There is a reason why the friendly people who bring you food and drinks at restaurants prefer to be called servers and not waiters. A “waiter,” it seems, has another meaning that’s not looked on too kindly. They are the people who are “waiting” on an inheritance to fund their retirement, and about two-thirds of Canadians fall into that category, according to a new study.
The Ipsos Reid survey, commissioned by HomEquity Bank, says 35 per cent of Canadians are “waiters,” counting on money left behind in a will to fund their retirement. Another 45 per cent aren’t expecting an inheritance, while the last 20 per cent say they aren’t sure (although most probably wouldn’t turn it down.)
But before we go calling the kids greedy, the HomEquity Bank survey says 94 per cent of respondents expecting an inheritance are willing to give up half of it to maintain or improve their parents’ lifestyle.
Since the survey was paid for by the people behind the CHIP reverse mortgage, respondents were also asked if it bothered them that their parents tapped into their home equity, potentially depleting the inheritance.
“We do sometimes see examples of entitlement, but they’re definitely in the minority,” HomeEquity’s Yvonne Ziomecki states. “We often find adult children aged 45+ are very focused on what’s best for their parents and they are very willing to forgo half their inheritance to improve their parents’ lifestyle.”
She says the majority of HomEquity clients leave an inheritance to their children and in most cases, at the time of sale, they have an average of 50 per cent of the equity left in their homes.
The results of the HomEquity study are consistent with another BMO survey done earlier this year that shows about 40 per cent of Canadians feel they will fund their retirement through an inheritance, as well as an HSBC Bank report released last fall putting that figure at 39 per cent.
In the HSBC study, the median expectation was for $77,213. That won’t be enough to fund retirement for very long, but at least they aren’t the 34 per cent from the BMO study expecting to win the lottery.
Another inheritance-focused survey released this spring shows high-net worth Canadians (those with assets of more than $1 million) plan to leave nearly one-third of their wealth to their children. They were also confident the kids wouldn’t blow it all on something silly, according to the BMO Harris Private Banking study.
It shows almost 80 per cent of survey respondents feel their children are ready to manage their inherited wealth. About two-thirds have made sure of it, by educating their kids about money matters.
As for the rest of the inheritance that didn’t go to the kids, 60 per cent of survey respondents said they’d divide it up between a surviving partner or spouse, while the rest would will it to charities or a company.