Don't Delay an Important Discussion

Now that you’re approaching retirement, your kids are most likely all grown, with financial plans and pressures of their own. This might make you reluctant to burden them with more information and decisions. But, now is the time to talk with them about your financial values and goals for retirement, including how they might inherit some of your wealth and the implications around this. Feeling some anxiety around these topics and conversations is completely normal. Here are some tips to help you get started.

Start the Discussion Now

For many people, financial conversations with family can be tricky. Your family might feel unclear about your financial situation as you move towards retirement because you haven't shared the details with them. You, on the other hand, may feel you don't have the information or expertise to properly explain all the financial and legal aspects. And, you may feel uncertain about specific decisions you’ve yet to make.

So, while nearing retirement can elicit feelings of freedom and possibility, the prospect of talking to family about finances can also cause feelings of anxiety.

This is why many people either delay having the sensitive family talk about finances or never even have the conversation at all. Although understandable, this is not a positive, healthy or useful strategy. While avoidance may save you some stress in the moment, it will only create a build-up of problems in the mid- to long-term. Changing your thinking about this and forming a strategy for financial conversations across family generations, can help.

It’s important to realize, for instance, that you don't need to know everything. Take that unrealistic burden of expectation off your own shoulders. You also don't have to address and resolve every issue all at once. Consider this the beginning of many conversations, involving different people at different times.

Talk with Everyone Involved—Inside and Outside the Family

At this stage, it’s crucial to discuss family finances across generations with everyone concerned, and it’s also crucial to form a strategy that works for you. Your strategy may include legal, financial or even medical considerations, so it is also important to take these discussions to professionals who can offer their expertise and advice for your specific situation. Bringing your family into some of these conversations with your ancillary professionals can help facilitate open communication and better understanding.

Our conversations, for instance, are crucial to your overall planning process. When you also invite family members into certain conversations that we have, however, you might notice several additional benefits, such as:

• Your family will know who to call if something unexpected happens.
• It can remove some of the strain from you to have a trusted, outside voice explain your plans and strategies and to provide knowledgeable guidance.
• Your adult children can have an opportunity to ask any questions they might have and receive authoritative responses.
• Through open, mediated communication, you may uncover both issues and solutions that none of your family, including you, have thought about before.
• You can meet wherever is most comfortable for you, such as in your home, or you can come in to the office.

What Do You Want to Share with Your Family about Financial Goals and Values?

Many families do not discuss the larger, inter-generational aspects of their financial situations. They often try to feel their way through the financial maze and end up making risky or incorrect assumptions. For example, you or members of your family may have varying degrees of understanding—or misunderstandings—about retirement plans, estates, inheritance, property, taxes, savings, investments, insurance and long-term care, all of which were likely formed without an open, intentional discussion.

Sharing the facts of your financial situation with your adult children is necessary in order to handle your own finances well and to set them up for an ideal future. The attitude that it's your business, not theirs, generally isn't helpful—or even entirely true. Your decisions now and throughout retirement may have all sorts of financial implications for the other generations in your family, from how you choose to spend and pass on your wealth, to the plans you make for long-term and end-of-life care.

Assuring your family that you have a retirement plan and plans for the future—and inviting them into these conversations—is a great way to demonstrate your values and show leadership, as it provides structure and confidence for a future they’ll one day face without you. Equally important are the conversations you may need to have with your own parents to understand their needs and wishes and to understand how their decisions may impact you in the future.

As you think through the conversations you want to have, it may be helpful to consider three phases most people experience in retirement. There are the Go-Go Years, which include the first years of retirement (at whatever age) up to around 70 years old. Then, there are the Slow-Go Years, from around 70 to 80. Finally, there are the No-Go Years, when you reach 80 years and older.

Each of these phases is likely to involve different sets of financial issues.

• Those in their Go-Go Years may want the freedom to spend more generously at this stage, since they are free from work burdens but have plenty of free time—and the energy to enjoy it. Traveling, dining out, doting on grandchildren and attending social events all require money. Nonetheless, they might still face a few financial pressures, such as paying off a mortgage or managing healthcare costs.
• The Slow-Go Years are often marked by a change in the pace of life. Travel and leisurely activities may be limited or less frequent, and retirees may experience increases in healthcare needs. Adjustments to living arrangements, accessibility accommodations and/or supportive services may be needed or nearing. Despite a slower pace, financial demands can remain significant, which means careful planning and resource management are of the utmost importance.
• Retirees in the No-Go Years may need to spend more time and money on themselves, especially if and when their health and independence start to decline. Adjustments to living arrangements and/or supportive services will likely be a necessity. Planning ahead financially for healthcare expenses, living expenses, and end of life care, as well as up-to-date estate planning, are essential.

Talking through these different stages, all of us together, can only bring everyone involved more clarity and confidence for the future.

Schedule a meeting, and let’s discuss how to begin having these important financial discussions across the generations in your family.

^{This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.}

^{For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera nor any of its representatives may give legal or tax advice.}