Returning to the nest
Compared to previous generations, children are living with their parents much longer and many are returning to the nest for any number of reasons – most of them financial.
Check out these re-nesting numbers from the 2016 Census: 34.7 per cent of young adults aged 20 to 34 were living with at least one parent in 2016, a share that has been increasing since 2001.
63 per cent of Canadians aged 20 to 24 lived with their parents in 2016.
The good news side of those stats is that when your children live at home longer, you’re less likely to experience sadness about an empty nest — when it eventually happens.
The not-so-good-news is that supporting your children well into adulthood can drain your nest egg.
And, if you’re a member of the sandwich generation and caring for your parents, you’re probably spread fairly thin in terms of your time, finances and emotions.
If that describes your personal situation, it’s critically important to understand the entire financial picture — yours, your children’s and your parents’ — including insurance, savings, assets and debt. You should also explore all possible tax breaks and government benefit programs available to Canadians who are caring for adult dependents.
The crowded nest trend is driven, in part, by financial constraints facing today’s young adults. They may be staying in school longer to effectively compete in the job market and, with the steadily rising costs of a postsecondary education, find themselves strapped with big student loans when they graduate. Or it may simply be that housing costs are the financial roadblock to your child’s ultimate desire for independent living.
For many young adults, living with parents is a fiscally responsible decision even when they are working full time. It can be an ideal way to save for a house or start a business. But you do risk a drain on your finances. The key is proactive planning to help them (and you) cope with the costs. For example, if your at-home child is pursuing an education and if your Registered Education Savings Plan (RESP) doesn’t cover the cost of their post-secondary studies, talk to a professional about strategies that will help avoid hefty debt.
Your professional adviser can also provide sound advice to your adult children about how to leave the nest in good financial shape.
In fact, your professional adviser can help bring your entire financial picture into focus and allow you to balance all your priorities without sacrificing your own long-term financial plan.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.