Good news for older parents: your children will help support and care for you as you age. That’s according to a new study from Fidelity Investments. However, the bad news is that most families don’t agree on exactly what that help should be and the types of responsibilities children should assume.
Fidelity’s most recent Family & Finance report surveyed two members of each family—one parent and one adult child—on things such as retirement income, eldercare and estate planning. The results found that about 40% disagree on the roles children should play as parents age.
Money’s recent article, “Here’s What Your Aging Parents Say They Want You to Do for Them,” says that these kinds of mismatches can create major emotional and financial problems down the road. Families should not wait until a health crisis or other unexpected event demands a caregiving or financial planning conversation; it is far better to have these conversations in advance of any triggering events. One clear finding on financial support for parents was that while over 90% of parents who responded said they wouldn’t like to become financially dependent on their children, only 30% of children shared that view, and about 25% are already planning to support their parents financially.
There were other expectation differences with financial assistance tasks. About 70% of parents expect that at least one of their children will help manage investments and retirement finances, and about the same percentage thought the kids would pitch in on household expenses, budgeting, and bills. However, 36% of children didn’t know they were expected to handle investments, and 44% were unaware their parents wanted help with household budgets.
The big reason children are clueless when it comes to what their parents expect is the simple fact that their parents have never told them. That’s a problem. There are many reasons why parents might choose to give responsibilities to one child over another, like location or having a particular skill set that makes them better qualified to handle certain roles. However, if that person doesn’t know the plan, they won’t be prepared, which could be problematic. It could mean a lack of access to paperwork, delays, confusion and extra expense—not to mention poor care.
When asked about family conversations, most respondents said they’d never had detailed conversations about topics like long-term care, living expenses in retirement, estate planning and the location of important documents. The survey found that the majority of both parents and children felt that discussions about financial planning don’t need to happen until the parents have retired and either health or finances are an issue. But this might be too late. To eliminate any confusion and to clarify expectations for all family members, conversations should happen well before parents intend to retire or health issues arise.
A qualified elder law attorney can help facilitate family understandings on these important matters.
Reference: Money (June 28, 2016) “Here’s What Your Aging Parents Say They Want You to Do for Them”