Helping your kids financially – the great wealth transfer from baby boomers to millennials

The greatest wealth transfer in history – from baby boomers to younger generations has begun.

The bank of mum and dad continues to play a major role in the NZ housing market and will do for years ahead.

So, can you afford to gift to your family yet and still have a comfortable retirement?

It’s a complex question that requires evaluation of your financial situation, goals, and priorities. While the desire to provide financial support to family members is understandable, it’s crucial to strike a balance between generosity and prudence, ensuring that your own financial well-being remains secure.

Here are some key considerations to help you decide if you can afford to help your children financially:

Assess your own capital position:

Whether you’re pre-retirement or already retired, before making any significant financial commitments, evaluate how much you’ve got to live off, expected expenses, life expectancy etc. You also need to consider if there are changes down the track (such as the sharp jump in inflation in recent years) whether your situation is still comfortable.

Glyn Lewis-Jones says this is something they help people with all the time “We start with reality checks to make sure their plans aren’t too optimistic or pessimistic. We then go into the detail to ensure spending and gifting decisions match the persons capital and circumstances”. Glyn says the use of computer modelling software makes this a visual process that makes sense to people.

Helping your kids when they need it most:

Most people inherit when they are around retirement age. However, the age that people would most benefit from additional capital is in their late 30s to mid 40s – when debt it high, children are young, there is pressure for both parents to work.

Understand the implications of giving your money away:

It’s important to be mindful of potential future relationship changes and consider whether you loan the money rather than gift it outright for example. Make sure everyone is clear on the situation and have it well documented and seek legal advice.

Think about alternatives to outright cash:

Funding a multi-generational family holiday for example, where you get to spend time with the family as well as all enjoy a holiday. You could also help by paying the mortgage for a month for example.


The Team at Castle Trust Financial Planning can provide personalised advice to help you decide whether you’re in a position to be able to help your children.

Your better financial future starts here

Your better financial future starts with a conversation with one of our financial experts. We offer 30 minutes free consultations to help give you peace of mind that we can help you where you need it most.
Book now


Richmond office: 278 Queen Street, Next to the Library
Phone: 03 544 1428
Motueka office: 217 High Street, Opposite Elevations
Phone: 03 528 4184
Castle Trust Financial Planning logo white

© 2024 Castle Trust Financial planning. All Rights Reserved. Disclosure information. Privacy Statement.

chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram