Many retired couples have worked hard, saved consistently, and made smart financial decisions to enjoy a comfortable retirement. But there’s a risk that often flies under the radar—their adult children and the financial burdens they carry.
It’s not uncommon for parents to feel obligated to help their children, especially when hardship strikes. Rising costs of living, job insecurity, and ballooning mortgage and personal debt mean many adult children are financially vulnerable. And when something goes wrong, it’s often Mum and Dad who are asked to step in.
When Kids Struggle, Parents Pay
A serious illness, injury, or redundancy can suddenly derail your child’s ability to meet their financial commitments. Without proper insurance in place—particularly income protection—they may have no safety net. When that happens, it’s often retired parents who are called on to help cover mortgage repayments, medical bills, or everyday living expenses.
This can place significant stress on your retirement plans. Whether it’s drawing down more than planned from super, re-entering the workforce, or even downsizing prematurely—supporting adult children in crisis can have a real financial cost.
Income Protection: A Safety Net for Everyone
Income protection insurance pays a portion of your child’s income if they can’t work due to illness or injury. It helps them keep up with debt repayments and maintain their lifestyle without turning to the Bank of Mum and Dad.
The premiums are often tax-deductible and, if your child is young and healthy, the cost is typically quite reasonable. Best of all, it reduces the financial pressure on you if something goes wrong.
Other Cover to Consider
Depending on their circumstances, life insurance and TPD (Total and Permanent Disability) cover may also be appropriate—particularly if they have a mortgage or young children. The goal is to ensure that any major life event doesn’t result in a financial ripple effect on your retirement.
A Simple Strategy with a Big Impact
Even if your child can’t afford to take out insurance themselves, some retired parents choose to fund the premiums as a family strategy. It’s a relatively low cost compared to the financial hit they might take if their child was uninsured and unable to work for an extended period.
Final Word
Retirement should be a time to enjoy the fruits of your labour—not stress over whether your children can pay the bills if life takes an unexpected turn. Protecting their income is also protecting your own financial future.
Speak with your SWU Group financial adviser today to explore simple strategies to help your children become financially resilient—so you can stay financially independent. financialsuccess@simonwu.com.au