Grand sacrifices

Early retirement neatly coincides with the years that grandchildren need care — and guess who gets the call for help? Lesley Parker reports.

Retirees have a "sweet spot" of about 10 years when they have both the energy and the financial resources to enjoy themselves, but increasingly these golden years are being spent changing nappies and making play dough instead of ticking off their "bucket list" of things to do before they kick the proverbial.

Financial advisers say some clients aren't able to travel or enjoy the company of friends because they're providing free childcare, but they won't broach the subject with their adult children for fear of creating bad feelings.

One perspective is that retirees are stepping up because they're worried about the financial strain their adult children are under at a time when the cost of a house in the inner suburbs of major cities tops $1 million. If they can't help with cash, they want to help "in kind".

A less generous view is that some adult children don't want to curtail their own lifestyle - where the nice house in the desirable suburb equals both being at work - even if that means curtailing their parents' lifestyle in retirement.

A study in 2011 by Access Economics, Australian National University and Australian Treasury found that 37 per cent of care for preschool children was "informal", often provided by relatives and friends.

Financial advisers and seniors groups say balance is needed so retirees can lead their lives to the full while they're still healthy without feeling guilty.

They say retirees have to set some boundaries - and adult children have to ask themselves whether being a carer is really what mum and dad want.

"What the grandparents say when talking to their kids is probably totally different to what they're saying to me as their adviser, or to their friends," says certified financial planner Ben Maw of BPM Financial.

What they're telling him is that they love their grandchildren but feel pressurised.

"Several of my clients are now fully retired and fortunate enough to have the financial resources to be able to do all the things retirees should be doing in the early years of retirement, while their health is OK," Maw says. "[But they're] not able to take the trips away that they would love to take due to pressure from their adult children to help out with babysitting or looking after grandchildren.

"I'm continually hearing this same line: 'We'd love to book a big trip away but our son/daughter needs us to help with looking after the grandchildren several days a week.

"I then get the story about how their adult children have a massive mortgage and both need to work to meet repayments and can't afford or prefer not to use childcare."

The tipping point for Maw was when a client couldn't even consider a few days interstate. "The reason I get annoyed by this situation is simply this: a retiree may have a five- or 10-year window - though hopefully longer - from when they first retire where their health is good and they can have a very active retirement. If they're getting emotionally blackmailed to be on hand to provide childcare, then from where I sit it's really limiting the golden years of retirement. Health changes too quickly at that age."

These golden years of retirement tend to neatly overlap the years of early childhood for grandchildren, when childcare is most needed. Advocacy group National Seniors has also seen the problem. Chief executive Michael O'Neill says grandparents are under "great pressure" to provide help so both parents can work but not have their income eroded by expensive childcare.

"It's happening, and happening much more often," O'Neill says. There are clearly housing affordability pressures on younger people, he says, and their parents' generation attaches great importance to owning a home. So grandparents who can't contribute cash figure they can help out by providing childcare.

"The key question is getting the balance right," O'Neill says. "Where you draw the line is up to individual grandparents to decide but they shouldn't feel guilty - that's part of the respectful conversation that the whole family should have."

If grandparents plan to travel, they need to make it clear that alternative arrangements will be needed for that period and not feel guilty about saying so. "It's about saying, 'You've got your [life], I want a bit of the same - I want to lead my life fully as well. Part of that is being connected to my grandchildren but I also want to do other things'."

Maw says adult children should ask themselves whether they're taking advantage of their parents' generosity - perhaps the offer of one day a week has stretched into an actual three or four days.

"It's a really fine line between what's good company and enjoyable time with the grandchildren and what becomes a bit onerous," he says. Adult children should make it clear they can make other arrangements for childcare if necessary.

"If the grandparents know there's alternative care available they're not going to feel obliged," Maw says.

Retirement lifestyle author Jill Weeks agrees that a frank family discussion is required.

"Ideally, before retirement there needs to be a discussion with the parents about the likelihood of babysitting ... the issue of the grandparents travelling or being away or pursuing things they've longed to do needs to be raised," she says.

"It's important to discuss with children that you may not be available ... due to travel and other pursuits."

The family also needs to talk about what happens if and when childcare becomes too tiring.

Key points

The first decade is when retirees have the most money and best health.

It's also when grandchildren tend to be preschool age.

Adult children may have a big mortgage and therefore two jobs.

As a result grandparents are curtailing their lifestyle to provide care.