Modern families are reverting back to their old ways, as the average North American lives longer and the pressure to save for retirement surmounts, suggests one Ontario advisor.
“It’s the cycle of living pay cheque to pay cheque and then you’ve got to live off your children and they’ve got to do the same thing,” explains Ottawa-based financial advisor, Mark Freedman. “Generations are living together ... parents are taking care of the grandparents. Maybe the economy is forcing us back into these circumstances again.”
Freedman’s thoughts fall in line with conclusions from a Merrill Lynch study, Family & Retirement: The Elephant in the Room, released in the U.S. last week. The study brings to light the interdependencies and challenges facing boomers (aged 47-67) who are entering – or on the cusp of – retirement, and find themselves monetarily supporting other family members, including children, parents and siblings, in financial trouble. A pay out that, overall, remains unaccounted for in their financial planning.
According to the study, which surveyed 5,400 Americans in August 2013, the average assistance provided to family members in the last five years was about $15,000 and much higher for wealthier families. This support was either a one-time sum or ongoing assistance over several years, often without any expectations for reimbursement. (continued on Page 2.)