Nope. Never will be. My resentment is real. But at least I know that whatever I ended up with, I earned on my own merits. No nepo baby here.
We started helping our kids with their housing when they were in their 30s and it has continued into their 40s. Two of our grandchildren are in university so we have also given them assistance.
Despite our substantial gifts (I won’t provide numbers as I am not anonymous here) it is a modest fraction of the cost of buying a property where our 4 children reside (Vancouver and London). However it has enabled them to avoid carrying costs that would otherwise have greatly stretched their budgets.
I think a lot of seniors may overestimate the amount of savings they need in retirement so that is part of the reason they do not provide more generous gifts to their children? You can provide unlimited gifts to children in Canada without any tax consequence to them; the only taxes would be the normal capital gains taxes you would pay on sales of investments or the income tax on distributions from registered (= qualified) plans.
I think this is a key driver.
They accumulate money over many years (vs gifting) because they fear ending up in a home with fees running into the £1500+/week range (don’t know if the social care situation is as bad in Canada but in the UK its pretty bad). A couple of years of those fees will tend to obliterate their savings, which then usually means they have to use their house to pay for care (this is sold after they pass away).
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Or simply a sense of self-preservation.
In general my parents are seeking to pass on whatever money they don’t use, though it won’t likely be much.
The best way to do that would be to put their assets into a non-revocable trust in their kids’ names as of today, and we’d give them back their money as needed.
So long as we children obey our parents’ wishes (of course, barring some kind of dementia/etc.), there’s no downside. I have no need for their money now. Yet they don’t want to irrevocably give up control over their life savings.
What did you not get? I believe you, I’m just curious. (and maybe want to avoid making mistakes with my own kids).
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That is very sad to hear as I was more fortunate.
My parents had little financial resources (small family farm) and were not well-educated: they both had to leave school after grade 8 despite being excellent students. They would have needed to pay room and board to go to high school in town in those days and their parents would not assist them financially.
My parents both wanted THEIR kids to have the educational opportunities they hadn’t had and they made sacrifices to achieve that. I considered dropping out of school in grade 12 to work on the farm as my father was in ill-health but my mother talked me out of it (and again in first year university). Her determination to keep me in school was the incentive I needed to do well. Student loans, scholarships and bursaries got me through financially.
Not all parental help is financial in nature!
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My parents bought me a new car when I graduated HS (I had a full scholarship, so they basically made me whole compared to what my sister’s education cost). They also gave me 10k to help with a down payment. Over the past decade or so, they have been gifting us about 10-12k a year (the kids share goes into their 529s). Those are all things that helped financial stability, and the 529 money has meant that I have not had to set aside much on my own over the years, but I don’t think it has necessarily had a significant impact as it was incremental to what I was already earning. I can do the math and say if nothing else, I will be able to retire a couple years earlier.
I’m kinda surprised they haven’t been gifting away more money to me and my sister. I think they have somewhere between 6-8M, more than they will ever spend down (I doubt they spend more each month than they get in SS/pension income). I am not sure what I would do differently even if they did.
I’m guessing they feel you don’t need it? None of my kids have jobs that pay anything near what I made as an actuary and they have struggled with housing costs. They needed it!
Yeah, that’s definitely part of it. My sister and I are both doing well enough financially. I guess I will at some point have a similar decision to make with my own kids - I’m expecting they will need it, so maybe less of a decision to help.
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What makes you think the kids will need financial help?
Is there anything you can do now to “steer” them away from needing help?
My kids are young but I am always looking for more ways to make them more self reliant
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I’ve seen several instances where the Bank of Mom and Dad help their adult kids put together a down payment in an expensive real estate city (where the jobs often are) so that they can take out a mortgage. That gets them into the property market and their monthlies are going towards the mortgage rather than evaporating with rent.
The new home owners feel more incentivized to keep paying down their mortgage on a tangible property rather than saving up for a down payment far in the future. In my parents generation it might only take 3 or 4 years to save for the down payment but nowadays it can take (in some cities) more than 10 years.
They aren’t very materialistic, so I don’t think they will chase anything for money, which is probably a good thing. I think one will end up at a 4 year university (probably taking an extra year or two to settle on a major) but end up in a lower paying field, and the other will get an associates degree in something.
I push them a lot more than their mother will, so maybe a tangent topic for the lounge some day…
I shared an apartment with a friend for 18 months when I graduated to help get to a down payment on a house (as noted, my parents also chipped in). I also paid 24k cash for a new car using up most of what I had saved working internships during college years. That was a questionable priority as there was nothing wrong with the car I had…my family always drives new cars so it seemed rational at the time. I did keep that car for a long time, so it was OK longer term.
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I’m not going to fuel DP’s resentment of how awesome my parents were, both genetically and their child-rearing expertise.
Nope, not gonna do it.
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So you’re saying it all happened in adulthood.
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Interesting and alarming study results.
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I made my first visit to a lawyer today to consider a will/trust. My 20-something kids are financially illiterate and I will probably have to bequeath the money to a trustee who can see that they get that money over their lifetime. It’s not that my kids waste their money, let’s just say my son has about $100K and it’s all in checking and savings. Both kids are contributing 7% to a 401k to get the full match, I did insist on that. They just aren’t interested, it isn’t because I haven’t tried to make opportunities to learn.
Last year I offered them each $7K to open a Roth IRA and the daughter said yes and we checked it a year later and now it’s $8K. The son declined the money! But they are nice kids.
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Teach the grandkids. With the parents’ permission.
Maybe each birthday, you give them a gift, plus $100 added to a stock account that they can access but you gift them when they turn 18. Not an exorbitant amount of money, but enough to help them with college incidentals or rent or a car. Meanwhile teaching them the value of investment and maybe jump-starting their curiosity in doing the same for themselves.
They could be declining the money because they don’t want to take from you