The financial good fortune of baby boomers is trickling down to their grandchildren.
Boomers did well in the housing market, and they’ve had the opportunity to clock some big gains in the stock market. We’ve heard a lot about how this wealth is finding its way into financial gifts for adult children, and now we have some numbers on money flowing to grandkids as well.
A little more than 70 per cent of the 2,424 grandparents who responded to a recent Carrick on Money survey said they are providing financial help to grandchildren. Just over 16 per cent said they helped because their grandkids need it, while 56 per cent said they did it because they had the money and wanted to help.
Grandparents were asked what type of financial help they provided – here are the most common responses:
– 43 per cent said they bought shoes, winter jackets and other types of clothing
– 37 per cent said they paid for holidays or trips
– 34 said they bought toys
– 32 per cent said they covered costs for activities like hockey, swimming or music
– 16 per cent said they paid for summer camp
– 15 per cent said they helped out with groceries for the family
– 13 per cent helped with child care costs
– 12 per cent said they provided money for a home downpayment
The generosity of grandparents is apparent in the number of grandchildren they’re helping. Just 17 per cent said they had one grandkid, while 28 per cent said they had two and 16 per cent said three and the rest had four or more.
A small slice of survey respondents were from the silent generation – those older than boomers. But almost 40 per cent were aged 60 to 69 and another 46 per cent were aged 70 to 79. The oldest boomers were born in 1946, which makes them 78.
Almost nine in 10 survey participants described their financial situation as comfortable or very comfortable, while 11 per cent said they had concerns but are generally fine. A bit over 0.5 per cent said their finances were shaky or worse.
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Rob’s personal finance reading list
There were signs that home sales are perking up in October, but the overall sentiment is still subdued. This is the backstory behind the willingness of some realtors to offer cashback deals to clients.
A detailed comparison of prices for grocery staples at four national grocery chains. Helpful if you’re looking for one store that can be relied upon to consistently offer competitive pricing. Now, for some good news on food inflation. Olive oil prices are coming down.
These credit cards are less rewarding
A critical take on some changes made to some Bank of Montreal reward credit cards. The rule of reward cards: Takeaways are an ever-present risk. Don’t get mad – get to work finding something better.
Just for fun, a look inside a Toronto house selling for $799,999. The average resale home price in the city was $1.1-million in October, so what accounts for the discount here? The answer is the, um, retro décor.
Podcast fans
Subscribe to Stress Test on Apple podcasts or Spotify.
Reader comment
Recently you wrote about the ‘normal’ level of TFSA investments and the use of TFSAs. I’ve used my TFSA and my wife’s as a savings vehicle with a balanced fund approach. Our TFSAs haven’t reached as high as $190,000, the normal level espoused in your recent article, but it’s because we’ve combined TFSA and cash savings to help fund our two sons’ life events. For one son, his wedding and new home purchase. And for the other, a no-interest loan to round out a car purchase (his payments to us going into our future gift to him for a home). We are each around $90,000 in our TFSAs, but I like to think we‘re using the TFSA well – by helping our kids out when they need it most without hampering our future retirement income.
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Tools and guides
Compare Canada with countries around the world for income, cost of living and purchasing power.
In the social sphere
Social Media: A profane rant in a good cause – preventing people from being scammed.
Watch: You gotta watch this one – straight talk about over-spending to live a lifestyle you can’t really afford.
Money-Free Zone: A deluxe edition of the early 70s John Cale album Paris 1919 has just been issued. If you’re not familiar with this music, you have to check it out. Cale’s an experimentalist and an early member of the Velvet Underground, but here he presents a series of melodic chamber pop gems. This is a true album, best listened to from start to finish. But as an intro, I like The Endless Plain of Fortune.
ICYMI: More PF from the Globe
– Should retirees buy dividend stocks instead of bonds?
– Bitcoin got a bump from Trump but enthusiasts should note the paradox of going mainstream
– More pets and rising costs have created a perfect storm for veterinarians’ mental health
– No boss, no pension, no problem: freelancers can still retire comfortably
