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P Boomerangers and housing values may affect retirement Dollars & Sense Peter Watson Guest Contributor 11 | Thursday, May 30, 2013 | OAKVILLE BEAVER | www.insideHALTON.com arent's plans for transitioning into retirement may be negatively impacted by both their unestablished boomerang children and a house poised for a potential decline in value. Boomerang children are nding it dif cult to establish themselves in this post-recession era. According to a study by TD Canada Trust, they are adding nancial pressure to their babyboomer parents. Unemployment in the 15-24 age bracket is running at 14.2 per cent; twice as high as the unemployment level for the general Canadian population. Young adults are the only age category yet to return to the pre-recession levels. That poses nancial challenges for both the children and their parents. How much nancial support can the parents afford? The child is at the start of their earning years and the parents are at the end. Parents might not be able to replace the funds spent on their children and that could affect their ability to maintain their desired standard of living during retirement. Overspending to support adult children might result in the parents becoming nancially dependent on their children in later years. That is the nancial perspective. From a parent's child rearing perspective, encouraging children to be nancially independent can be bene cial for the child who wants to be a totally self-sustaining adult. Perhaps the parent's real asset is their ability to discuss the different ways children could generate an income. Be a mentor, coach or sounding board. Offer advice challenges and then be able to purchase the houses baby boomers currently own? How will they be able to afford the current prices? In the world of economics, we are very interdependent. Children rely on their parents for nancial support. The parents rely on the youth to eventually buy their houses. The TD Canada Trust study provided the details of what we intuitively know. The younger generation has nancial challenges. Our challenge is to understand the possible outcomes and understand the impact it will have on us either directly or indirectly. The lesson learned by this is to always consider what can impact your future nancial security. -- Submitted by Peter Watson, MBA, CFP , R.F .P ., CIM, FCSI., Certi ed Financial Planner on job search strategies, part-time work or even starting their own business. What each parent does to support their children can depend on a number of factors. Ultimately, it is a parental decision and each family will create its own solution. Adding to the impact of boomerangers on baby-boomer parents is the potential decline in housing values after several decades of soaring prices. Most people more than 50 years old think the value of their house can only increase. The house is their most signi cant asset and they assume they will downsize or sell some day and use those funds to pay for a part of their retirement. Low interest rates have helped make home ownership affordable. Consider that at some point in time interest rates will return to more historically normal levels, which are more than double the current mortgage interest rates. Look a decade or two into the future and ask yourself if the current, recently graduated generation will be able to cope with their economic Please RSVP by June 3, 2013 to Kris Copeland at 905-845-5597, ext. 239 or krisco@oakville.ymca.ca YMCA of Oakville Monday, June 10, 2013, 6:45­8:30 p.m. Visit ymcaofoakville.com/AGM for more information Annual General Meeting