Boomers supporting millennials struggle to save

Sharing the financial burdens of Generation Y may be hindering boomer parents’ retirement plans

Boomers supporting millennials struggle to save
The boomer generation has a problem: their children or grandchildren are moving back into the family home or asking for financial assistance, which is impacting their ability to save for retirement.

A survey conducted by TD has found that over 62% of the boomer generation feels the “deja boom” effect of having to support their offspring financially all over again. Survey findings also showed that 58% boomers feel financial stress from the tradeoff between providing financial aid and saving for retirement. One in four Canadian boomers surveyed admitted to supporting their adult children or grandchildren.

"As a parent or grandparent it's natural to want to help our kids and grandkids who may be facing financial challenges such as finding full-time employment or paying their day-to-day expenses," said Rowena Chan, senior vice president of TD Wealth financial planning. "It's important that this desire to help is balanced with the goals you have when it comes to retirement."

Millennial offspring are not unaware of the stress this arrangement puts on their boomer elders. Nearly half of millennials (44%) who are supported by their boomer parents or grandparents know that their financial situation will lead to reduced retirement savings, and 43% of millennials admit that they’d sooner cut costs than ask for financial help when they have money problems.

"Both generations recognize this isn't an ideal situation, which means important conversations need to take place so everyone is on the same financial page," Chan said. "Sitting down with someone who understands different family dynamics is a great first step to set defined goals and establish a financial action plan to best serve both generations."

To help families that face these issues, TD suggested that boomers can coordinate their financial goals with their kids’ to achieve a common overall objective. They also recommended splitting everyday costs and responsibilities, meeting with financial planners who have experience managing multi-generation family dynamics, and deciding on a specific date when both parties will no longer be financially committed to one another.

Related stories:
The growing role of advisors in an aging Canada
What millennials want from their advisors