When I was growing up, I remember mum and dad as very clearly being diligent savers, always scrimping and saving to make sure they never carried debt other than their mortgage.

I also remember — just as clearly — hearing the words “I am sorry, but we can’t afford it”, come out of their mouths. As a child, that phrase was very annoying to hear, especially when it seemed clear that my friends’ families and others in my neighbourhood could clearly afford it.

Although at the time I was very unhappy hearing “we can’t afford it” over and over, looking back I am now extremely thankful my parents were that disciplined. This is because, as I have now discovered, I am one of a select few among my friends in that I am not providing financial assistance to my parents.

What is particularly shocking to me about this situation is the fact that my father was part of the blue-collar workforce, without a university degree or a skilled trade.

In contrast, many of my friends’ parents were in high-paying professions as lawyers, doctors, surgeons and accountants. It makes you wonder what is going on!

One thing is certain: regardless of what you do or how much money you earn, without financial discipline and a forward-thinking mindset — especially during your early years and throughout your working life — you are likely to face difficulties in retirement and may even become a financial burden to your children.

The phenomenon of adult children stepping in to financially support their ageing parents has become increasingly prevalent. It is a trend that is often driven by the realisation that many parents, despite their years of hard work and life experience, struggled to manage their finances effectively.

As a result, their children find themselves in the difficult position of having to bridge the financial gap to ensure their parents can maintain a reasonable quality of life during retirement.

Although this support is partly motivated by love, it is also driven by a sense of duty. Moreover, it raises complex questions about parents’ financial planning and the long-term implications for your own financial wellbeing.

Many parents — especially those who either did not understand the importance of sound financial management or did not prioritise it — find themselves unprepared for the costs associated with retirement.

Ineffective money management can include accumulating excessive debt, failing to save adequately, making unwise investment choices or neglecting to plan for needs related to long-term care.

Regardless of the causes, the outcome remains the same: adult children often find themselves stepping into the role of financial caregivers, sometimes at the cost of their own financial stability.

So how do you deal with the situation when you are asked (or expected) to financially provide for your parents during their retirement years — and prior to your own?

First, it is important to note that as parents age their financial needs often change, and they may find themselves in circumstances where additional help becomes necessary.

Approaching this issue thoughtfully and compassionately is vital to maintaining healthy relationships while ensuring the wellbeing of both parties.

Open and honest communication is imperative, as it will form the foundation for a constructive approach. Sit down with your parent(s) in a calm, non-judgmental setting to gain a thorough understanding of their financial situation.

It is very important to listen empathetically and to recognise that ageing can bring about feelings of vulnerability. Although you may be inclined to call their previous money management into question, this can only have a negative influence on how open they decide to be with you.

Once you have a clear picture of their financial situation, you will then need to evaluate your own financial capacity. Supporting parents financially should not jeopardise your own stability or future. Establishing boundaries is crucial.

Decide in advance what you can reasonably contribute without feeling resentful or financially strained. Sometimes, offering non-monetary assistance — for example, helping them to manage their finances or assisting with budgeting — can be as valuable as direct financial aid. This approach encourages independence and reduces the risk of creating an expectation that you will always be the primary financial supporter.

That said, another important question to ask is when it is the right time to provide direct financial assistance? Although this may seem straightforward, it is actually quite a complex question.

Should you step in when your parents have only $100 left in their account, but still own their home outright? Or should help come only after they have exhausted their entire net worth? What is the appropriate threshold not just for them, but also for you?

Striking this balance requires careful thought and a clear understanding of both their needs and your capacity to assist.

Consider their income, savings, debts and expenses. If they are facing unexpected medical bills, losing income or are vulnerable to poverty, providing assistance may be necessary. A common threshold to use as a guide is when they are at risk of not being able to meet their basic needs, such as housing, healthcare and food via regular income or savings.

However, the situation becomes more complex when your parents still own their home, but have depleted most of their savings and have no regular income.

This creates a moral dilemma, as your initial instinct might be to advise them to sell their house and use the proceeds to fund their retirement years. Ideally, this approach would help secure their financial future and reduce the need for ongoing assistance from you. However, if they are happy in the house — and it is not a financial drain — why push them to sell? Let them live their remaining years in the home.

At the end of the day, striking a balance between supporting parents and encouraging their independence is key. Just be sure that in the event you are asked to provide financial assistance, you understand what exactly you will be helping with, it is their basic needs or is it their lifestyle?

• Carla Seely has 25 years of experience in the international financial services, wealth management, and insurance industries. During her career, she has obtained several investment licences through the Canadian Securities Institute. She holds the ACSI certification through the Chartered Institute for Securities and Investments (UK), the QAFP designation through FP Canada, and the AINS designation through The Institutes. She also holds a master’s degree in business and management