Keeping finances in the family
Would you be willing to help your adult children financially if they were experiencing financial difficulties? And would you be willing to help your elderly parents if they were in financial need?
As Smart Investing discussed over the past week, intergenerational financial issues are set to become increasingly common given the ageing of our population. (See The intergenerational financial squeeze, November 27.)
Of course, many instances of providing financial assistance between generations would involve providing a financial helping hand from time to time rather than aiding an elderly parent or adult child in actual financial difficulties.
The Australian Institute of Family Studies has just released a research paper, Attitudes towards intergenerational support, that gives an insight into how willing we might be to provide financial assistance to our adult offspring or our parents.
Its authors – the institute's assistant director for research Ruth West and senior research fellow with the institute Lixia Qu – refer to a range of research projects covering attitudes to intergenerational finances. And they conclude: "[The majority of] Australians believe that parents and their adult children have an obligation to support each other practically and financially."
West and Qu have analysed data from the comprehensive 2012 Australian Survey of Social Attitudes, conducted by the school of demography at ANU, to find that:
- 59 per cent of adults agree that parents should provide financial support if they are in financial difficulties.
- 64 per cent of adults agree that adult children should provide financial support to parents if they need it.
- 63 per cent of adults agree that parents should allow their adult children to live with them if accommodation is needed.
As we have previously discussed, individuals who want to assist either their adult children and/or elderly parents face somewhat of a balancing act. It is critical not to overlook your own needs to save and invest for retirement.
06 December 2016