Published on: Wednesday, February 12, 2025
I first heard the expression “Widow Boom” when I was writing “When the Pictures Changes – Gaining Financial Control After the Loss of a Spouse”. It derives from the fact that there had been a Baby Boom and women generally outlive men. Those demographics were creating a Widow Boom.
The Baby Boom has now also created a Grandparent Boom.
According to Statscan, there are close to 8 million people in Canada who are grandparents – about half of people age 45 or older. The average age of grandparents was 68 years in 2017. Canadians have 4 grandchildren on average.
Couple the aging Baby Boom with falling fertility rates and the result is the ratio of grandparents to grandchildren has reached an all-time high. This is having an impact on Canadian families in several ways.
First is the financial impact. A recent survey found that one in three Canadian grandparents support their children and grandchildren financially. The level and frequency of the support has increased over the past couple of years. In some cases, it is a drain on grandparents that is impacting the security of their own retirement plan.
But there is also a cultural impact. There are more grandparents around to help with babysitting, shuttling kids to soccer practice and piano lessons and otherwise be a backup for working parents.
In my practice, I haven’t seen a parent experience weakened financial security because of the needs of a child. There is a lot of talk in Baby Boomer circles about the “Bank of Mom and Dad” but that’s nothing new. It has become more prevalent in recent years with the increase in real estate prices. It is nearly impossible for young people to purchase their first home without some financial help from parents or grandparents.
I find that people help their grandchildren financially by helping their own children with kids, particularly in the early years. It can be direct support. But it is often by helping them with difficult situations. Stepping in to help them buy a new car or pay for repairs in an emergency, for example.
As the family grows, I find that it takes the form of providing a means for family experiences and unity. Grandparents will fund a holiday for the whole family or they’ll take teenage grandchildren on a special trip before they go off to university. Usually, people recognize that a) they are getting older and they should do these things while they still can and b) the grandchildren will be harder to pin down for such a thing as they mature and have other interests and commitments.
Clients will ask me to calculate how much capacity they have to help their children and grandchildren. It can be reworking their plan to include pulling lump sums for things like a child’s home purchase. Or it may be planning for additional cash flows to meet some other need.
The interesting thing is that these “expenses” are usually sudden and unexpected. Most people will say during the planning process something like, “We’d like to take a big trip every other year for 10 years”. But they don’t often say “In year 4 of retirement, our grandson will need help with tuition and a new computer”.
But a good understanding of their lives and their priorities might flush this out ahead of time. Experience and close ties to clients will help ensure the plan is ready for the “what ifs” I talked about last time. We might not know what it will be or when it will happen, but we can be ready for the unknown and ensure the clients have the capacity to step in and help when needed.