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A surprisingly high percentage of Americans have not had crucial financial conversations with their families, according to a new report by Merrill Lynch.
In a survey of 5,415 Americans age 25 and older, some 70% of adult children say they have not had a discussion with parents about their retirement and other issues related to aging. Meanwhile, more than half (56%) of parents age 50 and older say they have not discussed any important financial issues — including their wills, health directives, inheritance plans, and where they plan to live in retirement — with their adult children.
What's more, many adult siblings haven't discussed their plans for helping their parents. Just one in four (24%) siblings age 50 and older have discussed how their parents will be financially provided for as they get older.
The biggest barriers to having these sensitive conversations, the study finds, are a fear of family conflict and feeling too uncomfortable to discuss the topics openly.
However, waiting to discuss parents' aging means many are caught off guard by serious life events. Across family relationships, the most common reason families begin these tough discussions is the death or illness of a family member or friend , according to the study.
“Proactive discussions and coordination with family members can be the difference between smooth sailing and significant hardship when confronting financial challenges leading up to and through retirement,” said David Tyrie, head of retirement and personal wealth solutions at Bank of America Merrill Lynch, in a statement. “Although many of these topics can be difficult to discuss, there is a clear benefit to having family conversations and planning ahead."
On average, people who speak openly with family members on these topics are nearly twice as likely to say they would be well prepared financially if faced with a family challenge.
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