Sandwiched boomers must work longer

Caught in the financial crunch of caring for children and parents, many baby boomers could be struggling to find a balance between dreams and duty when they retire.

The challenges associated with caring for family, whether its parents or children, or both, don’t appear to diminish with age, according to the recent TD Waterhouse Canadians and Retirement Report.

“Caring for family can be a major constraint on both your time and finances,” said Reg Swamy, vice-president, private trust, TD Waterhouse. “It’s important to plan ahead and consider different contingencies, including care-giving or financial support for parents and children.”

While most Canadians expect to work hard to achieve their retirement dreams, many are oblivious to the possibility that they may be spending their golden years caring for their parents, children or both.

Forty-one per cent of retired Canadians aged 55-70 still have at least one living parent, and 30% find it challenging to balance the needs of their own families with that of their parents or in-laws. Twenty-two per cent are financially supporting their children while 14% are supporting their parents, either financially (7%), or their parents are living with them (7%).

The study noted that the majority (77%) of retired Canadians plan on leaving an inheritance for their children, family members or others after they’re gone.

Swamy suggests a comprehensive estate plan and an official, updated will are essential to head off inheritance issues.

“Estate planning often involves more than most people consider,” said Swamy. “All assets, income and liabilities of the estate must be taken into account, including how you would like your assets to be distributed, and the tax implications of your estate. If you want to leave assets for your grandchildren, you may need to set up a trust.”

Overwhelming complexities of managing finances of two generations can considerably hamper desired lifestyle in retirement.

“Working with a professional can help alleviate some of the stress and take some tasks off your plate,” he said. “A professional can take responsibility for managing investments, paying bills, planning and preparing tax returns, and providing advice on complex issues such as tax and estate planning. This can help make managing finances more convenient, and increase your peace of mind.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.