Family

Retired? How to talk to your adult children about your finances

April 18, 2018

When you reach retirement age, you will most likely have adult children who are concerned about your physical, mental and financial welfare. However, they will need you to be completely open with them if they are going to help you in any way. This can be difficult, but if you have a plan laid out to follow then the process of speaking to your adult children about your finances when you retire.

Try not to avoid it

For many retirees, the reluctance to speak to your children about the state of your financial affairs stems from the fear of making the feel trapped. Another reason could be that you do not want your adult children to rely too much on their inheritance as their main form of income, in case you experience financial difficulties and lose this money.

You may also feel that discussing your future finances should wait until, well, the future but if you leave this discussion for too long, this reluctance could do more harm than good. You need to speak to your adult children about all of your debts, such as the mortgage repayments or any vehicle finance repayments you may have left.

Consider neutral territory and have a third party present

If you have a difficult relationship with your children, or if you prefer to speak about serious issues in a neutral place, then you should look into having a meeting in the office of a financial adviser or lawyer’s office.

An objective third party can set up a meeting and deliver good or bad news. They will better be able to give advice as they are not part of the family rivalries or contentions. However, even if you have planned this visit in advance, you should expect your children to be nervous about the outcome of what the financial adviser says about your finances. Reassure them that you are meeting this way in order to have a clear and concise idea about your future as a retiree.

Have a plan in place

Before you invite all of your children to a meeting about your finances, you will need to have a plan in place. Consider your finances before setting up the plan: are they rocky and will you be needing help in the future, or are you financially sound and without issue?

Having a plan in place will help to achieve the goal of the conversation, which could be telling your children your plans with your retirement fund or how you will earn money to supplement your pension for monthly expenses. Be sure to create this plan well ahead of the meeting so that you are not left fumbling for words when your children ask questions.

Decide what information to include

At the bare minimum, you should let your children know where they will find the relevant documents should something happen to you, such as your will and insurance details. You should also offer a summary of your financial well-being, but be prepared to give more details should your children express concern over your situation.

Your adult children may need to know the value of bank accounts and the amount you owe to banks and financial institutions. While this may be a difficult topic of discussion, you need to be open with them in order for them to be prepared for the eventuality of your death. For those who have a difficult relationship with their children, it may be best not to divulge the exact amount of your savings.

Include all children in one meeting

For the sake of efficiency, it is best to include all of your adult children at one meeting, rather than meeting separately with each one. This will also ensure a consistent message and will keep everyone on the same page with regard to plans before, during and after your retirement.

Including all of your children at one meeting also means that there is less chance of an argument after you die, when you will be unable to rectify the situation. Your adult children may also miscommunicate with each other if you meet with them separately, so set aside a day of the week or weekend when everyone can get together. Be sure that all grandchildren will be taken care of for the day, as they can be distracting during a serious conversation.

Keep calm and carry on

Talking to your adult children about money may be daunting, but if you follow some basic hints and tips, the process can go smoothly. Remember to keep calm and avoid confrontation, as money can be a contentious topic for many families. Avoiding talking to your adult children about your finances is not ideal, as they will not know what to do when the time comes and you pass away. Having a plan in place and meeting in a neutral territory will help to make the conversation flow and feel less anxious for everyone involved.

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