Nick shared an article with me this morning which highlighted some interesting challenges for Baby Boomers.
The article contained a summary of a survey by Fidelity Investments which looked at the mixed savings habits of 20- and 30-somethings, a generation commonly known as millennials.
Why does this matter for the Baby Boomer generation (those born between 1946 and 1964) and what challenges does it create?
Find out more about our feature-length documentary about Baby Boomers in retirement
Well, the survey also found that 60% of respondents view their parents as good financial role models.
This is a particularly high vote of confidence because millennials typically don’t trust others when it comes to financial advice.
In fact, 23% of millennials claim to trust no one when it comes to their finances.
14% trust their parents when it comes to money matters,11% trust their mother specifically and 8% trust their father specifically – a total of 33% of millennials trusting their parents or a parent most on money matters.
Just 13% trust a financial professional most on personal finances.
This vote of confidence in the financial skills of parents, and the relative lack of trust in financial professionals to deliver financial advice, poses challenges for Baby Boomer parents as they consider the transfer of wealth across generations.
We are increasingly seeing parents in the Baby Boomer generation wanting to transfer wealth to children and grandchildren during lifetimes, rather than waiting until death for this ‘inheritance’ to cascade down the generations.
Gifting during life or using wealth to get adult children onto the property ladder can be a very efficient form of estate planning and also very satisfying for parents.
It does however need to be managed very carefully to ensure wealth is not squandered.
If millennials are generally reluctant to seek professional financial advice when needed, parents will need their own plans and advice to keep family wealth secure and transfer it to the next generation in the most efficient way.
Find out more about our feature-length documentary about Baby Boomers in retirement
