Connect with us

Finance

Americans moving past taboos about family financial planning, study finds

Published

on

Americans have historically been averse to discussing financial matters among family members, but a recent study by Fidelity Investments found that attitudes toward taboo wealth topics are shifting.

Fidelity’s State of Wealth Mobility study found that 56% of Americans didn’t discuss family finances with their parents when they were children. Of that group, 82% wish that they had, because they think it would’ve been beneficial to have received a financial education at an earlier age.

It also found that Americans’ attitudes to those talks are changing, with 83% of respondents saying that it’s important to talk about money management with children, and 67% of parents already talking to their children about family finances.

“Money and wealth is one of the topics that, notoriously, we just don’t like to talk about historically,” David Peterson, head of advanced wealth solutions at Fidelity Investments, told FOX Business. “Wealth is like a deeply personal experience, so in some respects, it’s not surprising that people have historically been uncomfortable talking about it.”

WHAT NET WORTH DOES ONE NEED TO BE RICH IN 2024? HERE’S WHAT AMERICANS THINK

couple who are retiring

Americans’ attitudes toward once-taboo financial conversations are easing, Fidelity’s study found. (iStock / iStock)

“The study indicated that people are starting to sort of break that cycle of avoiding the family discussions. And so clearly, if we relate that then to the intergenerational wealth transfer, that is sort of a generational difference, and what we found is that older people generally – they’re just not as comfortable talking about it,” Peterson said. 

Peterson said that many Americans have experienced the complications that can arise when a parent who hasn’t been as open about their finances begins to decline, and family members have to step in to help take care of their finances.

“When people start reaching end of life, and they suddenly can’t manage their own finances or they no longer have the capacity to make decisions around it, this is where you start to see things kind of go sideways a little bit, because they haven’t shared with their families what their wealth is, where the wealth is, what it’s made of,” he said. “And you can find yourself very quickly in a situation where, during a really emotional time of life, people are now worried about, well, how do we actually manage mom and dad’s finances when they can no longer do it themselves?”

MYSTERIOUS $7B ESTATE TAX PAYMENT SPURS QUESTIONS ABOUT SOURCE OF FUNDS

Elderly Couple Social Security

Peterson suggested that families approach financial conversations as a process, rather than trying to take care of it all at once. (iStock)

He said that it’s important for families to have documents including a health care proxy or health care power of attorney to help navigate the health care system, as well as a living will with instructions about the individual’s hopes around that. A financial power of attorney that entrusts someone to act on their behalf on financial matters is another key document.

Families should also consider other documents and designations needed for end-of-life, Peterson said. Brokerage accounts that can be jointly titled with rights of survivorship can be transferred very easily to the surviving owner, while beneficiary designations can also be included to transfer accounts on death to the beneficiary. 

“You need a will, which is going to account for all the things that don’t really have a title to it or a beneficiary designation on it,” he added. “And then, in some cases, it might be beneficial to have a trust and put assets in that trust so that they can pass, similarly to an account with a beneficiary designation. The trust will then define who gets all those assets that are in the trust.”

BUFFETT TALKS MORTALITY AND PHILANTHROPY IN SURPRISE SHAREHOLDER LETTER

family making a toast

Fidelity’s study found that people with financial plans have more confidence about building and protecting their wealth. (iStock / iStock)

Peterson suggested that to get the ball rolling it can be helpful to do so with the understanding that it’s not likely to be a one-off conversation and more of a process to ease some of the pressure and emotions surrounding those talks.

“I think for some people, having a very strict itinerary of what you’re going to talk about works very well; in other cases it doesn’t, and my recommendation is not going into the conversation thinking that it’s going to be a one-and-done kind of conversation. These are hard conversations to have,” Peterson said. “Look, I’m in the business, and I remember having the conversation with my dad, who’s now passed, and you would think it’d be easy for me, but it’s not, because these things are wrapped up in all sorts of emotions.”

Sharing some details about financial accounts and points of contact can also be a good first step, even if it doesn’t necessarily lead to full disclosures about the specifics of an older person’s wealth, he explained.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“Given particularly older generations aren’t as willing to reveal necessarily all the specifics of their wealth, what I often recommend is that you at least share what it is, not necessarily the amount, but where it is; who are the key people to contact in the event that a family member has to know more about it. And keep all these things in a place that’s easy for people to find,” Peterson said. 

“Probably the first step is just doing a really robust inventory of what’s there, a balance sheet, a wealth statement, a net worth statement, whatever you want to call it – but just this list of things so that when someone has to act on it, they at least know where to go,” he explained. “And that way, you sort of protect this sensitivity around how much is in all of these different accounts or banks or financial institutions.”

Regardless of the process individual families use to build their financial plans, Fidelity’s study found that having a plan is a confidence booster. While about four in 10 Americans are worried about losing their wealth, 78% with a financial plan said they’re confident they’ve taken the right steps to build and protect their wealth, compared to 26% and 27%, respectively, of those without plans.

Continue Reading

Finance

Tariffs may raise much less than White House projects, economists say

Published

on

President Donald Trump speaks before signing executive orders in the Oval Office on March 6, 2025.

Alex Wong | Getty Images

President Donald Trump says that tariffs will make the U.S. “rich.” But those riches will likely be far less than the White House expects, economists said.

The ultimate sum could have big ramifications for the U.S. economy, the nation’s debt and legislative negotiations over a tax-cut package, economists said.

White House trade adviser Peter Navarro on Sunday estimated tariffs would raise about $600 billion a year and $6 trillion over a decade. Auto tariffs would add another $100 billion a year, he said on “Fox News Sunday.”

Navarro made the projection as the U.S. plans to announce more tariffs against U.S. trading partners on Wednesday.

Economists expect the Trump administration’s tariff policy would generate a much lower amount of revenue than Navarro claims. Some project the total revenue would be less than half.

Roughly $600 billion to $700 billion a year “is not even in the realm of possibility,” said Mark Zandi, chief economist at Moody’s. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”

The White House declined to respond to a request for comment from CNBC about tariff revenue.

The ‘mental math’ behind tariff revenue

There are big question marks over the scope of the tariffs, including details like amount, duration, and products and countries affected — all of which have a significant bearing on the revenue total.

The White House is considering a 20% tariff on most imports, The Washington Post reported on Tuesday. President Trump floated this idea on the campaign trail. The Trump administration may ultimately opt for a different policy, like country-by-country tariffs based on each nation’s respective trade and non-trade barriers.

But a 20% tariff rate seems to align with Navarro’s revenue projections, economists said.

The U.S. imported about $3.3 trillion of goods in 2024. Applying a 20% tariff rate to all these imports would yield about $660 billion of annual revenue.

“That is almost certainly the mental math Peter Navarro is doing — and that mental math skips some crucial steps,” said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist at the White House Council of Economic Advisers during the Biden administration.

Trade advisor to U.S. President Donald Trump Peter Navarro speaks to press outside of the White House on March 12, 2025 in Washington, DC. 

Kayla Bartkowski | Getty Images

That’s because an accurate revenue estimate must account for the many economic impacts of tariffs in the U.S. and around the world, economists said. Those effects combine to reduce revenue, they said.

A 20% broad tariff would raise about $250 billion a year (or $2.5 trillion over a decade) when taking those effects into account, according to Tedeschi, citing a Yale Budget Lab analysis published Monday.  

There are ways to raise larger sums — but they would involve higher tariff rates, economists said. For example, a 50% across-the-board tariff would raise about $780 billion per year, according to economists at the Peterson Institute for International Economics.

Even that is an optimistic assessment: It doesn’t account for lower U.S. economic growth due to retaliation or the negative growth effects from the tariffs themselves, they wrote.

Why revenue would be lower than expected

Tariffs generally raise prices for consumers. A 20% broad tariff would cost the average consumer $3,400 to $4,200 a year, according to the Yale Budget Lab.

Consumers would naturally buy fewer imported goods if they cost more, economists said. Lower demand means fewer imports and less tariff revenue from those imports, they said.

Tariffs are also expected to trigger “reduced economic activity,” said Robert McClelland, senior fellow at the Urban-Brookings Tax Policy Center.

More from Personal Finance:
Economists say ‘value-added taxes’ aren’t a trade barrier
Tariffs are ‘lose-lose’ for U.S. jobs and industry
Why uncertainty makes the stock market go haywire

For example, U.S. companies that don’t pass tariff costs on to consumers via higher prices would likely see profits suffer (and their income taxes fall), economists said. Consumers might pull back on spending, further denting company profits and tax revenues, economists said. Companies that take a financial hit might lay off workers, they said.

Foreign nations are also expected to retaliate with their own tariffs on U.S. products, which would hurt companies that export products abroad. Other nations may experience an economic downturn, further reducing demand for U.S. products.

Tariffs could be a major rewiring of the domestic and global economy, says Mohamed El-Erian

“If you get a 20% tariff rate, you’re going to get a rip-roaring recession, and that will undermine your fiscal situation,” Zandi said.

There’s also likely to be a certain level of non-compliance with tariff policy, and carve-outs for certain countries, industries or products, economists said. For instance, when the White House levied tariffs on China in February, it indefinitely exempted “de minimis” imports valued at $800 or less.

The Trump administration might also funnel some tariff revenue to paying certain parties aggrieved by a trade war, economists said.

President Trump did that in his first term: The government sent $61 billion in “relief” payments to American farmers who faced retaliatory tariffs, which was nearly all (92%) of the tariff revenue on Chinese goods from 2018 to 2020, according to the Council on Foreign Relations.

The tariffs will also likely have a short life span, diluting their potential revenue impact, economists said. They’re being issued by executive order and could be undone easily, whether by President Trump or a future president, they said.

“There’s zero probability these tariffs will last for 10 years,” Zandi said. “If they last until next year I’d be very surprised.”

Why this matters

The Trump administration has signaled that tariffs “will be one of the top-tier ways they’ll try to offset the cost” of passing a package of tax cuts, Tedeschi said.

Extending a 2017 tax cut law signed by President Trump would cost $4.5 trillion over a decade, according to the Tax Foundation. Trump has also called for other tax breaks like no taxes on tips, overtime pay or Social Security benefits, and a tax deduction for auto loan interest for American made cars.

If tariffs don’t cover the full cost of such a package, then Republican lawmakers would have to find cuts elsewhere or increase the nation’s debt, economists said.

Continue Reading

Finance

Investors hope April 2 could bring some tariff clarity and relief. That may not happen

Published

on

Continue Reading

Finance

Cliff Asness’s AQR multi-strategy hedge fund returns 9% in the first quarter during tough conditions

Published

on

Cliff Asness.

Chris Goodney | Bloomberg | Getty Images

AQR Capital Management’s multistrategy hedge fund beat the market with a 9% rally in the first quarter as Wall Street grappled with extreme volatility amid President Donald Trump’s uncertain tariff policy.

The Apex strategy from Cliff Asness’ firm, which combines stocks, macro and arbitrage trades and has $3 billion in assets under management, gained 3.4% in March, boosting its first-quarter performance, according to a person familiar with AQR’s returns who asked to be anonymous as the information is private.

AQR’s Delphi Long-Short Equity Strategy gained 9.7% in the first quarter, while its alternative trend-following offering Helix returned 3%, the person said.

AQR, whose assets under management reached $128 billion at the end of March, declined to comment.

The stock market just wrapped up a tumultuous quarter as Trump’s aggressive tariffs raised concerns about an severe economic slowdown and a re-acceleration of inflation. The S&P 500 dipped into correction territory in March after hitting a record in February.

For the quarter, the equity benchmark was down 4.6%, snapping a five-quarter win streak. The tech-heavy Nasdaq Composite lost 10.4% in the quarter, which would mark its biggest quarterly pullback since a 22.4% plunge in the second quarter of 2022.

Continue Reading

Trending