Retirement planning is too important to be left on the back burner. Conversations about money should include planning for retirement and it should begin early when children are able to appreciate and understand the value of money.

Parents need to keep the discussion going with adult children as the lure of consumerism becomes difficult to resist, especially if money habits weren’t cemented during the formative years. The early stage of a child’s life between 0-8 years is known as the formative years. It is said that children learn quicker at this stage than at any other stage of life. A study by the University of Cambridge revealed that most children develop money habits by age seven. They understand how money works and form behaviours that will influence their financial decisions for the rest of their lives. Unfortunately, some parents are not aware that their money habits are picked up by their children consciously and subconsciously. It’s therefore important that parents be deliberate in educating their children about money as early as possible, so in adulthood, they don’t repeat the financial mistakes or missteps made by parents.

If young children can grasp the money concepts early, then when they become adults planning for retirement would more than likely be a priority. The aforementioned study concluded that the concept of planning ahead is formed during childhood. Habits compound whether they are good or bad and are difficult to reverse in adulthood.

In my capacity as a financial advisor, I have met recently with a number of seniors who are living comfortably in retirement, and their focus is geared toward building generational wealth or creating financial opportunities for their children and grandchildren. Oftentimes, these children participate in financial discussions as they seek financial solutions to their own dreams or seek to grasp financial concepts. More seniors should engage grandchildren in matters concerning planning for their future and pass on the knowledge and benefits of saving and investing from an early age. Family discussions on money matters can prove meaningful for retirees and engender ongoing communication with adult children. If children see their parents or grandparents living comfortably in retirement they are likely to desire the same outcome. Once children understand the budgeting concepts, they will tend to spend less and save more.

Some seniors find it difficult to talk with their adult children about their retirement savings as they may feel ashamed that they have little or no money saved for the future, while there are others who feel that their retirement is their business and they are, therefore, not open to having discussions with family members. Studies show that both young and adult children tend to underestimate how much their parents have saved for retirement. It’s therefore recommended that seniors discuss their retirement plans with their children because failure to keep them informed can prove costly for children when the retirement years dawn and there is inadequate funding for their parents’ twilight years.

A parent’s unpreparedness eventually becomes the children’s business. I recently had discussions with a pre-retiree and his son, who is currently in university. This parent was not ashamed to say that he is behind in his retirement savings. He explained that having sacrificed for his children, it was time to make sacrifices for his future. While encouraging his son to invest, he is increasing his monthly investments to supplement his retirement income and ensuring that he maintains regular contributions to his personal pension. With less than 10 years to go to normal retirement, this parent plans to increase his pension contributions yearly as well as make lump sum deposits whenever possible. He is confident that he has done the best for his children and is aware that he must secure a nest egg to provide sufficient income for his retirement years, without depending on his children for support. His children are aware of his financial situation, as he keeps them informed of his plans.

Seniors should have retirement conversations with their children long before they get to retirement and save themselves and family much stress and headache at the eleventh hour. The earlier parents have money conversations with their children the better off they all would be in planning for retirement and budgeting for any emergency needs. Parents should openly discuss their retirement plans with their children and be honest about their financial situation. There will be exceptional cases where parents may hold back from discussing their finances with their children if they have valid reasons to mistrust them. In such situations, it becomes imperative for parents to ensure that they have a retirement plan that will sustain their lifestyle throughout retirement. Under no circumstance should parents seek to depend solely on children to be their old age pension.

Children may predecease their parents, and even with the best intentions, your children just may not be able to assist in providing consistent funding for retirement. Perhaps the best advice for parents to secure their retirement is from Albert Einstein, who said, “If you want to live a happy life, tie it to a goal, not to people or things”.

Grace G McLean is a financial advisor and pension specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com