Investments® today released the second report from its
inaugural Intra-Family Generational Finance Study, revealing the top
three money mistakes parents think their children have made and
vice-versa. The study looked at financial conversations and dynamics
within the family and indicated that adult children often put their
parents on a financial pedestal, while parents are quick to point out
their children’s debt as a key money mistake.
While the first report uncovered substantial communications gaps within
families on critical topics, the second report focuses on the
perceptions and priorities of parents and their children. Surprisingly,
parents and their children perceive each other’s financial savvy much
differently. In fact, nearly half (47 percent) of children said their
parents had not made any financial mistakes, while only one-quarter (24
percent) of adult children said their parents did not save for
retirement early enough and one-in-five (22 percent) said they saved
money in the incorrect type of account. On the other hand, parents of
adult children were quicker to point out the errors their children had
made, including racking up credit card debt (42 percent), followed by
not saving for retirement early enough (38 percent) and not building a
large enough emergency fund (36 percent).
“As families continue to face economic pressure, they can share valuable
experiences and insights to tackle key financial issues that impact
their personal economy, such as saving for retirement and managing a
household budget,” said Kathleen A. Murphy, president of Personal
Investing at Fidelity Investments.
Different Financial Priorities Being Tackled By Parents and Children
Both parents and their adult children have different views on what their
priorities should be and what financial issues they are currently trying
to tackle. The study indicated that saving for retirement is the top
issue that adult children are addressing at 86 percent, followed by
paying off the mortgage (62 percent) and saving for a child’s education
(44 percent). With many parents already in retirement, many (38 percent)
said saving for retirement and their grandchild’s education (28 percent)
were areas they are trying to tackle – while nearly a third (30 percent)
of parents said they don’t face any financial issues.
The survey clearly demonstrated that concerns about financial matters
are having a greater impact on children versus their parents. In fact,
more than half (57 percent) of adult children worry about their
financial future at least once a month or more, compared to only
one-third (32 percent) of parents who say they worry that often.
“Financial education is so important and should begin in the home at a
young age when parents and children can have conversations about basic
savings habits. Parents can really help children by sharing with them
how they are preparing for their retirement or saving for a child’s
college education,” said Murphy. Having these conversations earlier can
encourage positive savings behaviors with children and provide a better
foundation for the conversations that will occur years later as parents
transition into retirement. This is especially important in light of the
volatile market conditions witnessed by children in the last five years
and the impact it may have had on their views on saving and investing.
Resources Available to Help Families Facilitate Financial Discussions
for Planning Ahead
To help parents and their adult children develop strategies to protect
and pass on wealth between generations, increase peace of mind and help
reduce anxiety, Fidelity has thousands of trained investment
professionals to help investors make informed decisions about retirement
planning. In addition, the Personal
Economy web page on Fidelity.com has Conversation Starter tips on
how to speak openly with people who care about topics like retirement
planning, providing care for elderly parents and inheritance strategies.
Fidelity also has published a Viewpoints article called “Communications
Gap” that highlights a four step PREP plan on having conversations
About the Study
The Fidelity Personal Economy Intra-Family Finance Generational study
was conducted online among U.S. parents and their adult children by GfK
Public Affairs and Corporate Communication using GfK’s KnowledgePanel®
during the period of July 24 – August 29, 2012. To qualify, parents had
to be at least 55 years of age, have an adult child older than 30 and
have investible assets of at least $100,000. Their children qualified if
they were at least 30 years of age, had money saved in an IRA, 401(k) or
other investment account. In addition, they must have at least $10,000
For more information on the Intra-Family Generational Finance Study, an executive
summary and infographics
can be found on Fidelity.com.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of
financial services, with assets under administration of $3.9 trillion,
including managed assets of $1.7 trillion, as of December 31, 2012.
Founded in 1946, the firm is a leading provider of investment
management, retirement planning, portfolio guidance, brokerage, benefits
outsourcing and many other financial products and services to more than
20 million individuals and institutions, as well as through 5,000
financial intermediary firms. For more information about Fidelity
Investments, visit www.fidelity.com.
Fidelity Investments and Fidelity are registered service marks of FMR
Fidelity Brokerage Services LLC, Member NYSE, SIPC
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