Meaningful wealth conversations are happening sooner, a Northwestern Mutual survey finds.
Baby boomers and older Americans in a new survey said they first talked with their parents about the family’s financial situation when they were 22, Northwestern Mutual reported Tuesday.
Times have changed, and the time to talk is trending a lot sooner. Generation Z had that first family conversation at age 15, while the average American in the survey considers age 17 the right time.
In a statement, Northwestern Mutual noted that its Planning and Progress Study is exploring the topic for the first time.
“Talking about money with your family used to be taboo in society, but today, young people are changing the conversation,” Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual, said in the statement.
“Meaningful wealth discussions between generations are now happening earlier in life and more frequently,” Javeri Gokhale added. “Beyond financial planning, these conversations are also moments to reconnect with children on values, hopes, expectations and the financial acumen they need to thrive today and long into the future.”
The Harris Poll conducted the Planning and Progress Study online between Feb. 13 and March 2, surveying 2,740 U.S. adults.
The survey also found that 28% of Gen Zers consider family members the most trusted source for financial advice, followed by 22% who said financial advisors. Only 6% mentioned financial influencers/social media as a trusted advisor.
“Gen Z continues to rely on parents for sound counsel as they emerge as young adults, but they also see advisors as financial experts that they can trust for advice,” Javeri Gokhale said. “As Americans with teenage and young adult children reconnect with their financial advisors in the year ahead, I expect more Americans to add seats at the table for the next generation so the entire family can prepare for their financial future together.”
Discussions With Aging Parents
Northwestern Mutual’s study found that 29% of U.S. adults have talked to their parents or guardians about an inheritance, will provisions and other matters related to their estates. But younger generations want those conversations sooner.
Asked when people should initiate talk on those topics with their parents/guardians, boomers and older respondents said at age 55, while millennials said at age 45.
Another topic likely to come up sooner with aging parents and guardians is their preferences and options regarding long-term care. Only 43% of American adults have had that conversation already, according to the survey.
But once again, a large age gap exists between generations. Boomers and older folks say that age 53 is soon enough to discuss long-term care, and millennials insist that it should happen at age 40.
“At the end of the day, determining when to have these discussions is a personal decision that each of us needs to make for ourselves,” Javeri Gokhale said. “Younger generations are wisely choosing to talk sooner.”