Posthaste: Canadian grandparents risking their own financial future to support family

Article content

Many Canadian grandparents are risking their own financial future to support their adult children and grandchildren, according to a new study by the Royal Bank of Canada.

The 2024 RBC Family Family Finances Poll — Grandparents Edition, which surveyed 1,508 Canadian grandparents (aged 55 and above) with adult children (aged 25 and above), said 21 per cent of them are currently supporting at least one adult child and 30 per cent have provided money to their grandchildren.

Article content

More than half of them are sacrificing their own savings to provide this assistance, and 52 per cent have made or would need to make significant lifestyle changes to continue doing so. One-third even fear they will run out of money if they have to keep up the support and cover their own costs.

Also of concern is that only 37 per cent have reviewed their finances to see what they could currently afford to provide, and just 20 per cent have considered how it could impact their retirement plans.

“The closer they get to retirement, the bigger the impact unplanned costs such as these can have on their retirement savings,” Craig Bannon, director of RBC’s financial planning centre of expertise, said in a press release. “And for those who are already retired and living on a fixed income, these added expenses can pose an immediate risk.”

Most grandparents seem to be providing financial support out of necessity, with 70 per cent of them saying that their adult children expect them to help cover necessary costs such as food and clothing. Support for everyday living costs is also the top gift for grandchildren (30 per cent), second only to education expenses (39 per cent).

Article content

Article content

“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,” Bannon said. “This can be a financial drain that grandparents haven’t included in their budget.”

The survey said 54 per cent of grandparents are providing this money at least monthly, but 43 per cent don’t know how much they’ve given their adult children and 34 per cent don’t know what they’ve given their grandchildren.

“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,” Bannon said.

He recommends grandparents have open conversations with their adult children early and often to set clear expectations and to look beyond today to understand how the financial support they provide may affect their own future.

 Sign up here to get Posthaste delivered straight to your inbox.

Canada continues to grapple with meeting its housing construction targets. Until recently, a shortage of skilled trades was seen as the primary obstacle to housing construction growth. However, recent data reveals a troubling trend: while the number of construction labourers has reached an all-time high, construction activity has not followed suit, resulting in a significant drop in productivity. The discrepancy between workforce growth and construction output is yet another challenge for a country struggling to reach its housing goals, write Murtaza Haider and Stephen Moranis. Read more.

Article content

• G20 finance ministers and central bank governors meet in Rio de Janeiro
• Today’s Data: Ottawa’s fiscal monitor for April and May, U.S. income and consumption for June, University of Michigan consumer sentiment index for July
• Earnings: Canfor Corp.

We all know school is out for the summer, but that doesn’t mean you can’t still learn something. After all, those nerds going to summer school often get ahead of the crowd. So, let’s dig into some investment lessons, or rules, that are good to follow in the stock market. They are not perfect, but they have worked well over the past 40 years. Peter Hodson outlines five of them.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line with your contact info and the gist of your problem and we’ll try to find some experts to help you out, while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers, led by Julie Cazzin, can give it a shot.

Article content

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Today’s Posthaste was written by Noella Ovid, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at [email protected].

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Article content