How to Talk Honestly About Money With Your Family

Talking about the specifics of how your adult parents are going to handle aging and the related financial implications, like how to afford retirement, can be challenging, to say the least. That might be why so few parents and adult children have these kinds of frank discussions. But glossing over the details when everyone is still healthy and fiscally sound can lead to a much more difficult conversation later – after a crisis hits.

When it comes to covering living expenses in retirement, 4 in 10 parents have not discussed their plans in detail with their children, according to the recently released 2014 Fidelity 2014 Intra-Family Generational Finance Study. About 15 percent haven’t had any kind of conversation on the subject. The numbers are similar for other tough topics, including health care and elder care expenses, wills and estate planning. The study included 1,058 parents and 159 children older than age 30; to qualify, parents had to have investable assets of at least $100,000.

Parents tend to say they want to wait longer to have these conversations, until after they are retired, while adult children are eager to address these topics before their parents' retirement. Adult children also say they think these conversations will be upsetting, and parents say they don’t want their children to “count too much on their future inheritance” – more reasons for delaying or skipping the talks altogether.

“[Adult children] have a lot of anxiety about whether their parents are going to succeed in retirement, and adult children are trying to plan for their own retirement and pay for their children’s education,” says John Sweeney, executive vice president of retirement and investing strategies for Fidelity. Parents and adult children also have to fight the instinct to keep financial matters private, he adds. “Most people don’t talk to their children about what they make,” he says, so it can feel strange to shift gears as you get older and become more open about your financial situation with your children, even when they’re adults.

That doesn’t mean parents need to share every detail of their bank accounts with their kids, but Sweeney recommends sharing enough about your retirement plan to give your children confidence that you’ll be able to cover your expenses. “That’s a great gift,” he says, referring to the study findings that adult children are often unnecessarily worried about their parents’ financial well-being.

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How to Talk Honestly About Money With Your Family