Families need to open up about money as they grow increasingly more interdependent, say researchers of a new report from Hearts & Wallet, a retirement and investment trends research firm based in Hingham, Mass.
According to the findings, one in five pre- and post-retirees support their children financially, up from 18% in 2012. Meanwhile, the percentage of primary breadwinners between the ages of 53 and 64 supporting their parents also edged up, to 12% from 7% in 2012. Despite the growing interdependence, two out of three families avoid talking about intergenerational finances.
Break the taboo on family financial discussions this Thanksgiving. The sooner the talk, the easier it is to plan for the future, Laura Varas, a principal of Hearts & Wallets, said in a statement.
Varas noted that older and younger generations have many things they can learn fromand offereach other. The older family members have decades of experience with investments and different service models, while the younger members are adept with using new technologies.
To jumpstart family discussions, family members should set common goals, such as saving for a relatives college education. Families with goals saved an average of $4,619, or nearly two-thirds more than the $2,764 families without goals saved on average, according to Hearts & Wallets.
Interestingly, its aspiring to the goal that matters, not whether you actually reach the goal or not, Chris Brown, a principal of Hearts & Wallets, said in a statement.
Goals to stop work altogether inspired the highest level of savings ($6,500 on average) followed by those to pay for someone elses college ($6,000 on average).
Even though families avoid talking about money, they nevertheless rely on each other for financial advice. Almost three in five American households (59%) rely on their family members for financial information, making relatives their third most important resource, just behind their financial advisors (64%) and themselves (86%). Nearly one-quarter of households met their financial professionals via a referral from a family member or friend.
The report surveyed more than 5,400 U.S. households in July of 2013.