The parent's wealth window
Published 15/11/2012 | 05:00
PARENTS will only enjoy a brief window of wealth between the ages of 58 and 65, according to a new study.
These are the years after a couple's children have left home and while at least one householder is still earning a full-time wage, but before retirement forces people to live on a reduced income.
The seven years of financial freedom will appear painfully short to some people.
Average life expectancy is getting close to 80, meaning most people will only spend one-eleventh of their lives in total financial security.
The research found that once people reach 58, their debts tend to have been cleared, their mortgages have been paid and their children have finally moved out of the family home.
However, just seven years later, regular income ceases and people are forced to live on a reduced retirement income.
The research, by life insurance company Prudential, found that three-quarters of the 1,000 people over the age of 55 who were polled had very little disposable income in their 20s, 30s and 40s.
During this time, most money went towards paying the bills, supporting children and making payments towards mortgages, rent and loans.
But almost half anticipate being richer towards the tail-end of their career as they finally start to enjoy their hard-earned cash.
"As an adult, there will be financial commitments throughout your working life, but you can get to the point – albeit potentially quite brief – where things ease up and you finally have a little money to spend on yourself," a spokeswoman said.
"The mid to late 50s can be the point where you stop fork- ing out for your children's education, cars, weddings and rent. If you are tied into a 25-year mortgage, this might also be the time when you've cleared the balance."
The study found that the average 55-year-old embarked on their first full-time job at age 18, settled down with a partner by 24 and started a family two years later.
A house was purchased at age 27 and the mortgage final-ly cleared by age 53. By the age of 52, their children left home, and most parents stopped supporting them a year later.
The average respondent reckons all their debts – mortgage, loans, credit cards and store cards – will be cleared by age 58, and they intend to retire at 65.
When asked how they intend to spend their money during their window of wealth, six in 10 plan to go on holiday, while 45pc will spend more money on home improvements. A further three in 10 would like to eat out more, while 22pc will socialise with friends.
Irish Independent Supplement