Older parents, take heart: Your children are willing to help support and care for you as you age, according to a new study from Fidelity Investments. There's only one hitch: Most families don't agree on exactly what that help should be, and what responsibilities children should assume.
Fidelity's third Family & Finance report, released Tuesday, surveyed two members of each family polled -- one parent and one adult child -- on topics like retirement income, eldercare, and estate planning. The results: Nearly two in five families disagree on the roles those children should play as parents age.
Such mismatches can set up big emotional and financial problems later on, says John Sweeney, executive vice president of retirement and investing strategies at Fidelity. Families shouldn't wait till a health problem or other unexpected event forces a rushed caregiving or financial planning conversation he adds.
One clear generational split was on financial support for parents -- but with an outcome that's better for elder generations. While more than 90% of parents surveyed said it would be unacceptable to become financially dependent on their children, only 30% of children shared that view -- and nearly one-fourth are already planning to support their parents financially.
So far, so good.
Yet while more than 90% of parents think one of their children will become executor of their estate, 27% of their kids don't know that they're expected to take on the role. (If you're an oldest child, get ready: 55% of parents tap the first-born for this job.)
And if you're expecting one of your adult children to become your caregiver as you need extra assistance, be sure to let them know. Three-fourths of parents assumed one of their kids would take over long-term care responsibilities, but that was news to 40% of the adult children who were tapped for the role. (Daughters, consider yourself warned: 58% of the time, the child picked for caregiving duty is female.)
There were other expectation divides when it came to assistance with financial tasks. Almost 70% of parents expect that at least one of their children will help manage investments and retirement finances, and a similar percentage thought the kids would pitch in on household expenses, budgeting and bills. That was news to the adult children -- 36% didn't know they were expected to handle investments, and 44% were unaware their parents wanted help with household budgets.
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The primary reason children have no clue that their parents expect help with any of of these tasks: Parents haven't ever told them.
That's a problem, Sweeney says. "There are lots of reasons why parents might chose one child over another -- maybe because they are geographically closer or have a particular skill set that makes them better qualified to handle certain roles," says Sweeney. "But if that person doesn't know they'll be playing that role, they aren't prepared. They could be lacking important input from a parent, not have access to proper paperwork, and all that delay and confusion could led to extra expenses, parent wishes being left unfulfilled, and -- at worst -- poor care."
When asked specifically about family conversations, most respondents told Fidelity that they had never had detailed conversations about topics like long-term care, living expenses in retirement, wills and estate planning -- even where important documents are kept.
Almost half of parents said they have not had detailed discussions with family members about long-term care and eldercare -- and an additional 23% of parents have never talked about the subject with their kids.
Parents do a little better when it comes to talking about retirement expenses, with about two-thirds reporting detailed conversations with their kids on the matter; only 16% have not had any conversations on the topic at all.
But are their kids paying attention? While 69% of parents say they've talked at length with their children about their will and estate planning decisions, about half of their adult kids say there's been no such conversation. And three in 10 families couldn't agree on whether the kids knew where to find key documents like wills, power of attorney and health care proxies.
"Parents don’t want to acknowledge these issues and children feel uncomfortable raising them, but you can't wait for the other person to bring the topic up," says Sweeney. "You're going to have to run a play around end-of-life care or death someday. You need to know the game plan and everyone's role ahead of time."
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When to Talk
So when should families have these discussions? It's such a tricky question that two-thirds of families surveyed were in disagreement.
The majority of both parents and children feel discussions of financial planning don't need to happen until the parents have retired and either health or finances become an issue. But Sweeney warns this may be too late; he argues that conversations should actually occur well before parents intend to retire or health issues arise, in order to avoid confusion and clarify expectations for all the family members.
Families who'd had at least some detailed financial conversations felt more secure about the younger generation's future -- on both emotional and financial levels -- than families who hadn't.
"I had my family sit down and go through my parents' finances and tackle these questions about eldercare and estate planning, and my mom hugged me at the end," says Sweeney. "We all felt better that we had had these conversations, that we had heard from mom what she wanted."