Ninety-six per cent of parents with adult children between the ages of 18 to 35 report they have financially supported their children in some capacity into adulthood, found the 2019 RBC Family Finances Poll. Almost half are financially assisting their children aged 30 to 35.
Eighty-eight per cent of these parents say they are happy to be able to provide this support, however, one-third admitted that they worry about the impact on their retirement savings. Another third fear it may prolong their retirement plans entirely, the poll found.
Have a frank conversation
"It's human nature for parents to put their children first, but when it comes to balancing financial needs, the best advice is to pause and take a look at your whole financial picture," suggested Rick Lowes, vice-president, Retirement Segment, RBC. "Take the time to have a frank conversation with your adult children about finances, plans and expectations. If you can openly discuss your retirement goals alongside their financial needs, it will be much better for everyone in the long run."
Eighty-five per cent of parents believe their children are trying to become financially independent. But, these parents find that it is very difficult for young adults to make ends meet in today's world.
On average, Canadians who still support their 18- to 35-year-old children estimate they are spending $5,623 per year to provide this support. While these payments tend to decrease over time, the parents who are still supporting children between the ages of 30 and 35 estimate they are spending an average of $3,729 annually on financial support.
As examples, parents report funding the following in some capacity since their children reached the legal age of majority: education costs (69%); living expenses, including mortgages, rent and cable (65%); cell phone bills (58%).
"The closer you get to retirement, the bigger the impact additional costs can have on your retirement income," says Lowes. He suggests reaching out for financial advice to get a plan in place.