Canadian grandparents are being looked upon to help financially support adult children and grandchildren, according to an RBC survey.
Much of this financial support is helping families cover the cost of necessities such as food and clothing. Seventy percent of those surveyed said their adult children expected them to help with necessary costs.
“While it’s not unusual for grandparents to provide financial assistance to younger generations, the dramatic difference today is this support has become a necessity, rather than simply a desire to help,” said Craig Bannon, director of RBC’s Financial Planning Centre of Expertise.
Over half of respondents (54 percent) said they were giving their adult children money every month.
RBC said when grandparents step in to support adult children, it hinders their own ability to save and plan for retirement.
Over half of those surveyed (54 percent) said they were digging into their own savings to help their children and grandchildren. Thirty-three percent said they worry they will run out of money to cover their own costs and support their families.
Mr. Bannon said it’s important for grandparents to budget for the financial support they are providing to their adult children.
“The closer they get to retirement, the bigger the impact unplanned costs such as these can have on their retirement savings. And for those who are already retired and living on a fixed income, these added expenses can pose an immediate risk.”
The survey found that 37 percent who are supporting adult children or grandchildren have reviewed their finances to see what they can afford. However, just one-fifth have thought about the impact supporting their children can have on their retirement plans.
