Data & Research November 15, 2012

Parents, Adult Children Need Open Dialogue

Adult children and their parents struggle to communicate about retirement planning, providing care for elderly parents and inheritance strategies.
Reported by

Fidelity Investments’ Intra-Family Generational Finance Study found one-quarter (24%) of adult children believe they will have to help their parents financially in retirement, while nearly all (97%) parents say they will not need help.   

Approximately 95% of parents and their adult children say at least some conversations have taken place, but very few adult children believe the conversations were very detailed. Sixty-five percent of adult children and parents agree that discussing retirement readiness is an important topic, but 72% disagree on the level of detail that has been covered to date; and only 11% of children believe the conversations were very detailed.  

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In addition, the study revealed 97% of parents and children disagree about 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; on average, children underestimate the value of their parent’s estate by more than $100,000.    

While nearly nine in 10 (89%) adult children and parents agree that health and eldercare is an important topic of conversation, 63% disagree on the level of detail that has been covered to date. Only 10% of children believe the conversations were very detailed. Eighty-nine percent of adult children and parents agree estate planning is an important topic to discuss, but 70% disagree on the depth of the conversations that have taken place, and only one in five (19%) children say the discussions have been very detailed. 

(Cont’d…)

Why Aren’t They Talking?  

While more than nine in 10 (94%) 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% of parents is they do not want their adult children to overly rely on a potential inheritance, and the top barrier for adult children (40%) is that they feel like it is not any of their business to ask their parents about these topics.     

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

Only one in three (34%) respondents agree on the best time to start these discussions. Parents are more likely to cite when they near or enter retirement (37%) as the right time, while children indicate they would like to have a conversation before their parents retire or have health issues (37%).  

When adult children and their parents had detailed conversations about these critical topics, 83% agreed the other was willing to talk about wills and estate planning, eldercare or covering retirement expenses. Peace of mind of parents jumps from 61% to 91% 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% versus 30%—among those who have not had detailed conversations. 

Fidelity offers a Family Finance Conversation Guide, and more information about its survey is here.  

Diversions November 15, 2012

Not Even $5 and Still a Bargain

Among things to be thankful for: next week’s turkey dinner costs, on average, a mere 1% more than it did last year.
Reported by

For 27 years, the American Farm Bureau Federation (AFBF) has conducted an informal price survey of Thanksgiving Day dinner table classics: turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, in quantities sufficient to serve a family of 10. There is also plenty for leftovers.

This year’s feast for 10 carries an average cost of $49.48, just 28 cents more than last year’s average of $49.20. The star of the show, a 16-pound turkey, came in at $22.23—roughly $1.39 per pound, an increase of about 4 cents per pound, or a total of 66 cents for the whole bird, compared with 2011. The turkey was the biggest contributor to the final total, showing the largest price increase compared with last year.

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Savvy shoppers may pay even less for frozen turkey compared with AFBF’s 155 volunteer shoppers, who checked prices at grocery stores in 35 states.

Miscellaneous items, including coffee and ingredients necessary to prepare the meal (onions, eggs, sugar, flour, evaporated milk and butter) increased in price, to $3.18. A dozen brown-n-serve rolls also increased slightly, up 3 cents, to $2.33.

Some menu items actually took a price dip: a half pint of whipping cream, $1.83, down 13 cents; a 14-ounce package of cubed bread stuffing, $2.77, down 11 cents; three pounds of sweet potatoes, $3.15, down 11 cents; one gallon of whole milk, $3.59, down 7 cents; fresh cranberries, $2.45, down 3 cents; one pound of green peas, $1.66, down 2 cents; a 30-ounce can of pumpkin pie mix and two nine-inch pie shells, $5.53, down 2 cents.

A one-pound relish tray of carrots and celery remained the same, at 76 cents.

Farm Bureau volunteer shoppers are asked to look for the best possible prices, without using promotional coupons or special-purchase deals, such as spending $50 and receiving a free turkey. Shoppers with an eye for bargains throughout the country should be able to purchase individual menu items at prices comparable to the Farm Bureau survey averages. Another option for busy families without a lot of time to cook: ready-to-eat Thanksgiving meals for up to 10 people, with all the trimmings, which are available at many supermarkets and take-out restaurants for around $50 to $75.

The AFBF survey was first conducted in 1986. While Farm Bureau does not make any scientific claims about the data, it is an informal gauge of price trends around the nation. Farm Bureau’s survey menu has remained unchanged since 1986 to allow for consistent price comparisons.


 

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