Very interesting post over on grownchildren.net (what a great title, btw).  The gist of the post is the importance of having “The Chat” with your kids.  I’m squimish when it comes to discussing adolescence but for some reason, I find financial discussions to be easier.  Not so for most people.

So, it got me thinking about 3 important reasons to discuss finances with kids:

1. logistics: it happens that parents pass away without ever telling children where their assets are located.  In my job as a financial planner, I see this occur with more frequency than you’d expect.  Children spend the time post-mortem looking for and tracking down assets.  Bequeath the assets or give them away but don’t lose them.  Keep your kids in the loop.
2. ethical inheritance: use these discussions to impart your values on your children.  Let them know why you worked so hard all your life.  Explain to them how you manage the work/life conundrum.  These discussions, however awkward, mean a lot to your children, while you’re around and after.  AS Penny mentioned in the article linked to above, it’s also a great forum to explain divergence in inheritances between family members.  I remember my grandfather, OBM, showing me his mother’s will which effectively left nothing to him and all to his siblings because he had done well in business.  He understood what he mother meant by her actions and in fact, respected her for such decisions.
3. wealth transfer: how frequently we see new clients coming into money for the first time in their lives while in their late 50s and 60s.  Their parents lived to a ripe age and left money for their middle-aged children.  Frequently, as we see the baby boomers retire, this requires the children receiving inheritance to learn basic asset management skills and/or shop around for an advisor.  The sooner the children are brought into the circle of trust, the sooner and quicker they can start scaling the knowledge curve required to manage money responsibly.

Whether single or married, in today’s day and age, women need to take control of their retirement planning. Why? There are many reason but I will list a few:

• Statistically women outlive men
• While women tend to still earn less than men, they are still earning more than ever before
• Due to time out of the workforce to have children, women tend to have less money available to put into retirement plans

According to an interesting report on MoneyCentral: “Only 29% of female retirees are covered by a pension, according to the Womens Institute for a Secure Retirement (WISER), and the average payout is only $3,480 a year. Add to that today’s average Social Security payment of about $10,500 a year, and you’re living modestly at best.”

So the question is what to do? The answer, start saving and invest ASAP. It’s probably a good idea to meet with a financial advisor and create a financial plan. There you can figure out what your expenses are, and what your income is, and create a savings plan that will enable you to achieve your retirement goals. The general rule from financial advisors is that you should try and save 10% of your gross income. While that may sound impossible, the point is to save as much as possible. An advisor can also sit with you on your expenses, and together, you may be able to find ways to cut out $50-100 a month in expenses. Chances are that a few brown bag lunches and a few less trips to Starbucks, and you will be amazed at how your situation will improve.

In later posts, Bizzywomen will provide resources and other tips for learning and understanding your investments, as well as information for those of you who happen to be do-it-yourselfers.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com   or email aaron@profile-financial.com.