Do you talk to your family about money?
What about your spouse?
For many years, money talk has been rather taboo, and it is understandable that you might not want to break the habits of a lifetime now.
You’re not alone
According to research from Retirement Advantage:
- Almost a third (29%) of homeowners over 55 don’t discuss their retirement finances with family
- 36% of people don’t even talk to their spouse about finances
- Only 14% involve their children in discussions about their retirement finances
Why talking is important
Firstly, shying away from conversations about your finances could leave you worse off in the long term. In 2016, 26% of couples faced relationship problems because of money worries (Source: Relate).
Discussing your options often leads to the discovery of different solutions, which may otherwise have remained unknown to you.
Second, but equally as important, is the need to plan for your retirement. If you are in a couple, talking to your partner is a vital step in planning toward a fruitful retirement.
Without talking about it, you could find that you are both working toward vastly different goals, and that your individual plans could be streamlined to form a joint strategy.
Alice Watson, Retirement Advantage’s Head of Product and Marketing, says:
“Millions of people could be limiting their retirement income options because they are not bringing family members into the conversation – including their spouses. Even when married, people can be on different paths in terms of retirement hopes and dreams, how much they think they will need to live those dreams, and how they will secure income.
“Talking retirement issues through is a fundamental first step in helping those retirement dreams become a reality. Once family members are on the same page, a key starting point is to consider the assets at their disposal. We know that one of the more emotive issues is what to do with the family home.”
The property factor
For some people, their property will be worth more than their pension. In fact, 52% of over 55s agree with this. However, the same age group will not be rushing to sell their homes to fund their retirement income. When asked how they will access their retirement income, most people will turn to their:
- Personal and workplace pensions (72%)
- State Pension (58%)
- Personal savings and investments (58%)
Before they release equity from their home.
Alice Watson continues:
“Property as an asset could see a real boost if retirement conversations become more of a family affair. For most people property is the most valuable asset they own, and worth more than they hold in pensions and savings – but there is a collective blind spot when it comes to property supporting retirement income. This blind spot allows misconceptions to take hold and retirees risk missing out as a result.”
Who should you talk to?
If you are considering opening up about your finances and asking loved ones to add their opinions and knowledge to your financial decision-making process, you should start with immediate family.
Your spouse, children and grandchildren should all be aiming for the plan which suits you best and helps you to meet your financial goals. Of course, not all families are perfect, and you may run into obstacles or difficulties that are difficult to handle alone.
Alice Watson:
“Some children can be sceptical of products which allow their parents to unlock some of the value in their home. Retirees can also be wary of undermining what they plan to leave as inheritance. This is why talking about the options available is so critical.”
That’s where financial advice comes in.
A safe place to open up
Discussing your finances and plans with an adviser is different to talking directly to those people who are emotionally invested in your future. An adviser offers five key factors to help you to make financial decisions:
Safety: A financial adviser’s office or meeting room is a place for you to open up and feel free to discuss your wildest goals and worst fears, without feeling judged or humiliated.
Confidence: Conversations you have with your financial adviser will go no further without your say-so. They will not tell your friends or family what you have said or what decisions you have made.
Knowledge: Financial advisers make it their duty to know about the most up-to-date changes and issues in the world of personal finance. That means that you can be sure that the advice you receive is in line with current best practice and considers any potential upcoming changes.
Experience: Talking to you and finding suitable solutions for the issues you are facing is something your financial adviser will have done for clients in a range of situations, so you can feel confident knowing that they have dealt with plenty of other people facing the same decisions as you.
Patience: It might take you a while to feel comfortable telling your life story to a financial planner, and that’s fine. They are not there to rush you into spilling your biggest secrets and making big financial decisions at the drop of a hat. Instead, you will find the opportunity to discuss things at your own pace and make the best decisions to meet your goals.
Watson concludes:
“Options growing in popularity, such as equity release, will not be right for everyone. But talking frankly with family and consulting professional financial advice will at least help people to properly assess the best options available to them.”
If you are ready to talk about your retirement income, please get in touch with us on 01664 77 88 99
