Baby boomer parents need to add an item to their retirement checklist: having “the talk” with their kids about how their lives will change in retirement.
US News & World Report’s recent article, “The Talk to Have With Your Kids Before You Retire,” acknowledges that this can be uncomfortable for some parents. However, parents need to prepare adult children for their impending retirement. It’s crucial to begin financial discussions early in retirement. That makes it easier in later years, when cognitive decline can affect decision-making. Talk with your children about these things regarding your retirement:
Notice. Your retirement may affect your children, especially if you plan to move or are assisting them financially. Let them know of your retirement plan five years prior to leaving the workforce, and remind them about it every now and then.
Financial info. Some parents don’t want their kids to know the details of their finances, while others share information and even involve them in the process. If you’re more open and honest with your kids about your financial information, they’ll feel secure that their parents are OK. If you are struggling, you should also let them know that.
Financial support. You may need to stop supporting your kids, so that you can retire. If you have a kid living with you in the house and you’re helping to pay their bills, start working on a strategy to get them off your payroll and out of the house.
Estate plan. Talking to your children about your estate planning to avoid confusion and sibling rivalry during a very stressful time. Talk about which child will be executor, so there are no surprises.
New lifestyle. An important discussion between parents and children is how you want to live. This includes location, which might change with the seasons, deciding if you want to live close to children and grandchildren, or prefer a spot with opportunities to enjoy retirement. You should also let your kids know your preferences for an assisted living facility or a nursing home and discuss paying for long-term care.
Contact info. If a child is named as an executor, successor trustee, or as a beneficiary on retirement accounts and life insurance policies, be sure he knows who to contact, if something happens to you. You may want to give your children a list of the people and institutions involved in your planning, including your estate planning attorney.
Reference: US News & World Report (June 8, 2018) “The Talk to Have With Your Kids Before You Retire”