The Garrulous Jay – Seeking Permission

One of the most important decisions we make may throw into reverse what we have been brought up to expect. We spend much of the early part of our lives either seeking permission or approval from our parents…

As we get older we come to appreciate that there’s no substitute for experience, and rather than seeking that permission or approval, we may instead ask our parents for advice.

But when it comes to one potentially life changing question, I think we should consider turning this on its head.

I attended a conference earlier this week with the snappy title The ‘Gen-X Factor’ of Retirement Planning, which explored the attitudes and expectations of what is effectively ‘my’ generation’s approach to retirement.

It provided some fascinating insights into the way in which Gen-Xers – roughly speaking people born between 1965 and 1980 – feel about the second half of their lives. While they have high hopes for what they will be able to do post-work, this is offset by some profound fears, and in many cases a woeful lack of preparation.

For many their greatest anxiety is running out of money. This is accentuated by being the ‘sandwich generation’ that feels the burden of having to support both parents and children, sometimes simultaneously, as well as themselves.

Adding to these concerns is an implicit assumption that people should pass on a substantial part of their wealth, primarily to the next generation or maybe to the grandchildren. I think there is a subtle social stigma, bound up with judgements about greed, selfishness or failure, around those that leave no inheritance behind.

The financial advice profession encourages this with its focus on inter-generational planning and Inheritance Tax mitigation.

To be clear, leaving a legacy can bring an enormous sense of satisfaction, and taking advice on this can substantially increase the pot the gets passed on.

What struck me though, as I listened to the speakers at the conference, was that nobody asks the kids!

In other words, that life-changing question is simply: “are you expecting an inheritance?”

It’s a question which I would expect to elicit varied and nuanced answers. I would also hope it would lead to some insightful, productive and potentially liberating conversations.

My experience is that the default for many Gen-Xers is to try to spend income and preserve capital. In other words, explicitly not to spend the money they’ve spent their entire working lives accumulating, so that they can pass it on.

And my suspicion is that if they sought permission from their children to spend that capital they might receive it…with enthusiasm. With that self-imposed burden of expectation lifted Gen-X might feel a transformational sense of liberation, not just financially but also mentally.

So I’m going to ask my children the question and I would encourage others to do the same.

Perhaps I’ll be disappointed by the answer, but won’t that say as much about me as a parent as it does about my children? And better to start the conversation today than in twenty-five years’ time.