Derek Gascoigne said you could be risking your retirement by dipping into your superannuation to help your kids. (Source: Getty\/UniSuper) <\/p>\n
Older Australians<\/a> are being urged to think very carefully about how they use their money to help their children<\/a> or grandchildren. The Bank of Mum and Dad<\/a> has become the fifth-largest lender in Australia, as it is increasingly being tapped to help with house deposits and everyday expenses<\/a>.<\/p>\n But some are choosing to dip into their superannuation for these mega-handouts<\/a>, which could have disastrous effects on their retirement<\/a>. Derek Gascoigne, private client adviser at UniSuper, told Yahoo Finance that older Aussies should tread carefully.<\/p>\n “Superannuation is obviously an easy source of cheap finance,” he said.<\/p>\n “It’s a lot easier than having to go back to the bank and perhaps get a loan themselves, but it gets particularly difficult when there’s no longer any employment.”<\/p>\n If you still have a few years of work left, you can tighten your belt and build that retirement nest egg back up while you act as the Bank of Mum and Dad.<\/p>\n But once you hang up the work boots forever, any handout will mean you have to ensure you have enough leftover for your own retirement.<\/p>\n Do you have a story? Email stew.perrie@yahooinc.com<\/strong><\/p>\n Separate research from UniSuper and Mozo<\/a> found the average Australian parent lends their children between $33,278 and $74,040 to help with a home loan.<\/p>\n “We’ve all boarded a plane and heard the safety briefing to fit your own mask before you help others,” Gascoigne told Yahoo Finance.<\/p>\n “This is a big one that people lose sight of, which is understanding exactly what the impact of taking a certain amount of capital away from the bucket early in retirement, and what that’s likely to mean for the longevity of their own money and their ability to be able to meet their own retirement objectives.”<\/p>\n The Association of Superannuation Funds recently revealed<\/a> that couples now need $75,319 per year to have a comfortable retirement, while a single person would need $53,289 per year.<\/p>\n That means you could be axing a year’s worth of living by acting as the Bank of Mum and Dad.<\/p>\n Gascoigne urged older Aussies to look at what a “safe” amount of money would be to give to their kids or grandkids and not stretch beyond that.<\/p>\n Story Continues <\/p>\n He admitted the thought of his kids trying to get on the property ladder “keeps him awake at night”, but said it’s essential for older Aussies to strike the right balance of helping their kids while ensuring their retirement isn’t massively affected.<\/p>\n The UniSuper expert also said it’s worth understanding some of the issues that can pop up when gifting money.<\/p>\n “Sometimes when they’re helping out one child, there’s another sibling and then they feel obligated to repeat the handout for the other child,” he said.<\/p>\n “Also, they might give money to a child who buys a house with their partner. There are concerns around what happens to that if their own direct child passes away, or perhaps the relationship dissolves.”<\/p>\n But it’s not just property that mums and dads are pitching in for.<\/p>\n New ING research revealed that more than half (53 per cent) of parents surveyed are helping their adult kids with a range of other everyday expenses.<\/p>\n Here are the top five areas where Aussie parents lend a helping hand:<\/p>\n Food (dining out or groceries) – 27 per cent<\/p>\n<\/li>\n Medical expenses (dental, therapy) – 18 per cent<\/p>\n<\/li>\n Rent\/mortgage assistance – 16 per cent<\/p>\n<\/li>\n Car\/transport costs – 15 per cent<\/p>\n<\/li>\n Phone bills – 13 per cent<\/p>\n<\/li>\n<\/ul>\n ING revealed parents are giving $1,635 per month to assist their adult children.<\/p>\n But this appears to be much more of a new-age trend, with 76 per cent of Gen X parents pitching in for everyday expenses, compared to just 44 per cent of Baby Boomers.<\/p>\n Get the latest Yahoo Finance news – follow us on <\/strong>Facebook<\/strong><\/a>, <\/strong>LinkedIn<\/strong><\/a> and <\/strong>Instagram<\/strong><\/a>.<\/strong><\/p>\n \n