Tags: Fidelity | Parents | Retirement | Finances

Fidelity: Parents, Kids Need to Talk about Post-Retirement Finances

By    |   Wednesday, 09 Jul 2014 08:25 PM

Families are divided. Adult children want to discuss parent's post-retirement plans sooner than parents' want to open up, a study from Fidelity Investments found.

Fidelity's Intra-Family Generational Finance Study, which surveyed 1,058 parents and 159 adult children, found that the majority of parents and children agree that it's important to have frank conversations about wills, estate planning, eldercare and retirement expenses.

The problem is: 64% of those parents and children disagree about when these conversations should occur.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Children tend to want to hash out the details before their parents retire or develop serious health problems, says Fidelity. But parents are more likely to prefer waiting until sometime after they have retired.

The study found about 40% of parents haven't had any meaningful talks with their children about covering living expenses, healthcare or eldercare during retirement.

The top reason parents are avoiding financial conversations is because they are worried that their adult children are counting too much on a future inheritance. Meanwhile the children are not pushing the issue because they don’t want to upset their parents.

This is not a case of parents know best.

Families need to bite the bullet and talk — before parents retire — about how best to handle family assets in the future, Lauren Brouhard, senior vice president of retirement at Fidelity told AARP.

“Admittedly, these discussions aren't always easy, but there can be real emotional and financial consequences when they don't happen or lack sufficient depth,” John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity told USA Today.

The study found that a lot of adult children are genuinely concerned about their parents. 43% of children expect either they or a sibling will assume care-giving duties, but only 6% of parents are expecting to receive it.

And 29% of children expect they will need to help their parents financially. However, 96% of parents say they will not need financial assistance.

However, a staggering 70% of parents also admitted they do not know how much money they have to live on during retirement.

Despite parents confidence in their ability to care for themselves, it's very possible their children will have to make some financial health care decisions later in their parents' lives, Sweeney told USA Today.

“We want parents to take the time now, because if something comes up in the future, if someone becomes ill or loses a job, you’re not being forced to make those decisions at highly emotional times in your life,” Brouhard told AARP.

To help defuse some of the tension surrounding financial these conversations, Fidelity suggests implementing 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.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Related Articles:

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
Families are divided. Adult children want to discuss parent's post-retirement plans sooner than parents' want to open up, a study from Fidelity Investments found.
Fidelity, Parents, Retirement, Finances
499
2014-25-09
Wednesday, 09 Jul 2014 08:25 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved