A study by Fidelity paints a touching portrait of adult children wanting to provide financial support for their parents as they move into their elder years, yet parents highly reluctant to place that financial burden on their children.
In fact, 93% of the parents surveyed feel it would be unacceptable to become financially dependent on their children, yet only 30% of children feel the same.
“While family conversations around important topics such as retirement preparedness, eldercare, and estate planning can be difficult and aren’t always easy to initiate, parents approaching retirement might be pleasantly surprised to discover their kids expect to help,” say survey researchers.
In addition to illuminating the differing attitudes between both groups when it comes to financial eldercare, the study also shows a disturbing lack of communication when it comes to health and estate planning.
- 92% of parents expect one of their children to be the executor of their estate
- Only 27% of the kids identified as filling the role knew this
- Just 40% of the children identified as being the long-term caregiver were aware
- and just 36% of the children identified as managing finances when their parents are unable knew this was his or her parent’s plan
“These discrepancies highlight the fact that many families need to do a better job of being on the same page when it comes to financial planning” says John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity.
Fidelity suggests families:
- Initiate family discussions earlier. These conversations should begin taking place before retirement, and certainly well before any challenges arise.
- Ask as many detailed questions as you can. Don’t be afraid to ask even the most seemingly obvious questions.
- When having discussions, follow the “voice not vote” rule. While family members should have a role in the planning process, make sure the ultimate decisions made are consistent with the wishes of the parents, who are charting the course of the rest of their lives.
- Define family roles. Advanced planning can help define roles and choose when and how different people will be involved. It’s also important to consider the personalities of each child, as well as their proximity, relationship with parents, and other nuances that play into long-term decision making.
Sweeney adds that it’s important to schedule as many get-togethers as needed–and revisit those plans at least annually, to make sure they still make sense.