Two thirds of retirees and pre-retirees who have gifted significant sums financed the gift with cash, finds investor research
Nearly half of Canadians 50 years old and above have provided living gifts to their adult children, with retirees more likely to have done so, according to the Ontario Securities Commission (OSC).
In its recent “Profiles of Retirement” survey report, the regulator found 48% of Canadians aged 50 and above – including 52% of retirees and 42% of pre-retirees who were polled – have gifted a significant sum of money to their adult children.
Somewhat predictably, Canadians under 70, those with lower household incomes, and non-investors were more likely to report they’d never given monetary support to their adult child.
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Breaking down the purposes of those monetary gifts to adult children, the top responses were:
- The purchase of a car or other vehicle (12% of respondents, including 14% of retirees and 8% of pre-retirees);
- Rent or other ongoing living expenses (11% of respondents);
- A wedding or significant celebration (10%, including 14% of retirees and 5% of pre-retirees);
- Part or all of the purchase of a new property (9%, including 12% of retirees and 5% of pre-retirees);
- Reducing the balance on their adult child’s credit card debt (6%, including 8% of retirees and 3% of pre-retirees); and
- Reducing their debt such as a personal line of credit or personal loan (6%, including 7% of retirees and 4% of pre-retirees).
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Among pre-retirees and retirees who supported their adult children, two fifths (39%) said they gave less than $10,000.
Three tenths (30%) reported giving between $10,000 and $50,000; one sixth (16%) said they gave between $50,000 and $250,000; and four per cent said they gifted more than $250,000.
Older Canadians who offered monetary assistance to their adult children mostly tapped their cash savings, the OSC found, with two thirds (63%) saying so.
Other sources of funding for financial gifts included:
- Cashed-out investments in a non-registered account (11%)
- TFSA (7%)
- HELOCs (6%)
RRSPs/RRIFs (4%) - Downsizing to a less expensive home (3%)
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