Why baby boomers are closing the door on the bank of mum and dad

As parents, it’s only natural to want to support our adult children in their journey through life, however, recent research indicates a growing trend among baby boomers: more of them are opting to shut down the bank of mum and dad.

According to the latest research from AMP, baby boomers are well aware that younger Australians are struggling financially and while they want to help where they can, they are not willing to do so at the expense of their retirement lifestyle.

Among those aged over 65 in Australia, seven in ten surveyed said they were reluctant to compromise their retirement lifestyle to help their adult kids out financially.

“There’s a widely held perception that older people think younger people have it better than they did. You know, ‘kids these days’,” AMP’s Director of Retirement Ben Hillier said.

“But you have this bipolar situation where while they do believe they’re struggling and they do want to help them, they’re not comfortable to do so at the expense of their own lifestyles.”

About half of the older Australians surveyed said they would be happy to help out their children if it meant they could remain in the family home.

As older adults increasingly prioritise a comfortable and secure retirement over financial support for their children, there remain several alternative ways to offer assistance without reaching into the bank account.

Consider these alternatives for supporting your adult children:

Let them use your car

Cars can be incredibly expensive with registration, insurance and licence fees to consider, not to mention petrol costs, which can increase at any point. If you live in the same city or town as your adult kids then lending them the car when they need it most could be a huge help.

Instead of leaving your car sitting in the street, with expenses piling up, you can simply hand over the keys if you’re jetting off on holiday or have no need to use it for a few days. To ensure the kids aren’t racking up the kilometres and leaving you out of pocket though, a deal could be arranged so they have a set dollar amount per month or per km to use. Or alternatively, you could simply ask them to refill the tank after each use of the vehicle.

Babysit

Time with your grandkids is always valuable and looking after the little ones can help save your children a bucket load, especially with the increasing costs of childcare. There are bonuses on both sides with the kids’ well-earned cash going straight into the savings, while you get the enjoyment of hanging out with the grandchildren and building relationships. Not only that, there is generally trust between you and your grandkids built already, making babysitting duties that much easier.

Open up your home

While for most Baby Boomers the thought of living at home with their parents into their 20s and 30s was very much frowned upon with teens quick to set up their own homes with friends or a partner back in the day, things have taken a drastic turn since then. Inviting your kids back under the same roof may seem like an odd idea but nowadays it is perfectly normal with data revealing that young adults are choosing to live with their parents for longer than ever.

If you’re willing and ready to share the space again, this could be an excellent plan to help your kids save money, even if it’s just for six months or so to help them avoid rising rent costs and build up their savings.

Add them to your health insurance

In some instances, adult kids can fall under their parents’ health insurance up until the age of 31, under certain circumstances. For mum and dad, it usually doesn’t cost much extra to include them on their policy and it saves children forking out $150 or so a month that could be going towards a house deposit.

Although this assistance isn’t as long-lasting as other options, it will still help the kids with their finances, and it’s a win-win situation really with parents having the peace of mind that the children are protected.

-with AAP.