WINNIPEG, Jan. 5 /CNW/ - Members of Canada's baby boom generation regularly add caregiving and financial support to their already busy lives - sometimes at a cost that could include increased personal stress, abandoned vacation plans and reduced retirement savings.
Investors Group's Boomers on Call survey of Canadians aged 43 to 63 reveals that one-in-ten (10 per cent) boomers with children say they also provide some type of support to their aging parents as well as looking after their own needs. Of this group, four-in-ten (42 per cent) say they experience stress as a result of these combined responsibilities.
While boomers have a positive attitude about caring for their parents (66 per cent feel they're repaying their parents for their upbringing), they are not as happy about giving money to their adult children. One quarter (25 per cent) of the 'paying parents' said they were bothered by the need to provide financial assistance. The survey showed that six-in-ten boomer parents provide financial support averaging $3,675 per year to their adult children.
"Becoming a parent is a lifelong gift, but the payments are sometimes longer than anticipated. Boomers could face a cash crunch as they prepare for retirement," said Jane Olshewski, Manager, Financial Life Planning Investors Group. "It's natural to help your children as they start out on their own, but your own needs should be considered too."
According to Olshewski, today's boomers offer a variety of services to children, parents or both. The varying levels and types of support can be grouped into four broad categories:
The Venture Capitalist - Boomers who invest the initial capital to get
their children to the next stage of self-sufficiency
Four-in-ten (44 per cent) boomer parents indicate that they are currently contributing to their child's post-secondary education or have already done so. A further two-in-ten (21 per cent) expect to make this expenditure. Interestingly, six-in-ten (62 per cent) boomer parents say that their own parents did not offer this type of assistance.
The majority of boomer parents (52 per cent) say they expect their children to be financially self-sufficient by age 25, while more than half of the parents (53 per cent) say they themselves became financially self-supporting before age 21.
The Service Provider - Boomers assisting children who do not require
boarding but still need emotional and financial support.
Seven-in-ten (70 per cent) boomer parents have children aged 19 and over living away from home. These parents travel 190 km per month - on average - to provide some type of assistance to their children. This assistance includes a wide variety of chores such as babysitting grandchildren, helping with major financial decisions, doing car repairs and performing home maintenance and repairs.
The Funding Agency - Boomers providing lodging and financial relief to
adult children with insufficient funds
Two-in-ten (22 per cent) boomer parents have a child aged 19 or over living at home. Of this group, six-in-ten (58 per cent) say that their adult child makes no financial contribution to the household.
The Universal Coverage Provider: - Boomers caring for both parents and
children, placing eggs in too many baskets
Due to the time spent helping both parents and children, one-third (34 per cent) of these sandwich boomers say they've postponed or cancelled travel plans, and a third (32 per cent) say they're unable to focus on their own hobbies and interests.
However, the financial assistance this group provides could have even more significant consequences. As a result of financially supporting both their parents and their children, four-in-ten (39 per cent) say they've been forced to reduce the amount they're investing for retirement and one-quarter (24 per cent) say they have adopted a less comfortable lifestyle. One-quarter (24 per cent) expressed concern that this financial assistance will jeopardize their retirement security.
"With children taking longer to become self-sufficient, and aging parents expected to live longer, boomers are headed for the perfect generational storm," said Olshewski. "One way to cope with these responsibilities is to know how much assistance you can afford to give, and how much you need to take care of yourself."
About the Survey Methodology: A total of 500 surveys were completed with Canadian adults aged 43 to 63 from September 23 to October 3 2009. In a fashion similar to a telephone study, email addresses from the Harris/Decima panel were pulled at random. When contacted to solicit participation, participants had no prior knowledge of the subject matter of the study.
Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of approximately 4,600 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and other financial services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's premier financial services companies with over $120 billion in total assets under management.
SOURCE Investors Group Inc.
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