Pattie Lovett-Reid

Chief Financial Commentator, CTV

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It is natural to want to help your children.  Parents and grandparents want the best for their family so much so that in some cases they are willing to compromise their own financial security and retirement planning.

A new report released by TD Bank Wednesday highlights the boomerang “Deja-Boom” effect is in full swing, with 25 per cent of Canadian millennials continuing to lean on their parents for support. If parents could afford it that’s one thing, and might be okay at least temporarily, but 62 per cent acknowledge that it is preventing them from saving enough for their own retirement with 58 per cent feeling financially stressed about the situation. Who wouldn’t be?

The good news here is that both generations recognize this isn’t an ideal situation. Forty-four per cent of millennials are aware their financial assistance means less money saved for their families in retirement, while 43 per cent admit they will cut costs when facing financial difficulty. My questions are what about the other 57 per cent and why is there more concern about the financial burden their lifestyle is placing on their parents?

Time for a reality check.

If you plan to help your children and can afford to do so – great. However, providing ongoing financial support to help them sustain a lifestyle that is beyond their economic means is not okay. It is time to sit down and discuss everyone’s financial situation in an open and honest way. Negotiate what will be paid for and for how long. I love TD’s “smart strategy.”

S – Sit down and set specific goals

M – Ensure the goals are measurable

A – Have everyone agree to the goals and commit

R – Be realistic

T – Time based

Saving for retirement is hard enough. Saving for retirement while continuing to fund the next generation for some could be near impossible.