Study Finds Parents and Adult Children Struggle to Communicate about Critical Financial Decisions

A new study by Fidelity revealed that parents and their adult children have difficulty communicating with each other about financial decisions, such as inheritance and estate planning, eldercare, and retirement. Learn about tips and new resources that can make family discussions about financial decisions easier.


Fidelity Investments® has released the results of its first-ever Intra-Family Generational Finance Study, which shows adult children and their parents struggle to communicate on key financial topics that include retirement planning, providing care for elderly parents and inheritance strategies. The study analyzed levels of disagreement and miscommunication between parents and their adult children on a range of sensitive topics, and found that adult children are not only anxious about their own finances, but also their parents’ future health, retirement security and estate plan.     

Highlighting the vast disconnect, the study revealed 97 percent of parents and children disagree on whether a child will take care of his or her parents if they become ill. Major miscommunication also exists when discussing inheritance and estate planning. In fact, children are underestimating the value of their parent’s estate by more than $100,000, on average. Additionally, neither side is effectively communicating about retirement readiness. As a result, 24 percent of children believe they will have to help their parents financially in retirement, while nearly all (97 percent) of parents say they will not need help.

“Given the economic pressures facing families today, it’s troubling that detailed conversations are not happening, especially among those in the sandwich generation who may be grappling with competing financial priorities ranging from planning for their own retirement and paying for a child’s college education to dealing with eldercare, estate planning and retirement challenges with their parents,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. “Whether it’s a parent facing a shortfall in retirement income or an adult child weighing the tax implications of an inheritance, too often discussing these issues is considered taboo within families, but real emotional and financial consequences emerge when such conversations don’t happen or lack sufficient depth.”


Adult Children Seeking Greater Detail from Parents on a Range of Topics

While approximately 95 percent of parents and their adult children say at least some conversations have taken place, significant gaps in communication were evident in a number of areas including living in retirement, eldercare and estate planning. In all cases, very few adult children believe the conversations were very detailed. For example:

  • Health and Eldercare Discussions Significantly Lack Detail: While nearly nine in 10 (89 percent) adult children and parents agree that health and eldercare is an important topic of conversation, 63 percent disagree on the level of detail that has been covered to date. In fact, only 10 percent of children believe the conversations were very detailed.
  • Major Disagreement on Depth of Estate Planning Conversations: Almost nine in 10 (89 percent) adult children and parents agree estate planning is an important topic to discuss, but 70 percent disagree on the depth of the conversations that have taken place and only one in five (19 percent) children say the discussions have been very detailed.
  • Retirement Readiness Not Discussed in Detail: 65 percent of adult children and parents agree that discussing retirement readiness is an important topic, but 72 percent disagree on the level of detail that has been covered to date; and only 11 percent of children believe the conversations were very detailed.

In fact, when asked who they are comfortable with when talking about their financial situation, the study found that both parents (68 percent) and their adult children (60 percent) feel more comfortable discussing with a third-party financial professional than to each other.


Barriers to Starting the Conversation Exist on Both Sides

While more than nine in 10 (94 percent) adult children and their parents agree it is important to have frank conversations about wills and estate planning, eldercare or covering retirement expenses, there are significant barriers to even starting these discussions within families. The top barrier noted by 30 percent of parents is they don’t want their adult children to overly rely on a potential inheritance. And for adult children, 40 percent say the top barrier is that they feel like it’s not any of their business to ask their parents about these topics.

The study also found that the timing of these discussions is a barrier. In fact, only one in three (34 percent) parents and their children agree on the best time. Parents are more likely to cite when they near or enter retirement (37 percent) as the right time, while children indicate that they’d like to have a conversation before their parents retire or have health issues (37 percent).

“With parents living longer and the increasing financial complexity that the sandwich generation faces, it’s critical that families break down barriers, have these important conversations to make informed decisions and take control of their finances, rather than reacting to a crisis after it’s too late,” said Murphy. “Families need to discuss these topics earlier and in greater detail, then plan accordingly, as it’s possible that adult children may have to make financial and healthcare decisions for their parents later in life.”

Once Started, Conversations Are Well Received and Beneficial to Families

The study also validates the assumption that taking the time to have more detailed conversations can dramatically increase peace of mind, reduce anxiety and foster additional discussions. When adult children and their parents had detailed conversations about these critical topics, 83 percent agreed the other was willing to talk about wills and estate planning, eldercare or covering retirement expenses.

The study also uncovers the overwhelmingly positive impact of having these conversations about estate planning. For example, peace of mind of parents jumps from 61 percent to 91 percent when comparing those parents who have not had detailed conversations with their adult children versus those who have. Additionally, parents who have had detailed conversations with their adult children feel significantly more at ease about their children’s financial future – 68 percent vs. only 30 percent – among those who have not had detailed conversations.

New Resources to Help Families Connect and Plan, Increase Peace of Mind and Reduce Anxiety

This lack of communication may also have an adverse effect on adult children and their feelings about their own retirement readiness. In fact, “anxious” is the top feeling they cited (36 percent) when describing their own retirement. In addition to having thousands of trained investment professionals to help investors develop strategies to protect and pass wealth between generations, Fidelity has published a Family Finance Conversation Guide and Viewpoints article on its Personal Economy web site, which includes a how-to discussion guide and checklist to help start conversations and facilitate dialogue between parents and their adult children.

For more information on the Intra-Family Generational Finance Study, an executive summary and infographics can be found on     



About the Study
The Fidelity Personal Economy Intra-Family Finance Generational study was conducted online among U.S. parents and their adult children by GfK Public Affairs and Corporate Communication using GfK’s KnowledgePanel® during the period of July 24 – August 29, 2012. To qualify, parents had to be at least 55 years of age, have an adult child older than 30 and have investable assets of at least $100,000. Their children qualified if they were at least 30 years of age, had money saved in an IRA, 401(k) or other investment account. In addition, they must have at least $10,000 saved.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.8 trillion, including managed assets of $1.7 trillion, as of September 30, 2012. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit