As Wealth Moves to the Next Generation, Families Face a Growing Communication Gap

As Wealth Moves to the Next Generation, Families Face a Growing Communication Gap

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Retirement planning often begins with dreams of travel and personal fulfillment. However, beneath those aspirations lies a far more consequential issue for families: how and when to talk about money. As trillions of dollars shift to the next generation, financial planning conversations are becoming more imperative - yet some families are choosing not to have them.

According to a new survey from the Nationwide Retirement Institute, 47% of investors have not had conversations with family members about how they're planning for financial security in retirement. Even more striking, 17% say they don't think these conversations are necessary.

Meanwhile, the 53% of investors who are talking with family members about retirement finances report that they span multiple topics. Conversations include wishes for end-of-life care, access to financial accounts and plans for passing on assets and managing finances when a parent becomes unable to do so, according to Nationwide's survey.

"When a parent or loved one who has been a source of guidance and stability can no longer manage their finances or care for themselves, many families find themselves thrust into a sudden and overwhelming crisis," said Juan José Pérez, senior vice president of Nationwide Strategic Customer Solutions. "It doesn't have to be that way. Family conversations can help create a shared roadmap for how a family can come together to follow through on their loved one's wishes if and when the time comes to do so."

The good news? The vast majority of financial advisors are already helping families have these conversations as part of their practice. According to Nationwide's survey, 90% of advisors say they currently facilitate conversations between aging clients and their adult children about retirement planning, healthcare costs or financial security, including 43% who say it's a standard part of their practice.

However, generations differ on how involved they want their advisor to be when it comes to family financial planning. While 60% of Millennials say they want a financial advisor to serve as a facilitator for discussions, only 32% of Gen Xers and 16% of Baby Boomers agreed, according to Nationwide's survey.

"Change can happen quickly, which is why it's essential for loved ones to have a plan in place and be ready to step in when needed - something an advisor can help coordinate," said Perez. "Older generations have an opportunity to clearly share their wishes and help their families feel prepared to support them when the time comes."

Perez shared the following topics families may want to discuss during financial planning conversations:

1. Establish expectations: Parents should articulate their vision and plan for their life when they need more help and when they pass away. Younger generations should be honest about how they may be able to contribute to these plans as a caregiver or financial partner.

2. Retirement income and expenses: Talk through where money will come from in retirement, including Social Security, pensions, savings or investments. Discuss how it will cover everyday living costs, healthcare, housing and lifestyle goals. This helps set realistic expectations before problems arise.

3. Health care and long-term care plans: Families should discuss health insurance coverage, Medicare decisions and potential long-term care needs. Chronic illness or cognitive decline can dramatically change financial needs.

4. Estate plans and beneficiary wishes: This includes wills, trusts, beneficiary designations and who will make decisions if someone becomes incapacitated. Clear conversations can prevent confusion, conflict and delays in the future.

5. Values and legacy goals: Beyond the numbers, families should talk about what matters most: supporting a surviving spouse, helping children or grandchildren, charitable giving or preserving a family legacy. These conversations help ensure financial plans reflect personal priorities.