Talk About Money With Your Family

528069240Several months ago I hit a hot button with Strumings readers with a blog post called Talk to Your Family About Finances. Looks like the topic is one people are very interested in given its readership. Of the roughly 500 Strumings, it is 3rd in all-time readership and continues to climb and I suspect will soon become the #1 post in readership in the near future. Therefore I thought it might be helpful to summarize some of the key concepts once again.

Finances are a sensitive family topic and I suspect most people are either reluctant to approach or want to avoid altogether. Not doing so can create big problems, ones out of your control when you are gone. But even during your lifetime, it’s always best to have your family know about your financial condition and also have an action plan if something happens to you unexpectedly.

1. Have a will.

This is critically important. It is a directive of how your assets should be shared with others after you are gone. It forces you to make decisions—that’s good. But a will is insufficient if you have investments that are not titled properly. Have an IRA and/or 401K? That’s good. Who are the beneficiaries? When you first opened the account your spouse was the recipient. But what if you are now remarried. If your beneficiaries are not updated, your former spouse will be getting this asset. It doesn’t matter what your will says! Change the beneficiaries, please.

2. Plan for the future

If you are near retirement, develop a plan for how long the money lasts. Your #1 goal should be to put yourself in a place where you won’t depend on family financially. But you need to make assumptions:

–where will you live and how much it costs

–amount of social security, if any (given that the average recipient only receives roughly $16,000 annually, this will not be enough to live on)

–overall costs of living

–health care. This is a biggee. Don’t underestimate your needs. Think you’ll be able to spend down your assets and Medicaid will help you out if you need to go into a home someday? Think again.

–how long you’ll live. Who knows, you say. True, but plan based on a longer life. The average 65 year old has a 20 year life expectancy and ¼ of them live into their 90s.

–Build inflation into every assumption. I know inflation has been low for the past few years, but assuming 3% annual inflation is a good assumption.

3. Communicate your plan to your family

Write the key information down. Accounts, phone #s. Passwords. The whole magilla. If you are married, obviously be sure your spouse has all the key info (and you have theirs). But if your children are adults (20s or older) then loop them in too. Don’t hide info from them. And if you are the sole parent, this is critical.

Always revisit where you are financially and be sure to live mindfully about setting the stage for tomorrow. No one knows what the future holds, so planning for some contingencies is a mitzah. You and your family will be the beneficiary.

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  1. Rich Riley says:


    Absolutely great advice. Thanks.


  2. Lynn Hoban says:

    Great advice and this is particularly critical for our own parents. Especially if one parent has passed and the other is now living alone. Have the tough conversation, get your name added to the bank accounts and find out where everything is now. I did this with my mom and she was surprisingly willing to participate.

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