The problem with supporting adult children
A 2024 survey from Savings.com found that 47% of parents support grown children financially, to the tune of $1,384 per child per month. Meanwhile, 61% of adult children who live at home contribute $0 to household expenses.
The math is troubling, as their parents are only setting aside $609 a month in retirement savings, less than half what they’re investing in their adult kids.
No surprise then, that a 2024 U.S. Bank survey found that almost 25% of parents worry their children will depend on them financially well into adulthood.
To be fair, young adults don't have it easy. Inflation spiked in recent years, and many students graduate college with piles of debt. It's understandable that a 20-something might choose (or need) to live at home for a period of time to get on their feet.
But the more financial support you give your grown kids, the more it hinders your own financial goals, particularly around retirement. Federal Reserve data from 2022 found that among adults aged 45 to 54, the median retirement account balance was $115,000. For those aged 55 to 64, it was $185,000. These aren’t large sums to retire on.
If supporting your children financially is reducing your ability to save, it’s time to break that cycle.
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Learn MoreSetting boundaries and expectations
You may be loath to start a conversation with your adult kids about financial responsibility. The U.S. Bank survey revealed that parents would rather talk to their children about their choice of political candidate than finances.
But the sooner you have open discussions about money, the better. In fact, you can do your adult children a favor by replacing a sense of financial dependence with independence and mastery.
First, establish ground rules on how much they have to chip in to live under your roof. Make the connection between their living at home and the higher utility bills and grocery costs you pay.
Then talk about your own financial situation and goals — whether that’s setting aside savings, going on an overdue vacation or retiring with enough money to live independently.
Explaining that you need your daughter’s $130 monthly contribution to fund your IRA or 401(k) might resonate.
Ask your adult children about their own goals. You may even want to work on a budget together or connect them with a financial adviser.
It’s a noble thing to want to offer your grown kids financial support. But you shouldn’t do so in a manner that hurts your own finances or that hinders their own ability to succeed.
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