How to help your kids without draining your retirement savings

For many older Aussies, the instinct to lend a helping hand to children or grandchildren comes naturally. Whether it’s rising mortgage costs, school expenses, or just helping them get through a rough patch, saying yes feels like the right thing to do.

But what happens when that generosity chips away at your own retirement savings? After all, you’ve worked hard to build financial security — and you’ll need it to cover your own future expenses.

The good news is, there are plenty of ways to support your loved ones without breaking the bank. Here’s how to strike that delicate balance.

Know your own limits first

Before offering financial help, it’s important to check where you stand. The ASFA Retirement Standard recently revealed that couples aged around 65 now require $75,319 per year for a comfortable lifestyle, while singles need $53,289. Factor in your own costs for healthcare, everyday living, and even future aged care needs before assigning a dollar amount to helping out loved ones.

Help in specific, targeted ways

Handing over cash may feel easiest, but it’s not always the smartest option. Instead, think about helping in practical, targeted ways:

• Paying a quarterly utility bill.
• Covering school fees, uniforms, or sports costs.
• Giving grocery or petrol vouchers for essentials.

This way, you’re easing their financial pressure in meaningful ways — without losing track of where the money goes.

Lending, not gifting

Sometimes, a child or grandchild just needs a little short-term help. Offering an interest-free loan can be a safer choice than an outright gift.

The key is clarity:

• Set expectations upfront (how much, when repayment is due).
• Be clear about whether it’s truly a gift or a loan.
• Keep it light, but don’t be afraid to put the basics in writing to avoid misunderstandings.

This approach offers support while also encouraging responsibility.

Non-financial help that saves you money

Not all support has to come from your wallet. Offering your time and skills can take real pressure off your children’s finances:

• Babysitting to cut childcare costs.
• Cooking family meals to reduce takeaway spending.
• Lending tools, camping gear, or even a car for occasional use.
• Sometimes, your presence is the most valuable gift of all.

Helping your kids or grandkids financially doesn’t have to mean sacrificing your own security. By offering targeted support, setting boundaries, and making the most of what you already have, you can be generous today without worrying about tomorrow.

After all, the best gift you can give your family is not just money — it’s the peace of mind that you’ll remain financially secure for years to come.

Read more: How you can support your adult kids without spending a cent

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.