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Could your adult children affect your retirement plans?

  • Tuesday, September 05, 2017
  • Sandy Dunshea

Like many Australians, you have dreamt about the carefree days of retirement, travelling the country or further afield, or just enjoying some well-deserved rest and time to do as you please.

But as the saying goes, “The best-laid plans of mice and men often go awry”...

For many retired or retiring Australians, changing demographics and financial pressures mean that their adult children are living at home for longer and/or they are increasingly involved in their grandchildren’s lives.

Financial support for your adult children

It is estimated that nearly half of adults aged 18 to 24 still live at home with their parents1. Further, more than half of adult children aged 25-29 who are living in their parents’ home have moved out and returned again. The reason for two-thirds of these children returning to their parental home is financial problems.2

Housing affordability is also attributed to adult children staying in the parental home longer. The 2016 Census results showed a decline in home ownership across all age groups, except 65+3. Saving for a deposit is one of the biggest obstacles for home owners, with a 20% deposit for an average home equating to one year of disposable income for an average household.4

Financial support for your grandchildren

It’s not just financially supporting your adult children at home that could affect your retirement plans. You may be called upon to look after your grandkids too. Statistics show that grandparents are the main providers of informal care for working parents, with over 30% of children receiving care from a grandparent.5

Grandparents involved in helping pay for the grandchildren’s education are also faced with increasing education costs. It is estimated that the average cost for a private school education in a metropolitan region is $250,396, and as much as $458,995 for some schools.6

An unexpected illness or sudden death of an adult child is not just emotionally devastating but could also have enormous impacts on your financial well-being. Concerning statistics highlight that nearly 75% of Australians – and your adult children could be among them – do not have insurance to protect themselves financially from a serious illness or disability or premature death.7

If you would like to review your retirement plans and help your adult children financially, it’s time to start a conversation with them about how they can prepare for and protect their financial future by seeking professional financial advice.

A financial adviser can help your children establish good financial habits, help to get debt under control, protect themselves against financial disaster through personal insurance, as well as help with investment and superannuation strategies.

Seeking financial advice may not be as overwhelming as your children may think and really is a positive step toward achieving financial independence. The sooner they start the better!

For more information or to set up an appointment, please contact Sandy Dunshea on (02) 6884 2222 or email admin@fortnumdubbo.com.au

1. http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4442.0Main+Features12006-07
2.http://www.mccrindle.com.au/ResearchSummaries/Generation-Y-Casuals-Downagers-Boomerang-Kids.pdf
3. http://www.abc.net.au/news/2017-07-17/home-ownership-graph/8696962
4. http://www.smh.com.au/business/the-economy/the-five-charts-that-prove-there-is-a-housing-affordability-crisis-20170414-gvla09.html
5. http://www.abs.gov.au/AUSSTATS/abs@.nsf/mediareleasesbyReleaseDate/B80CB3BDAC6944AECA257601001B62F7?OpenDocument
6. https://www.goodschools.com.au/insights/education-updates/survey-reveals-the-cost-of-an-australian-school-education
7. https://www.zurich.com.au/content/dam/au-documents/news/income-protection-gaps-challenge-and-opportunity.pdf 

Sandy Dunshea is a financial adviser with Fortnum Dubbo. Fortnum Dubbo and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306 trading as Fortnum Financial Advisers.

The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only - unless otherwise stated. Fortnum Dubbo strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances.

This publication cannot be reproduced in any form without the express written consent of the author.

Fortnum Dubbo and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306 trading as Fortnum Financial Advisers.

The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances. This website holds information for Australian Residents only.

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