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The most important holiday conversation

Looking for a holiday gift that will improve your well-being in retirement? What if it would also help your family? And what if it didn’t cost any money?

If you’re intrigued, here’s the gift I'm talking about: taking time to sit down with your close family members and discuss finances in your retirement years or your wishes regarding end-of-life care. Now that may not exactly sound like a cheery conversation at the holiday dinner table, but that’s exactly the problem. Too many people just don’t feel comfortable talking about finances or life-and-death issues with their adult children or other relatives. While this reticence is understandable, the unfortunate consequence is that they may end up being a burden on their family or may not have their wishes carried out after they die. 

A recent study by Merrill Lynch and Age Wave, a research and consulting firm focused on aging, provides valuable insights into these issues. Here are some key findings from their study, titled "Family and Retirement: The Elephant in the Room":

  • The top two worries in retirement cited by baby boomers are running out of money to live comfortably, cited by 38 percent of survey respondents, and being a burden on family, cited by 31 percent. For the current generation of retirees, these two worries are cited equally at 31 percent of respondents.
  • There’s a dangerous absence of discussion and planning among family members about retirement finances and end-of-life preferences. For example, more than half of people age 50 and over have not had conversations with their adult children about living arrangements in retirement, inheritance, or long-term care. Nearly one-third of people age 50-plus haven’t even had these discussions with their spouses. Just one in four people have discussed how their parents will be financially provided for or cared for as they get older.
  • Yet there’s a payoff for having such conversations: People who have had financial discussions with their spouses or adult children are almost twice as likely to say that they'd be well prepared if they were to face family challenges, such as the death of a spouse, forced early retirement, or a loved one needing long-term care.

Besides feeling uncomfortable talking about these issues, why else aren't people having these types of conversations? The study cites the following barrier:

  • 24 percent want to avoid family conflict
  • 17 percent think discussion won’t help
  • 13 percent think family members don’t want others to know how much money they have
  • 11 percent don’t want family members to know how much money they have
  • 10 percent don’t know how to start the conversation

Engaging the services of a financial professional to address the financial issues of multiple generations can help, the study found. Thirty-seven percent of respondents reported this would give them peace of mind for their family’s financial security, and 33 percent said it would help their family members communicate better about important family decisions.

The upcoming holiday season offers a great opportunity to start these conversations with your family members. If you don’t know how to begin, here are a few good websites with helpful suggestions:

  • Insurance company Genworth prepared their "Let’s Talk" publication on long-term care issues, providing helpful suggestions on how to start the conversation with loved ones about their desires for care at the end of their lives.
  • The Conversation Project, a nonprofit organization, offers a starter kit that can help you get your thoughts together and then have the conversation about treatment at the end of life.
In the past few years, my family has been through these issues with my mother, my father and my mother-in-law. I can testify to the peace of mind that comes from having these discussions, which ensured that their wishes were respected. The conversations simply started with, “We love you and want to know what your wishes are, so we can help carry them out.” Breaking the ice opened the floodgates.

So this holiday season, look for the opportunity to begin these conversations, if you haven’t already. You’ll need to think about the appropriate timing – most likely, you’ll want to address these issues after holiday celebrations and rituals, such as opening presents and indulging in the holiday dinner, are over. Look for a time when family members are relaxed and comfortable. And start from common ground, stating that you love each other and only want the best outcome for everybody.

In the long run, you’ll be glad you found the courage to address these critical issues.

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