Our parents and grandparents have, generally speaking, won at the game of life. The standard of living from when they were born to today is astounding. They are living longer than any prior generation. Their homes can be worth multiples of the purchase price. Their stocks, bonds, and retirement accounts have been on a decades long bull run. Having family around is not about control but more about time together and enduring family values and wisdom. Our parents and grandparents should be rightfully celebrated!
This month has the UN’s International Day for Older Persons, serving as a good reminder that “In a world where people are living longer than ever, the question of how to maintain financial security and quality of life in our later years has become increasingly urgent.”
Mom and Dad, Grandma and Grandpa, they need to ensure that they can continue to handle their own lives. That’s obviously paramount. And the good news is that many are set up for success (even if they are leaving the inheritance planning to too late or not at all) They have the ability to continue help the family without taking on debt (this assumes they even have the income to qualify), such as by leveraging their illiquid assets or cash.
According to the US Federal Reserve, for 65 or older homeowners, their home is ~20% of their net worth, as stocks, bonds, retirement accounts, and financial assets comprise ~45% of their net worth. The home has appreciated in value but is illiquid. The other saving mechanisms help give access to cash when and as needed, perhaps for a health scare or other major life event.
Mom and Dad, Grandma and Grandpa, they have the opportunity to Live Their Legacy, not just leave it, without impacting their daily lives. Imagine the joy of the next generation when they can purchase their first home or start a business. Many of the winners at the game of life can continue to do what they’ve done for decades: help move their families forward…