It’s time to face the reality of retirement

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It’s time for families to get serious about the coming retirement and wealth transfer flood by starting simply: Have the conversation.

People are “too busy focusing on the present,” Domain Money CEO Adam Dell told Yahoo Finance Editor-in-Chief Brian Sozzi on Yahoo Finance’s Opening Bid podcast (video above; listen below). “It’s easy to forget that the future is coming, and you better be prepared.”

Figuring out how to live after retirement may not be the easiest task in the daily grind, but many baby boomers will soon be confronted with the reality. According to the Census Bureau, one in five Americans is expected to reach retirement age by 2030.

This age group is the first to reach this milestone without cushions such as full Social Security benefits and defined benefit pensions. Add to that the lack of savings—of the 30.4 million Americans who will turn 65 between 2024 and 2030, more than half have assets of less than $250,000—and the need to take retirement seriously , becomes clear.

“People don’t talk about money enough,” Dell said. “Within a family, people need to learn to talk about the dynamics of your parents’ financial situation and their long-term well-being, as well as the impact this will have on your life after they die.”

The looming $84 trillion wealth transfer from baby boomers to their offspring is also something families will need to discuss sooner rather than later.

To avoid potential mistakes and confusion, Dell recommends being open about your financial situation. Taking steps now, such as disclosing whether there is a will, who the executor is, and where assets are kept, can help in the long run.

Another possible “big mistake” is the tax implications.

“Understanding what taxes will apply to the estate and how that will impact the estate at the end of tax liability” should be part of the conversation, Dell said.

More retirees are choosing to spend more of their money on themselves, and family members need to be transparent with each other “so that there is agreement about what the expectations are and what is reasonable and realistic to achieve.”

Dell, whose older brother Michael founded Dell Technologies (DELL), sees Domain Money’s mission as providing everyday consumers with access to high-quality information, which is critical when planning for transitions such as retirement.

“You need a realistic plan and small, incremental steps to achieve that plan,” he said. “Having this conversation sooner rather than later, particularly as they get older and their cognitive abilities decline, is a much better approach.”

The story continues

For more retirement tips, check out Yahoo Finance’s Decoding Retirement podcast, hosted by Robert Powell.

Three Times a Week, Editor-in-Chief of Yahoo Finance Brian Sozzi offers insightful conversations and chats with the biggest names in business and markets Opening bid. You can find more episodes on our Video Hub or look at yours preferred streaming service.

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