney form.
AARP wrote: “While adult children can remain sensitive to a parent’s financial privacy, ‘there are some key things that children should be aware of and need to know if they need to take on responsibilities,’ Brouhard said.”
Here are some key findings of the Fidelity study:
Because discussing financial matters can be tense, Fidelity suggests initiating the “voice not vote” rule, “which makes adult children aware that their parents’ financial planning is not a democracy. The parents are ultimately in control of their decision making.”
This is definitely a talk I need to have with my parents and my four siblings. But like so many other Americans, we avoid it because it’s an uncomfortable (though necessary!) discussion.
How about you? Have you had a discussion about finances with your family?