- 54% sacrificing their savings
- 52% seeing significant lifestyle changes
- 33% worrying about running out of money
TORONTO, July 17,
2024 /CNW/ - Canadian grandparents are finding
themselves caught in a money squeeze, as the high cost of living is
having a big impact on both their own finances and the financial
support they're providing to two generations – their adult children
and their grandchildren.
According to the 2024 RBC Family Finances Poll –
Grandparents Edition, which surveyed grandparents aged 55
plus, 21% are currently supporting at least one adult child aged 25
plus and 30% have provided money to their grandchildren – and this
financial assistance comes at a high cost.
Among the grandparents surveyed who are currently providing
financial support to their adult child(ren) and/or have gifted
money to their grandchild(ren):
- Majority (54%) are sacrificing their own savings to provide
this assistance
- Majority (52%) have made or would need to make, significant
lifestyle changes to continue providing this assistance
- One-third (33%) are worried they will run out of money to
maintain support and cover their own costs
- Only 37% have reviewed their finances to see what they could
afford to provide today
- Only 20% have considered how their support could impact their
retirement plans
Leaning on Grandma and Grandpa for 'need to haves', not 'nice
to haves'
Poll findings indicate that many grandparents are also feeling
increasing pressure to provide financial support. Seven-in-ten
(70%) reported their adult children expect them to help cover
necessary costs – such as food and clothing – and the majority
(54%) are providing this money at least monthly. For grandchildren,
support for everyday living costs (30%) is second only to education
expenses (39%).
"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,
Financial Planning Centre of Expertise, RBC. "This can be a
financial drain that grandparents haven't included in their budget.
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."
Also of concern is the number of grandparents who admitted they
don't know how much money they have provided to their adult
children (43%) or grandchildren (34%).
"If you're covering essentials for younger family members on an
'as needed' basis, it can be challenging to keep on top of these
amounts and how they are affecting your cash flow and savings,"
explained Bannon. "Regardless of how much or how often you're
providing this support, we can help you try to find a comfortable
balance between what you want to provide and what you can afford to
spend, so you can also meet your own needs, today and in the
future."
A trio of tips to help keep finances healthy
To help grandparents keep their own finances healthy while
assisting their adult children and their grandchildren, Bannon
shares three tips.
- Have open conversations with your adult children early and
often. This will ensure expectations are clearly understood, and
existing or upcoming financial support doesn't overstrain your own
resources.
- Connect with a financial advisor who can help you build a plan
that includes how much money you expect to provide and see how that
matches your current cash flow. Once that's set up, check your plan
regularly to stay on track.
- Look beyond today, especially as you get closer to retirement.
It's important to understand how any financial support you are
providing now may affect your savings and your ability to cover
your own future costs.
Additional financial advice and resources can be found at
rbc.com/mymoneymatters
Fast Facts: 2024 RBC Family Finances Poll – Grandparents
Edition
RESPONSES
(Canadian
grandparents aged 55+)
|
Currently
providing financial
support to adult child(ren) aged
25+ and/or have gifted money to
grandchild(ren)
|
Have made, or would
need to make, significant lifestyle
changes to continue providing financial support
|
52 %
|
Have sacrificed their
own savings to provide financial support
|
54 %
|
Have taken on debt to
provide financial support
|
21 %
|
Are worried about
running out of money to cover their own
costs and provide support
|
33 %
|
Have reviewed their
finances to see what they could afford to
provide
|
37 %
|
Have considered how
their support could impact retirement
plans
|
20 %
|
Are expected to cover
necessary costs when their adult
child(ren) can't afford it
|
70 %
|
Are providing more
money due to rising costs
|
54 %
|
Are worried they will
need to increase the financial support
they provide this year
|
29 %
|
RESPONSES
(Canadian
grandparents aged 55+)
|
Are currently
providing financial
support to adult child(ren) aged
25+
|
Have provided financial
support for everyday living expenses
(e.g., food, clothing) to their adult child(ren)
|
58 %
|
Are providing money to
their adult child(ren) at least monthly
|
54 %
|
Amount of money they
are providing to their adult child(ren)
has increased over the past year
|
47 %
|
Average amount of
financial support given yearly to their adult
child(ren), among those keeping track
|
$6,945
|
Don't know how much
money they have provided yearly to
their adult child(ren)
|
43 %
|
RESPONSES
(Canadian
grandparents aged 55+)
|
Have gifted money
to
grandchild(ren)
|
Have gifted money for
everyday living expenses (e.g., food,
clothing) to their grandchild(ren)
|
30 %
|
Average total amount
gifted to their grandchild(ren) outside of
regular gifting events (e.g.,
birthdays, holidays), among
those
keeping track
|
$4,002
|
Don't know how much
money they have gifted to their
grandchild(ren)
|
34 %
|
Note: Data
excludes N/A responses.
|
Disclaimer
RBC Financial Planning is a business name used by Royal Mutual
Funds Inc. (RMFI). Financial planning services and investment
advice are provided by RMFI. RMFI, RBC Global Asset Management
Inc., Royal Bank of Canada, Royal
Trust Corporation of Canada and
The Royal Trust Company are separate corporate entities which are
affiliated. RMFI is licensed as a financial services firm in the
province of Quebec.
About the 2024 RBC Family Finances Poll –
Grandparents Edition
These are the findings of a national survey commissioned by RBC
and conducted from April 4 to 10,
2024, among 1,508 Canadian grandparents ages 55+ with adult
children ages 25+, of whom 659 are currently providing financial
support to their adult children and/or have gifted money to their
grandchildren. All respondents were members of the online Angus
Reid Forum. For comparison purposes only, a sample of this size
would yield a margin of error of +/- 2.5 percentage points at a 95%
confidence level. The poll was conducted in English and French.
About RBC
Royal Bank of Canada is a
global financial institution with a purpose-driven, principles-led
approach to delivering leading performance. Our success comes from
the 98,000+ employees who leverage their imaginations and insights
to bring our vision, values and strategy to life so we can help our
clients thrive and communities prosper. As Canada's biggest bank and one of the largest
in the world, based on market capitalization, we have a diversified
business model with a focus on innovation and providing exceptional
experiences to our more than 18 million clients in Canada, the U.S. and 27 other countries. Learn
more at rbc.com.
We are proud to support a broad range of community initiatives
through donations, community investments and employee volunteer
activities. See how at rbc.com/community-social-impact.
SOURCE RBC Royal Bank