Nearly one in three Canadian grandparents providing financial support to younger generations are possibly risking their own retirement, new polling released Wednesday by Royal Bank of Canada suggests.
The “grandparents edition” of RBC’s 2024 Family Finances Poll shows that 21 per cent of those surveyed are supporting at least one adult child financially, while 30 per cent have provided money to their grandkids.
The survey is based on online polling data from April 4 to 10 among 1,508 members of the Angus Reid Forum aged 55 and older. For comparison, a similar sample size would have a margin of error of +/- 2.5 percentage points at a 95 per cent confidence level, the report said.
Among those providing support to their kids and their kids’ kids, a majority of respondents (54 per cent) said they are sacrificing their own savings to provide assistance. Some 52 per cent said they have made or would need to make “significant lifestyle changes” to keep up their support.
Some 33 per cent said they’re worried they’ll run out of money themselves trying to cover the costs of their family.
The RBC report said that only one in five respondents have considered how their financial support would impact their own retirement plans.
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In terms of what older Canadians are covering, 70 per cent said their adult children are asking for help with necessary costs like food and clothing. More than half (54 per cent) are providing that money on a monthly basis.
For grandchildren, support is primarily for education expenses (39 per cent) followed by everyday living costs (30 per cent).
“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,” Craig Bannon, director of RBC’s Financial Planning Centre of Expertise, said in a statement.
Bannon went on to say grandparents might not be anticipating this “financial drain” as they get closer to retirement.
“And for those who are already retired and living on a fixed income, these added expenses can pose an immediate risk,” he said.
According to the poll, some 43 per cent of grandparents said they don’t know how much money they have provided to their adult children, with 34 per cent saying the same for grandchildren.
Beyond daily essentials, younger generations are increasingly turning to parents and grandparents for help breaking into the housing market.
A report from CIBC last month showed that 31 per cent of first-time homebuyers have received financial gifts from family so far in 2024, up from 20 per cent in 2015. On average, the typical buyer is getting $115,000 from family, a 73 per cent increase above 2019 levels.
Ipsos polling conducted exclusively for Motorcycle accident toronto today in June showed that 78 per cent of non-owners now feel owning a home is only for the rich, a figure that’s down two percentage points from April.
Are you supporting your child or grandchild financially? Is it causing stress in your finances? We’d love to hear how you’re coping with these challenges and may reach out for a future story.
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