By UniSuper
If you’re lucky enough to have grandchildren, you know the feeling.
Cooking and gardening while your grandchildren ‘help’. Watching them reach the milestones your kids reached all those years ago, right in front of your eyes.
And of course, spoiling them rotten in a way that makes your kids roll their eyes.
Maybe these moments are something you’ve dreamed of your whole life – a big feature of your retirement years. Or maybe you never thought you’d be one of those grandparents who’d give up all their spare time for free babysitting. But now you can’t wait to spend every spare minute with them.
Well, maybe a bit less so when their parents are late to pick them up and they’re chucking a tanty and you just want your lovely empty nest back. But the point stands – it’s natural to want to be able to support your grandkids as much as possible, for as long as possible.
Wondering how you can keep helping out as they grow up? Even when you’re not around to lend a hand or shell out cash in person? Leaving a financial legacy is a way to give them a good shot at achieving what you want for them.
But when many ordinary Aussies think ‘generous grandparents’ or ‘inheritance’, they think family dynasties, massive portfolios, or worse, ‘those trust fund kids’. And that gets in the way of a lot of planning and action. Because the truth is, leaving a meaningful financial gift is achievable for most people. It just takes a bit of planning and preparation.
Tip 1 – Set meaningful goals
You set clear, realistic and well-researched financial goals for yourself. So don’t forget to do the same when you’re setting saving and investment sub-targets for your grandkids. Ask yourself questions like:
•Will they be able to get a better education with financial help?
•Do they need help with university, or will they take a different career path?
•Do they have healthcare needs that aren’t covered by insurance?
•If you helped them get a head start on a house deposit, would they be able to afford a mortgage?
•Would they accept your help in some areas, but not in others?
Tip 2 – Think about your time frame
Once you’ve got a magic number in mind, it’s time to think about… well… time. Your time frame will be determined by their age now, and the age/s at which they’ll need help. It might also depend on your age, how long you’ve got to go ‘til retirement, and other financial goals on your horizon. You might have five years to save and invest, or you might have 18 years. Side note: Your time frame could be extended if you use a structure like a trust which ensures that your grandkid/s don’t access the money until they’re ready to handle it and make smart decisions.
Tip 3 – Start with something
Feeling overwhelmed by the goals you’ve set, and everything you want to give you your grandkids? Start small and build from there. For example, you could investigate product categories that are generally lower risk and with a lower entry point, such as a high interest savings account.
Visit unisuper.com.au for some more practical starting points and guides on investing. Don’t forget, you’ve got access to a great range of financial education units online right now. They’re easy to access, and totally jargon free. What you learn in five minutes could help you give your grandkids a gift that’ll change their lives.
Disclaimer
The information contained in this document is current at April 2018 and is provided for education purposes only. It has been prepared by Money101 – Money for Life Pty Ltd without taking into account your particular financial needs, circumstances or objectives. You should consider the appropriateness of the information as it relates to you. You may wish to consult an adviser before you make any decisions relating to your financial affairs. Please note UniSuper has had no involvement in the preparation of content and is therefore not responsible for the information within the article.