Episode Transcript
There are some really important conversations we're not having-- talks with our family about money, our health, estate planning. To find out why we're avoiding them, the Fidelity Center for Family Engagement launched The Generations Project, talking to baby boomers and their families.
The research found if boomers couldn't talk with their heirs about things like when or where they want to retire, then the more emotionally charged conversations about long-term care or dividing their estate get that much harder.
Hi, I'm Ally Donnelly, and this is Fidelity's personal finance podcast, Money Unscripted. My guest today is the founder of the Fidelity Center, Dr. Tim Habbershon. He's going to show us what he's learned so we can build the skills to help our families talk and plan together. Tim, let me bring you into the conversation. First and foremost, thank you for being here.
My pleasure, I love this topic.
Excellent. OK, Let's level-set. What is generational wealth? And is it just about money? Is it just for wealthy people?
So generational wealth is when you believe that you can share some of the wealth you've accumulated through your life, through hard work, savings, investing with your family, and it's not just about being wealthy. It's passing on a home or a family business or any amount of money you have saved or invested through time. And for us, generational wealth is really about the generational conversation. We want families to be talking about this later-in-life experience and to plan together.
OK, and you say, "later-in-life planning" as we're talking about baby boomers, right? Why not end of life?
Well, because end of life is end of life. It's a someday topic. It's about wills. It's about beneficiaries. Later-in-life is an experience I'm in right now. It's a today topic. It's the topic about a transition to retirement where I might want to live in the future, who I might want to live with. It's about my health and ultimately about the estate plan of how I'm going to pass things on. That's the later-in-life conversation.
How big is the scope of this conversation?
So there are 70 million baby boomers. I'm a baby boomer and that represents about 20% of the population. But if you take our children, which are largely millennials and Xers, that's another 42% of the population. So potentially, 60% of the population is having this later-in-life experience, and it is together. My kids are in this experience with me.
As I age, my friends and people I know, their parents are passing, and I've seen families just torn apart because they weren't having important conversations before it was too late. So tell me what you found.
So we call conversations a skill-based sport, and the reason people don't have them is because they don't have the skills. If we don't have the skills, we don't play the sport, so we just avoid it. And yet, people think they're willing to talk.
And so in the research, 98% of senior generation said they are willing to talk about these topics. But when you look at the research, only 33% are even talking to their spouses about their most relevant topic, which was legal and financial planning. And only 17% are talking to their children.
So almost all baby boomers or senior generation say, I'm good for this, but less than 20% are actually having the conversation with their kids?
Yeah, exactly. And when I looked at that, we want to be shocked. But when I looked at it, I thought, oh, that might be me too, right? Because I think I'm comfortable talking and I have the skills. And yet, when I reflect, I'm not talking as much as I should be talking to my kids either.
I'm going to give you some grace because I bet we can all recognize some of ourselves or our parents in this, but let's get to it. What was the number one topic families tend to avoid?
Yeah, maybe not unexpectedly, the least talked about topic was an unexpected health incident. And I understand that, as you might. When my mother had what was then a first stroke, five siblings rushed to the hospital. We didn't know if she had health directives. My dad wouldn't talk about it, and yet, he expected us to lead. And so we all get along. But we also all have opinions.
Sure.
And so he was looking to me in a generational way as the oldest son. But we all knew my oldest sister was the one to organize the family. So she stepped in and took over in a good way.
And no conflict there?
No conflict there because we've been deferring to my sister our whole lives, and that worked. But I think the really important point there was, we learned after that, and we had multiple strokes and two nursing home situations that we had to spend time talking about our roles, and we did. And so we were pretty clear after the first incident that we didn't want to be there again. And so we clarified how we were going to move forward in the future, and that became a real blessing for us.
It's interesting because you say, well, this might not be surprising, but I am really surprised about it because as my mom aged, that was all I thought about. I thought, oh jeez, what if something happens, and she didn't want to talk about what if. So none of us-- I'm from a big family too. None of us talked about it. And unfortunately, some things were decided for us.
Yeah, yeah, listen, it's hard. It's a very vulnerable topic, and we don't naturally step into them. And there's a family hierarchy. The parents are the parents. It is their lives, and it's hard to overcome that at times we teach a skill called Process Out Loud, and Process Out Loud is you say what you're feeling and thinking in a way that creates safety for the conversation.
So for example, you can say, mom, I'm concerned that we haven't talked about your wishes around your health. And could we just start with me understanding your health directives? Because that would make us both understand what you want. And I know it's vulnerable, and I know it's hard, but can we at least start?
Yeah.
That's what you're thinking.
Yeah, yeah.
But we don't say it. So it's a skill to actually say what we're thinking.
And an opportunity, right? Because then you're saying, I want to get to know this better so that I can honor you and your wishes and legacy.
Well, and that's the key, right? It's not-- mom, you're not talking to me. It's stepping into the relationship with care and saying, I want to do this together. And that's the sentiment of this later-in-life experience because we have to realize, later-in-life is about loss, and we just keep losing. And so that's what creates that sense of control as we age.
And my heart races just thinking about having some of these conversations. But bring me through some more. I know you've researched a bunch of topics. What else are we avoiding?
Yeah, so again, in the same genre, dependence and dependent care was the second most avoided topic. We become more dependent as we age, and then we have dependent living in some form, in our homes elsewhere. And then the third was change of control and decision-making, meaning someone writing checks for me, someone taking control of my affairs.
And so that's obvious. What was shocking in the data was these three topics-- health incident, change of control, dependence care. At age 70, they literally dropped out of the family conversation. So after 70, people become less willing to talk. And that was startling because we keep avoiding when in reality, we have to start talking about these things earlier because we become more resistant as we age.
That is so interesting.
Yeah.
All right, so you've touched on this. But A. knowing that, and B. like, should it be the baby boomer that is initiating all this conversation?
Well, when you use the word "should," the answer is yes. It's my planning, and I should involve people in that planning process. In fact, we have a relationship-guiding principle that says if I'm impacting someone with a decision, I should minimally give them voice and maybe vote. And so voice vote is one of our skills.
Give me an example.
We have to teach it, right? So if I'm having an executor of my will, that executor is impacting my family, my health proxies, my financial power of attorneys, passing on family heirlooms, wealth of any kind. We are impacting our family for generations, and they should minimally have a voice and maybe a vote in these decisions.
So for example, if I'm asked to be the executor, that is a ton of work. Do I have the bandwidth? Is that something I want to do?
Exactly, and you're making decisions that impact other family members.
Yeah, yeah.
How do they feel about your leadership? But more importantly, talking about the role of an executor. Because an executor might be responsible for decisions, but siblings can still collaborate in the process if they're aware of it.
So I get that. What did you learn on the other end of things? What did the next generation say?
When we explored through our case research and had conversations with next gen, they admitted it's really hard to step in. They didn't want to feel disrespectful. They didn't want to seem greedy. And most of all, they didn't know how to start the conversation. We need to help them, and yet, we also work with next gen to be able to help them to lean into this in a humble and relationship-based way.
Yeah, yeah.
This is a real insight for me as I have gone through this experience. We assume, and we plan, we act as if our families are always the same. The reality is families grow more different as they age. And so an important piece of wisdom is, honor the differences in your families through conversations and planning, is really, really key.
So knowing that and knowing your kids as you do and their financial situations or their home situations, what did you find was most important to them?
So when I put my dad hat and planner hat on and looked at this research because I'm a baby boomer, the thing that startled me was that the number one of 14 topics most relevant topic to the next gen was peace of mind.
What does that mean?
That means, we defined it in the research as having the information they needed to navigate life.
OK.
And so once I saw that, I thought, huh, I better ask my kids what would bring them peace of mind. And so I sent him an email, and I said, I'd like you to put in writing what would give you peace of mind. And it was touching. My one daughter said, just how we honor your legacy.
And it was also pointed, don't be a burden to us. Make sure you've planned. We want to know your professionals and the executor. We don't want to have a reading of the will where we don't know who's in the room. And the transformative one was we want to plan together, and that's counterintuitive.
They said, listen, we're in our 40s, and we're planning, and we don't know how your plans are going to impact our plans. Why wouldn't we do this to have a plan together? So my biggest piece of advice is ask your kids what would bring them peace of mind.
Yeah.
And my son reminded me why. He said, because dad, peace of mind isn't for you. It's for us. You'll be gone.
Yeah.
That's the reality.
So all right, I mean, obviously, money and all that is tied to it is emotionally fraught for so many. But what's stopping us from having these conversations?
Yeah, so one we've talked about and it's this mythology around wealth and health and later in life. We're not wealthy. We don't talk about money. We don't talk about wealth. My health is my concern. I'm in control of my life. Stay out of my business. And that takes on the power of a myth.
So we actually teach people the skill of thinking about your thinking, where you surface these mental models, these beliefs, and you explore them, and you say, how are they impacting my behavior? Because if you want to change your behavior, you have to change your beliefs.
The other resistor that is obvious is that we're human beings. These are vulnerable, hard topics, as you've experienced, and it's hard to step into these topics. And so we have to acknowledge the humanness. We have to go to the emotional level. We have to say, "mom, I'm sad. I don't know your wishes." That's a different conversation than "Mom, why don't you tell me?"
Right, right.
Different tone, different everything. And then the third one is from our research, and it was the number one reason was I don't feel prepared, but the question I ask is, how can you ever feel prepared for the unknown future?
Yeah, yeah.
And so you just have to start, and you have to-- I call it tease out and break it off. You have to break it apart into smaller parts. You have to say, yeah, we'll talk about that later. But let's talk about this one topic. And I wasn't having family conversations and meetings because I didn't feel prepared.
And it was actually my wife Alison, in a second relationship that said, we got to talk to the kids. And so I started what I called micro-meetings. And a micro meeting for me is it's a one-hour meeting on one topic, and the first one was on-- we have a house at the Jersey Shore. What do we do with that house? It's mine and Alison's home, and it's a vacation for the family.
And so I said up front, this is a voice conversation, not vote. And I also said, and I don't need you to debate your opinions. I just want to hear standalone opinions because we're not trying to make decisions. Literally, it was an amazing meeting. They talked about what they loved about it, and they liked to keep it in the family. I literally sent my notes to the attorney to create directives for the trust for the house. That's voice.
OK, wait. So OK, that's voice. What's vote? They didn't have the vote?
They didn't have a vote. It's our house, right? So we're not trying to take the vote away from senior generation. We're simply saying, give more voice. Now, there are some things they should have a vote on. If I'm going to give money to my grandchildren, my children should have the vote on that. They're not my kids, and we don't often think about that.
Oh, my nephew is having a baby. And I thought, oh, I'll be super aunt and open a 529 account, but--
It's a conversation with a mom and dad, and it's a wonderful thing because you can talk about educational values. You can talk about your own life and how you feel blessed to share. It opens up a lot of doors.
And create that opportunity to get closer, which is the point.
The whole point.
Yeah.
OK, I want to get back to skills, even though we're picking them up all the way along. Help me with some more conversation starters. It is intimidating.
It is intimidating. And again, it's a skill-based sport. So we work really hard at breaking it down. So one of the main ones that we use and put forward is wish-fear. What's interesting is-- this whole experience is filled with wishes and fears.
And so just go after it and just say, what's your wish for helping your nieces and nephews? Do you have any fears about talking to your children about wealth? What's your wish about your health care directives? So wishes and fears is one of our primary conversation starters.
Let me stay there for one second because I want to talk specifically about money. How would you do that. So I'm the baby boomer, and I have amassed whatever nest egg I have amassed, but I don't want to be in my 60s and opening up the books, so to speak. How would you guide me through that?
Yeah, so we talk about transparency moments. So you might give a gift every year, and you can talk just about that. You might talk about your intentions to keep giving every year, or you might say, I'm going to give as I can, and I don't know if I always can. So don't count on it right now, right?
What's the wish fear conversation?
Well, around the wealth?
Yeah, around money specifically since it's such an important part.
Well, I think the wish conversation can be between spouses on how they wish to help children because they're not always aligned.
Sure.
It can be their fears about giving a gift to help buy a house, because it might indicate we have more wealth than we want to talk about, which could keep us from actually giving. So there's a wish behind everything we do, literally.
All right, I'm going to come back because if one of the main objectives-- or if one of the main resistors is it's my money and it's private to me, how are you getting underneath that?
So behind all of everything we do, there's a wish and a fear. And when you feel a resistor, it's fear-based. Don't want to ruin my kids, the one we hear all the time.
Don't want to spoil them.
Don't want to spoil them. A fear always has a flip side wish. And so you feel that I don't want to ruin my kids, spoil my kids. The wish is-- so talk to me about your wish for your kids. How would you like them to experience your money today and someday?
So if my wish is, I want to make their life a little easier where I can. But I also want them to stand on their own two feet and be self-starters.
Well, you see my previous skill called Process Out Loud. You say, honey, I have this wish to share this with you a little each year, maybe help you with the house. But I also have a fear that you'll count on it or that it might demotivate you. So can we just talk about both of those things around the wealth that we might have.
Let's dig into some more skills. What else do you have here? So another skill is we call one-sided conversations because a lot of these topics are debates, my opinion, your opinion, my opinion, your opinion. One-sided conversations, when I say, OK, Ally, you just asked me questions and listen to me, and no opinions, no retorts.
And then I'm going to ask you questions, and I just want to listen to you. And using one-sided conversations, we get to deeper levels of understanding. We're not trying to get to agreement. We're just trying to get to deeper levels of understanding because a lot of times we're debating without understanding each other's views.
Holding the conch shell.
100%, right? And the skill within that is using open-ended questions. Sounds easy, but to discipline to ask what and how questions, never why.
OK.
So talk to me about what your wishes are. How would you like to help the kids? And so open-ended questions what and how gives you the most chance to answer and help me understand your views. Another skill and a really important one we call keyword questions.
And the keyword is the emotional and meaningful word in a sentence. So if you say, I'm afraid we can't afford that new house. I say, looking for the keyword, "afraid," Ally, tell me what you're afraid of.
The reason it's so important is because my normal response might be, why are you so afraid? I showed you already. We have the spreadsheet. This feels silly to me. Do you see? I just discounted the fear instead of stepping into the emotional and meaningful word. So that's a really, really important skill for people to learn.
I can't imagine, after everything we've heard, that you expect us to master these out of the gate.
Yeah, well, no, because nor have I. Listen, I'm always practicing. And so you have to be incremental. And I call it having bunny slope conversations. So it's a skiing analogy. Black diamond slopes are those difficult ones. And so I started using black diamond conversations, hard ones, complex, right? And we'll all have them.
And so we want you to go back and have bunny slope conversations. And so that largely means talking about those hard topics before they're charged Yeah and being able to talk about the health directives before you're in the hospital room with your mother unconscious and your dad distraught. And so we can practice any of these later-in-life conversations before they're difficult. And then when they are happening, we can ski the black diamond conversation.
I know you can't see into the future, right? But if you said that as the senior generation ages, by the time they hit 70, they've shut down on these conversations. Is there a magic number of when we should start these conversations? I'm talking like from the adult child perspective.
Yeah, so it's a lifetime journey to learn to talk with this level of openness. And so these topics are relevant. When our kids are going off to college, there's a transparency moment. Can you afford to pay for their college or not? And if you can afford to pay for their college, that's a wealth conversation.
If you can't, there's a loan conversation. And so you just keep building these conversations so that they don't become a point-in-time conversation where you have to overcome all these resistors. But again, I'm a baby boomer in work life choices mode, deciding when I'm going to not work.
My family's talked about that. They've expressed their wishes for me to work less, and I'm hearing those, and they are talking already about dependency and dependent care. We have talked about is there room for an elevator in our house if we need it.
And so you talk about it now, it's an architectural conversation. You talk about it later, it's a crisis. And so we just want to have these conversations as the normal course of life, as moments come up, use them to start a conversation.
But for those who may not have developed the skills and they find themselves in those moments, my best advice is, stay at the emotional relational level. You've got to express your fears, your wishes at the emotional level. Mom, I know we haven't talked about this, and I don't feel prepared. And this is going to be hard, but can we just try to stay with this conversation for a moment? Do you feel the connection?
Yeah.
As soon as you evidence the fear, which often is anger, everyone shuts down. So if you don't have the skills, at least, hold on to the emotional authenticity to connect around a hard topic.
Yeah, yeah, in the beginning, we mentioned that you have the opportunity for your family to get closer if you tackle these black diamonds and the bunny slopes. Is that measurable in any way on a larger scale in terms of success rate, so to speak?
So we have a comprehensive study on what families do and do not talk about. It was very clear that those who were talking about these topics, who were co-planning, had more confidence that their plans would be carried out seamlessly, and more importantly, they had confidence that would create closeness in their families.
And so that is the goal, and we contrast that. You can look at those who said, "I talked to my family when I decide" had significantly less confidence and closeness. That's what it's all about. At least that's my passion and my hunt is ultimately closeness. Generational wealth is about the generations being close.
Oh, this has been terrific. We've talked about so many things. So if people are going to walk away with some key points, what would you hope those to be?
Obviously, that planning is a conversation. And don't go into a room and create a plan. Talk about it with your family. And that planning is a process. It's not a one-and-done plan because life changes. It's an ongoing process of talking and planning with your family.
And then three, that planning is practice. Use it as an opportunity to practice conversations that you're going to have. And I think that practice piece is really important for us to be prepared for those harder later in life conversations. And then, as I've said, be incremental. Break it into its parts. Don't wait for one big disclosure to feel prepared.
Micro-meetings.
Those micro-meetings. Be incremental. And then, I think, in an interesting way, curb the self interest. Be humble. Be gracious. These are vulnerable topics. And lastly, if you had a later-in-life experience that was hard for you with your parents, then change that in your generation and have generational conversations that lead to different outcomes.
Tim, I could talk to you all day. Thank you so much.
Thank you.
As you build your wealth, if you want to lean into these family conversations and create an action plan, head to our website. It's Fidelity.com/MoneyUnscripted. We've got terrific tools from the Fidelity Center for Family Engagement there. We'll see you next time on Money Unscripted. It's your life. Get your money's worth.
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[DISCLOSURES]
The Fidelity Center for Family Engagement is an affiliated business unit of FMR, LLC and operates externally from Fidelity's broker dealer and registered investment adviser entities ("Affiliated Entities"). Services available through FCFE are neither brokerage nor advisory products or offerings of the Affiliated Entities.
The Fidelity Center for Family Engagement (FCFE) envisions a world where families grow closer together as they navigate their financial lives. We help families and financial professionals build capabilities for navigating generational conversations around family and wealth transitions. We offer original thought leadership, novel research, relational-digital engagement experiences,
individual and group coaching, webinars, workshops, programs, videos, articles, tools, and resources.
The Generations Project℠: Data that starts conversations is an initiative of the Fidelity Center for Family Engagement, a unit within Fidelity Investments®. The Generations Project is a service mark of FMR LLC.
Any use of or reference to the content, in any form, should cite the research study as follows:
Timothy G. Habbershon and Joshua A. Morris, Later in-Life Conversations Study, The Generations Project℠ of the Fidelity Center for Family Engagement (Boston, MA: Fidelity Investments, 2024).
Later-in-Life Conversations Study. This study was commissioned by The Generations Project℠, a research and thought leadership initiative sponsored by the Fidelity Center for Family Engagement. The study was conducted December 15, 2023, through January 9, 2024, via an online survey and in-person interviews by an independent firm not affiliated with Fidelity Investments or the Fidelity Center for Family Engagement. The study was based on a random sample of 1,539 participants consisting of 784 baby boomers (born 1946–1964) and 755 Generation Xers and millennials (born 1965–1980 and 1981–1996) who were asked about their views and experiences around later-in-life conversations.
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