You can’t retire from being a parent. But there are ways to plan for the challenges ahead.
Your 25-year-old MBA just moved home, your mother is celebrating her 85th birthday and your brilliant 30-year-old daughter just pitched you her can’t-miss start-up.
Congratulations, you’re officially CEO of Family, Inc.
Let’s not kid ourselves. These days, retirement isn’t just about us. Today, one-in-seven middle-aged adults support their grown children as well as their aging parents.2 Known as “The Sandwich Generation,” many of us find ourselves juggling our retirement planning while also supporting and caring for loved ones.
- 59% of parents would rather dip into retirement than have kids pay student loans
- 73% of parents provide support for a grown child
- 82% of initial startup funding comes from family, friends or savings1
We’re also living longer. Today’s 65-year-olds have a 50% chance of making it to their mid-80s, and it’s not uncommon anymore to reach 90 and beyond.3 That’s a lot to consider when planning for a retirement that could last more than two decades. Not to mention all of the other big questions like, when should you retire? And what if you have an unexpected health issue?
At Morgan Stanley, we understand that family wealth planning is challenging. That’s why our Financial Advisors believe the roadmap to a more comfortable future begins with two key family wealth considerations:
Have an Honest Conversation
For many families, there are few topics more taboo than money. Nearly 83% of affluent parents don’t discuss their finances with their kids, for fear of raising irresponsible adults.4 And 59% of adults are uncomfortable talking to their own retired parents about the cost of long-term care.5
One of the best solutions is an honest conversation with your family and a trusted Financial Advisor. Morgan Stanley Financial Advisors make family wealth discussions a top priority in the relationships they build with clients. They employ a goals-based process to discover family dynamics, aspirations, and values—getting to know the family’s needs beyond just investment strategy and risk tolerance.
The result is a tailored plan designed for today, while being flexible enough to grow with your family as things change.
Make Financial Fitness a Family Hobby
Once the cards are on the table, it’s time to educate. After all, a financially literate family is essential to building wealth that lasts. A great first step is educating your kids early about scholarships and the cost of college so they have some skin in the game and are prepared to handle some money matters on their own.
Next, make an effort to prepare adult children for their own financial future. Whether it’s helping them on the journey to their first home or simply making them aware of the dramatic benefits of saving early for retirement, teaching the basics goes a long way toward reaching dreams.
Another valuable resource is the Morgan Stanley Financially Fit program, an interactive digital program that explains key concepts—from credit scores to home ownership, charitable giving, ways to pay for college and more. Starting with grade school and progressing through high school, college and adulthood, our Financial Advisors use this program to encourage meaningful conversations between clients and their children.
1 Sources: http://finance.yahoo.com/news/parents--saving-for-retirement-is-more-important-than-kids--college-fund-202913104.html, http://time.com/money/page/parents-adult-children-financial-support/, http://foundersguide.com/us-startup-statistics/
2 Source: http://www.usagovpolicy.com/nyanalysis/tag/caring-for-elderly-parents/, March 2015
3 Source: U.S. Social Security Administration, Life Expectancy Calculator, https://www.socialsecurity.gov/planners/lifeexpectancy.html
Morgan Stanley Financially Fit is powered by EverFi, an education technology company that develops web-based learning tools focused on teaching, assessing, and certifying learners in the financial skills that life demands. The program offers four engaging, age-appropriate online learning experiences, starting in grade school and progressing through high school, college and adulthood. Learners can explore a range of topics . The information contained therein is from sources deemed to be reliable but is not guaranteed and do not necessarily reflect the views, opinions or advice of Morgan Stanley Smith Barney LLC, Morgan Stanley Bank, N.A., Morgan Stanley Private Bank, National Association, (collectively referred to as “Morgan Stanley”) or its affiliates. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data and is not responsible for the information, data contained in the program. Neither the information provided nor any opinion expressed constitutes either a recommendation by Morgan Stanley and its employees or a solicitation for the purchase or sale of any security.