Gifting Money to Family in Retirement

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Hello everyone, and welcome to the Retiring Canada Podcast. In today’s episode, we’re talking about gifting money to family in retirement.

Specifically, we’ll cover:

• The two kinds of gifts you can make

• How to set expectations

• A real-life scenario involving a substantial gift

• A hierarchy of financial needs to guide your gifting

• Tax implications of giving during your lifetime

• How gifting can foster deeper connection and support intergenerational wealth transfer

• And finally, a few action items for you to consider

  
  

As a retirement planning specialist, I often speak with clients who want to help the people they love. Many Canadians plan to pass down real estate, investments, or collectibles in their estate documents—but what if you, the retiree, have excess funds today?

Can you afford to give while you’re still around to witness the impact?

That’s what we’ll explore today—how we help clients determine whether they have the financial wiggle room to gift now without jeopardizing their retirement.

Over my career as a Certified Financial Planner, I’ve helped hundreds of households build sustainable retirement income. Through our Fundamental Retirement Plan process, we help answer the big question: Will you run out of money?

Once that’s resolved, the conversation often opens up to things like traveling more, upgrading homes or vehicles—or, as we’re focusing on today, gifting to your kids or family now rather than waiting until after you're gone.

Right now in Canada, it can be tough for younger generations to get ahead—rising home prices, increased cost of living, and limited opportunities all play a part. Some of you may have adult children who could use a boost: to build an emergency fund, save for a down payment, pay for a wedding, or reduce student debt.

But first things first—make sure your retirement is secure. This is especially important if you're in the "fragile decade": the five years leading up to retirement and the first five years after. Poor market returns or overspending during this period can derail your plan.

Use financial planning software or work with a planner to explore “what if” scenarios. It can give you the peace of mind to gift now, knowing you’re not putting your future at risk.

Strings or No Strings?

Assuming your plan confirms you have the room to gift—what next? The first consideration: is the gift truly without strings, or do you have expectations for how it will be used?

There’s no right or wrong answer here, but clear communication is critical. If there are expectations, make them known. Some recipients may feel uncomfortable accepting money with conditions. And once the money is in their account, you can’t control what they do with it—so set realistic expectations for both sides.

A Real-Life Scenario

Let me share a unique situation I encountered. A widowed client in her late 70s had a net worth in the millions—most of it liquid. She wanted to see her adult children enjoy their inheritance while she was still alive.

Her plan? Gift each child $100,000 and check in after a few months to see how they used the funds. If they made wise financial choices, she planned to transfer even more over the coming years. Her intention was to give away most of her wealth during her lifetime, holding back only what was needed to cover her own future care.

We helped her define that number—factoring in longevity and potential long-term care costs—and once we were confident, she moved forward with gifting.

Now, this isn’t for everyone. What if one child spends the money recklessly and another uses it wisely? Does one get more than the other? What counts as a “responsible” use of funds? And what if one child is married—will the money be protected in a divorce?

In her case, the money came from a major business sale, so the taxes had already been paid. But that’s not always the case. Gifting appreciated assets could trigger capital gains and other tax consequences.

While this strategy had merit, it also carried risk. If you want to test financial behavior, consider starting with a smaller gift.

A Gifting Hierarchy: 7 Financial Priorities

If you’d like your gift to improve your child’s financial situation, here’s a helpful framework:

1. Pay off high-interest debt – Credit cards can be crippling. But consider the recipient’s habits—will they rack it up again?

   
   

2. Build an emergency fund – A financial cushion can prevent future borrowing.

   
   

3. Tackle other debt – Student loans, lines of credit, or mortgage prepayments.

   
   

4. Save for goals – Encourage use of TFSAs, FHSAs, or RESPs if grandchildren are in the picture.

   
   

5. Help with a vehicle upgrade – A practical, lasting gift.

   
   

6. Fund experiences – A family vacation you plan and pay for can build memories that last.

   
   

7. No strings attached – Simply give, with no expectations or conditions.

In most situations I’ve seen, even if the gift is presented as “no strings,” there’s a hope it’s used to help the recipient get ahead.

Tax Planning and Trusts

Back to our earlier example—the woman’s gift was also a tax move. Her portfolio was generating more income than she could use, pushing her into the highest tax bracket. Gifting helped reduce her future tax burden.

For those with significant wealth, tax and estate planning become critical. In some cases, a family trust may be appropriate. Trusts can help with:

• Income splitting

• Reducing family tax burdens

• Asset protection from divorce or creditors

• Smoother intergenerational wealth transfers

If you’d like me to do a future episode on using trusts for intergenerational wealth, let me know in the comments.

Action Items

1. Build a retirement plan – One that includes income, investment, tax, healthcare, and estate planning. Only then can you confidently gift without risking your future.

   
   

2. Talk to your family – Ask your child how a gift could be most helpful today. Their priorities might surprise you.

   
   

3. Start the conversation early – Whether you gift now or later, your children will eventually inherit your wealth. Talking now can help transfer not just money—but wisdom too.

You won’t always agree with how your kids handle money. That’s okay. These conversations can still build stronger relationships.

Thanks for tuning in to today’s episode. Be sure to follow us on social media—LinkedIn, Facebook, and more.

You can find links and resources in the show notes or visit retiringcanada.ca.

If you enjoyed this episode, please subscribe and leave us a 5-star review on your favorite podcast app. And don’t forget to sign up for my Retiring Canada newsletter.

And remember—when it comes to your retirement:

Don’t take chances. Make a plan so you can retire with confidence.

All comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary may not necessarily reflect those of Harbourfront Wealth Management. While every attempt is made to ensure accuracy, facts and figures are not guaranteed, the content is not intended to be a substitute for professional investing or tax advice. Please seek advice from your accountant regarding anything raised in the content of the podcast regarding your Individual tax situation. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.