Helping heirs now means enjoying shared experiences
Leaving a financial legacy may reassure older Canadians that loved ones will be secure, but many are finding that there is great benefit from sharing the wealth while still alive.
With many from younger generations struggling with the cost of living, impacting major goals such as homeownership, marriage, or post-secondary education, a new survey of homeowners aged 55 and older shows that more than half have made substantial financial gifts to an adult child or grandchild. More than half of those who have done so have gifted at least $25,000.
The HomeEquity Bank and Ipsos report shows that 17% of financial gifts were for weddings or other celebrations, 16% for property purchase, 14% for education, 14% for vehicle purchase, and 11% for travel expenses.
As a provider of reverse mortgages, the firm revealed a 16% year-over-year increase in those with these home financing products using funds to make gifts.
These financial gifts are perhaps not entirely selfless though, with a trend emerging of wealthy older Canadians funding travel experiences with their younger relatives. These ‘skip generation’ bonding experiences typically involve grandparents travelling with Gen Z and Gen Alpha grandchildren.
Older Canadians are also predicted to use some of their wealth to ensure their aging journey is smother, through investment in AgeTech products such as wearable devices, smart home systems and even social robots for companionship, helping them to live independently for longer, monitored where appropriate by relatives.
The research also highlighted how cash-rich older homeowners are expected to explore ways to access the equity in their homes to help them navigate the cost of living on a fixed income, especially as traditional mortgage renewals at higher interest rates may mean larger monthly payments.
"Despite financial headwinds, Canadians 55+ are taking an active role in creating stability and purpose in their lives by finding new ways to connect with family, and continuing to pursue independence, dignity and empowerment in 2025," says HomeEquity Bank president and CEO Katherine Dudtschak. "Following a period of extended inflation and increased monthly expenses, we see a desire amongst Canadian homeowners 55+ to explore new ways to access the savings in their homes to achieve their goals."
