As we prepare for the return to school year, you might be in the process of paying your child’s tuition or living expenses. Do you know what raising a child cost? Contrary to the figures below, it doesn’t stop when they reach 18 years of age.
In 2011, the average cost of raising a child to 18, was $243,660* or $1,070 per month. For those of us in the sandwich generation, in addition to child care, many are also providing parent care. What is the cost of looking after our parents?
Besides the emotional cost of providing care to our parents, and the time spent away from work, friends or other family, many adult children are contributing or paying for their parent’s care.
The BMO 2012 study# found that “seven in ten caregivers are providing some kind of financial assistance to their parents or aging relatives. Most report that they simply had no idea what to expect when they took on the obligation. Half of those providing financial assistance to an aging friend or relative say they have had to adjust their retirement plans as a result. Caregivers who provide financial assistance to a relative living in his or her own home may face higher costs than those who share accommodations with the older relative.”
Twenty-eight percent of Canadians are providing informal care to a family member or friend . Adult children providing care were most often between the ages of 45 to 54 years (24%) and 55 to 64 years (20%). At this age, one might think that a parent’s financial contribution to their (adult) children should be done, however this is not necessarily the case.
A recent Financial Post article (March 11, 2015) highlighted that: “More than a third of adult Millennials receive regular financial support from their parents, and 1 in 5 still live at home and don’t pay rent or expenses, according to a November 2014 survey by Bank of America Corp. It isn’t just the unemployed or the low-paid who are needy. The poll, which had 1,000 respondents between the ages of 18 and 34, found that among those earning more than US$75,000 a year, 25% had their parents pay for groceries at some point and 21% got money for clothing.”
For those of us who are thinking about retiring over the next while, it looks like we may need to keep working for a few more years yet!
As family members and professionals, we all need to be better prepared. The cost of care is only going to become more expensive, especially as our public and private resources are reduced. Not only will we soon have more seniors than young people under 15 but our pool of those who are willing to be paid to do this work, will also become smaller.