The topic of personal finances is never an easy one to discuss in a family. Adult children and their parents are often at opposite ends of the spectrum when it comes to best-practice methodology for future planning. Retirement is a difficult subject to broach, and I know because I have parents who are entering this critical stage of their lives. Unfortunately, poor life decisions lead to extreme hardship in retirement years.
Never Discuss Retirement Planning at Retirement Age
To avoid these hardships, I believe it’s imperative that we explore the many options available for retirement planning. A study conducted by Fidelity found that 33% of parents and their children believe that open discussions about finances should be held after retirement when health issues and money issues become a hot topic.
This is absurd, because by that stage it is already too late and retirement planning becomes crisis planning. Of course, sensible advice dictates that you should plan for your retirement well before your retirement. In other words, you should put aside money from every paycheck in a growth-oriented portfolio that will yield dividends.
Retirement planning needs to be broached with sensitivity. Family finances are always a point of contention. To complicate matters further, retirement planning is difficult in a slow growth jobs market. Retirement planning isn’t only about providing money, it’s about caregiving, tax planning and estate planning as well.
The Wheel Turns Full Circle
So, when should you discuss retirement planning with your family? The obvious answer to this question is well ahead of time. It’s difficult enough to try and make ends meet with a regular paycheck – let alone plan for retirement. The sooner you start, the better. Adequate preparation is essential for retirement planning.
Emotions must be put aside, and open communication needs to be had. The wheel comes full circle in life, what with parents taking care of their young, and the young taking care of their parents in old age. With that in mind, retirement planning is not only the responsibility of the parents – it is the joint responsibility of the parents and the children.
The findings of the Fidelity study make for interesting reading. For example, 30% of adult children believe it is unacceptable to be financially dependent on their children while 93% of parents believe that is unacceptable to be dependent on their kids. Another interesting statistic is about the designated roles for parents and children. 40% of families disagree about what role their children should take as their parents age. And over 67% of families argue about the best time to discuss parents’ finances.
Clearly, frank discussions are needed to better prepare parents and their adult children for life after retirement. There are many conventional ways to save up for retirement, including conventional 401(k)s, savings accounts, foreign asset holdings, property, and the like. Yet retirement is not the end of life, it is merely the end of an active working life. Retirees can still engage in profitable activities such as binary trading. With so many years of experience already behind them, many retirees are expertly poised to capitalize on market movements with this form of home-based trading. An active social life, including volunteer opportunities, sports and travel are often on retirees’ bucket lists. An additional income stream is a great way to supplement these activities.
Retirement is a new chapter in anyone’s life. It marks the end of the rat race, and the beginning of the golden years. It is at this point that parents get to enjoy the fruits of their labor over the years. Retirement needn’t be perceived so negatively; it is an opportunity for reflection, enjoyment, and appreciation of a life well lived.