The Money Communication Gap Between Adult Children and Parents

When it comes to money, older parents might be pleasantly surprised to know how much their adult children look up to them, at least in terms of their skills at managing money and investments. For the most part, however, parents don't return the love, at least when it comes to money.

A new survey of parents and adult children, sponsored by Fidelity Investments, surveyed parents who were at least 55 and had $100,000 average annual household incomes and nearly $530,000 in assets. It then polled the parents' adult children, who had to be at least 30 years old. These adults turned out to have average household incomes of more than $127,000 a year but only about $80,000 in assets.

Fidelity found that children looked up to their parents' money skills. Nearly half of the adult children actually said their parents had made no financial mistakes. Parents, for their part, were not so charitable about their kids. Specifically, they said their children:

-- had too much debt (42 percent)

-- had not begun retirement savings soon enough (38 percent)

-- had not built a sufficient rainy-day emergency fund (36 percent)

[Read: Boomerang Kids vs. Parents: How to Minimize Conflict.]

"Children really do view their parents as role models when it comes to investing," says Kathy Murphy, president of Fidelity Personal Investing. Understanding investments and being comfortable investing money are complex topics, she notes, and children "just assume their parents understand it better than they do."

Fidelity also found an astounding gap between parents and children when it came to the question of whether the child would take care of his or her parents if they became ill--the kids said yes and the parents emphatically said they would not need the help. Children also underestimated their parents' estate by an average of more than $100,000. This misjudgment may help explain why adult children were off-base in projecting the odds their parents would need help.

This difference also extended to specific financial help, according to Fidelity. Roughly 25 percent of the adult children said they expect to provide money to their parents, while 97 percent of parents said they would not need such help.

Even though they expect to help their parents, about 40 percent of the adult children surveyed said they expected their parents to be able to afford very comfortable lifestyles in retirement. Yet only half as many parents in this relatively affluent sample--20 percent--felt they had enough money for a comfortable retirement.

[Read: How to Help Your Children Without Sacrificing Your Retirement.]

Spurring more parent-child communication about money is not easy. Yet Murphy notes that one of the silver linings of the deep recession is that people began paying a lot more attention to their savings and investment needs. Savings rates increased, she recalls, and average attendance at Fidelity investment seminars throughout the country soared 70 percent.

Fidelity has developed a set of six "conversation starter" questions it suggests consumers ask themselves and other family members. Younger children can be included in some of these conversations, but adult children should participate in all of them:

1. "Where's my money right now?" Knowing where your money is, Fidelity says, can be just as important as how much you have. It's important to know who holds your accounts, as well as how to access them.

2. "Is any of that dedicated to retirement?" Do you have a 401(k) at work? An IRA or annuity? Have you been specifically saving for retirement?

3. "How is our debt?" Managing debt is one of the most important parts of keeping your family financially healthy and a key part of establishing a solid long-term saving strategy. Some types of debt are good, the company points out, but there are ways to minimize the kind of debt that works against you. One way to start is by making a list of the things you can pay off, and when you'll be able to do it.

4. "How do I picture retirement?" Want to travel? Pursue a long-neglected passion? If you haven't even considered what your life might be like during retirement, you're not alone, Fidelity says. But by starting to think about it now, you can be better-prepared when you get there.

5. "How does retirement fit into our overall savings goals?" Retirement is just one of many things you're saving for, the company advises. So it helps to look at all of those things together and talk about which ones are most important to you.

6. "What does marriage--or divorce--mean for our long-term saving?" Combining or splitting up finances can bring a lot of stress into your life. It's a good idea to be honest about your money and your goals to avoid any unexpected situations.

[Read: 50 Smart Money Moves.]

True parental love would include parents taking the time when their kids are younger to teach them about the financial facts of life. Having such conversations would help children become better savers and investors. But it would also foster a pattern of parent-child communication that would help the entire family over time.

"It's important for parents, as part of their legacy to their children, to pass on to them their wisdom about money and savings," Murphy says.

More From US News & World Report


Get stories like this on the Yahoo app and discover more every day.
Download it now.
  • EU likely to hand Apple Irish tax bill of over 1 billion euro - source
    EU likely to hand Apple Irish tax bill of over 1 billion euro - source Reuters - 3 minutes 37 seconds ago

    The European Commission will rule against Ireland's tax dealings with Apple on Tuesday, two source familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes. The Commission declined … More »

  • EU likely to hand Apple Irish tax bill of over 1 bln euro: source
    EU likely to hand Apple Irish tax bill of over 1 bln euro: source Reuters - 7 minutes ago

    The European Commission will rule against Ireland's tax dealings with Apple (AAPL.O) on Tuesday, two source familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes. The Commission … More »

  • Yale grad students file petition seeking union certification Associated Press - 18 minutes ago

    Yale University graduate students on Monday petitioned the National Labor Relations Board for union recognition, saying they have organized to address concerns surrounding pay and benefits and give themselves ... … More »

  • South African Treasury, Eskom row over coal contracts as government rifts deepen Reuters - 30 minutes ago

    South Africa's Treasury and state-owned Eskom clashed on Monday over a probe into coal contracts between the power utility and a company linked to the wealthy Gupta family that is accused of holding undue political sway over President Jacob Zuma. … More »

  • European privacy regulators to scrutinise WhatsApp privacy switch Reuters - 34 minutes ago

    Facebook's move to relax the privacy policy of WhatsApp, the world's most popular mobile messaging application, will be closely scrutinised, the chair of Europe's leading group of privacy regulators said on Monday.     WhatsApp, which counts more … More »

  • US alarm as Turkey warns Syrian Kurd militia of more strikes
    US alarm as Turkey warns Syrian Kurd militia of more strikes AFP News - 39 minutes ago

    Turkey warned Monday it would carry out more strikes on a Syrian Kurdish militia if it failed to retreat beyond the Euphrates River, as Washington voiced alarm over weekend clashes. Turkish forces pressed on with a two-pronged operation inside … More »

  • Berlin to require mums to come clean on 'milkmen's kids'
    Berlin to require mums to come clean on 'milkmen's kids' AFP News - 57 minutes ago

    Germany has drafted a law requiring mothers to inform their partners if their children were fathered by another man, Justice Minister Heiko Maas said on Monday. It would apply to cases in which men who believe they are not the real fathers seek … More »

  • RUBBER-Tokyo futures prices after evening session Aug 29 Reuters - 1 hour 25 minutes ago

    Following are prices for Tokyo rubber futures at the end of the Tokyo market's evening session on Aug 2016. Contract Day Volume Evening Volume * Sep 156.0 25 - - * Oct 156.0 86 156.0 1 * Nov 153.8 75 153.6 ... … More »

  • Four Nomura Investment Bankers Said to Leave as Firm Shrinks Bloomberg - 1 hour 36 minutes ago

    Jason Fertig, who led Nomura’s health-care investment-banking group in the Americas, and Matthew Upton, a banker in the firm’s global-technology team, are joining Mizuho Financial Group Inc., the people said, asking not to be identified discussing … More »

  • S&P 500 Approaches High on Consumer-Spending Data; Dollar Gains Bloomberg - 1 hour 38 minutes ago

    Japanese shares led gains among the biggest equity markets after central bank chief Haruhiko Kuroda reiterated a pledge to boost stimulus if needed. The monthly U.S. payrolls report due Friday will provide more clues on whether policy makers will … More »

  • Markets Right Now: Banks lead US stocks higher on rate hopes Associated Press - 2 hours 0 minutes ago

    The latest on developments in global financial markets (all times local): 11:45 a.m. Banks are leading stocks higher at midday as investors hope for higher interest rates. Wells Fargo, the nation's largest ... … More »

  • JPMorgan Index Move Puts $370 Billion Islamic Debt on Fund Radar Bloomberg - 2 hours 5 minutes ago

    Shariah-compliant notes will be eligible for inclusion in five JPMorgan gauges from Oct. 31 and will account for between 0.35 percent to 0.99 percent of total assets on the benchmarks, according to an Aug. 18 statement by the bank. Sukuk will be … More »

  • Yuan Bears Emerge From Hibernation as Fed Threatens G-20 Calm Bloomberg - 2 hours 6 minutes ago

    Derivative markets are pointing to renewed bets on yuan depreciation, with a three-month measure of expected price swings poised for the biggest monthly increase since January. The increased pessimism comes after a period of calm that sent the … More »

  • Statoil expects 'loads of' M&A deals coming up, strategy chief says
    Statoil expects 'loads of' M&A deals coming up, strategy chief says Reuters - 2 hours 14 minutes ago

    ** Says: "If you look at the acquisition and divestment markets for upstream oil and gas on a global basis over the last five years, they have been falling to all-time lows... but there are a number of active spots, one of those is in certain parts … More »

  • Gold hits near 5-week low after Fed strikes hawkish note
    Gold hits near 5-week low after Fed strikes hawkish note Reuters - 2 hours 31 minutes ago

    Gold slid to a near five-week low on Monday after comments from top Federal Reserve officials fuelled speculation that U.S. interest rates would rise sooner rather than later, boosting the dollar. Speaking at a meeting of leading central bankers in … More »

  • Liz Weston: 5 money myths you probably believe
    Liz Weston: 5 money myths you probably believe Associated Press - 2 hours 55 minutes ago

    Managing money can be complicated, and myths are often born from people's struggles to make it simpler. But simplistic solutions can cost you instead of saving you money. If you believe any of these five ... … More »

  • BOJ Needs Massive Move to Shock & Awe, $2 Trillion Investor Says Bloomberg - 3 hours ago

    “It is how much they do, and whether they can create that kind of shock and awe at this point in the cycle,” said Mark Haefele, global chief investment officer at UBS Wealth Management, in a Bloomberg Television interview, on Monday. “They could … More »

  • Grain lower, livestock mixed Associated Press - 3 hours ago

    Grain futures were lower Monday in early trading on the Chicago Board of Trade. Wheat for Sept. delivery was 10.50 cents lower at $3.7260 a bushel; Sept. corn was 2.25 cents lower at $3.14 bushel; Sept. ... … More »

  • Singapore's GIC buys stake in Vietnam's bank AFP News - 3 hours ago

    Singapore sovereign wealth fund GIC will buy a 7.7 percent stake in Vietnam's biggest bank, both companies said in a joint statement on Monday. GIC signed a memorandum of agreement to buy 305.8 million new shares of Vietcombank, the fund's first … More »

  • Copper Drops to Lowest in Two Months on Ample Supply, China Woes Bloomberg - 3 hours ago

    Inventories tracked by exchanges in Shanghai, London and New York climbed five straight days last week to the highest since May. Barclays said in a report that a recent slump in the copper market “may be an early warning sign of weakening in China’s … More »

  • Wall St rises as hawkish Fed boosts financial stocks
    Wall St rises as hawkish Fed boosts financial stocks Reuters - 3 hours ago

    Yellen, addressing a gathering of global central bankers on Friday, said the central bank was close to meeting its goals of maximum employment and stable prices, while describing consumer spending as "solid". Yellen gave little indication of when … More »

  • Foreign experts in Egypt to probe Russian airliner crash AFP - 3 hours ago

    Russian and German experts arrived in Cairo Monday to inspect the wreckage of a Metrojet plane downed over Sinai, hoping to pinpoint how it came apart, the aviation ministry said. The Islamic State group ... … More »

  • Jualo receives additional ‘multi-million US Dollar’ in their Series A round
    Jualo receives additional ‘multi-million US Dollar’ in their Series A round e27 - 3 hours ago

    In June, the e-classifieds platform announced a Series A round led by NSI Ventures Last June, e-classifieds platform Jualo announced that it has received a “multi-million US Dollar” Series A funding led by NSI Ventures. Today, the Jakarta-based … More »

  • US stocks higher amid focus on possible Fed rate rise AFP - 3 hours ago

    Wall Street stocks were slightly higher Monday as traders focused on the US July jobs report coming later this week which could, if strong, support an early rate rise by the Federal Reserve. Fed Chair ... … More »

  • Trudeau Heads to China to Woo Trade Amid Weak Canada Growth (2) Bloomberg - 3 hours ago

    Trudeau departs Monday on a 10-day trip to Beijing, Shanghai, Hong Kong and Hangzhou, where he’ll attend the Group of 20 summit. He’ll meet with Premier Li Keqiang, Alibaba Group Holding Ltd.’s Jack Ma and Hong Kong billionaire Li Ka-Shing, … More »

Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
to view quotes in your portfolios.


  • Most Actives
    Most Actives
    NamePriceChange% Chg
  • % Gainers
    % Gainers
    NamePriceChange% Chg
  • % Losers
    % Losers
    NamePriceChange% Chg

Market Data

  • Currencies
    NamePriceChange% Chg
  • Commodities
    NamePriceChange% Chg
  • Bonds
    TreasuryYield (%)Yield Change