Multi-generational financial planning is complex, and a lot of the bigger questions in life tend to arise when thinking about your legacy. Different seasons of life bring different challenges, and priorities change over time. Estate planning naturally grows more complex as children grow into adulthood and begin to raise families of their own. One subject that comes up frequently when speaking with our clients with adult children is the need for each family unit to build its own independent financial plan. Money is a common point of contention between family members, and as with many things in life, the key is communication.
Striving For Independence
Extended families tend to fare better when independence is the shared financial goal. If independence is not possible, then communication is even more important. It is common for resentment to develop between parents and their adult children when expectations are not communicated. Sometimes parents expect their adult children to take care of them; other times, the problem is the other way around. Family relationships are more fulfilling when everyone knows that everyone else’s needs are cared for, and no one feels unreasonably burdened. This is the main factor underscoring the need for adult children to put their own financial plans in place, wholly separate from the financials of their parents.
Long-Term Care And Medical Expenses
Unexpected medical expenses are a common factor that can derail retirement, and the need for caregiving can put a strain on the entire family. A 2018 report found that retirees spent an average of $122,000 on medical expenses after age 70. (1) Health problems and accidents can limit or curtail one’s ability to work at any age. It is important for each family unit to put the right mix in place at every stage of life. During the working years, income loss is especially devastating. Younger families tend to need more term life coverage and other policies that safeguard the family in the event of sudden death or disability. Later in life, long-term care and post-retirement income streams grow more important. Each separate family unit needs its own plan, and each of those separate plans will change over time.
The Big Picture Of Retirement
When you think about retirement, what do you personally find most fulfilling? When thinking about adult children, grandchildren, and possibly great-grandchildren, what does the larger picture of family life look like? What holidays or traditions are most personally meaningful to you? What relationship do you envision having with your children and other family members down the road? People often cite travel, philanthropy, and spending time with their family as the aspects of retirement they most look forward to. In the bigger picture, the financial well-being of your adult children plays as great a role in shaping your future as your own finances do, if not more.
We consider every client a part of our family. We enjoy working alongside families throughout the stages of life and seeing long-sought dreams and goals come to fruition after years or decades of hard work. If you would like to explore how our firm might work with you, give us a call at 818-841-1746 or email email@example.com to schedule a consultation.
Cameron Thornton is founder, president, and CEO at CTA Wealth Advisors, a fee-only Registered Investment Advisory firm in Burbank, California. Cameron has been a financial advisor for 39 years after a career in the United States Navy and as a manager with the Lockheed California Company. Cameron graduated from the University of Southern California with a bachelor’s degree in psychology and earned an MBA from the University of La Verne. He is also a CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner. He wrote the novel What Matters with Rod Zeeb as a result of his passion for helping people secure multi-generational wealth and unity for their families. Outside of work, Cam gives of his time, talent, and treasure to Mater Dolorosa Passionist Retreat Center, where he is Chairman of their Development Task Force. Cam and his wife, Jane, are currently parishioners at St. Bede the Venerable Church in La Canada. They have a life-long history of serving in numerous areas of parish ministry since their marriage in 1978. In his free time, Cam enjoys reading, traveling, and improving his golf game with Jane. They live in Glendale, California, and have three adult children, who also reside in Southern California. In 2019, Cam and Jane were blessed to become grandparents when two grandsons were welcomed into the Thornton family and in 2021 they were blessed with a beautiful granddaughter. Learn more about Cameron by connecting with him onLinkedIn.
- For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
- All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.