Many parents dream of the day when they can enjoy an empty nest after their children fly away. But today’s kids increasingly find themselves grounded at home.
That reality means many parents are caring for adult children far longer than they expected. And that can have financially damaging implications.
Recently, Savings.com surveyed about 1,000 U.S. adults who have at least one child age 18 or older and found that half of these parents are providing at least some level of financial support to their adult offspring.
The pandemic has made the situation worse, with 26% of parents saying they have given more money to their children since COVID-19 arrived.
Following are some ways the plight of today’s adult children is resulting in parents seeing their own financial prospects erode.
1. Adult children cost their parents $1,000 every month
The survey found that, on average, parents are giving their children $1,000 a month just to help the kids get by. The money these adult children receive goes to things such as:
- Health insurance
Diverting so much cash to their kids is damaging both the present and future financial stability of these parents, as we’ll see later in this story.
2. Adult children don’t help with household bills
Overall, 61% of adult children who get financial support from their parents also live in their parents’ home.
Yet, 62% of adult children living with their parents do not contribute any money to paying the household bills, which puts additional pressure on parents’ finances.
And this less-than-ideal situation has the potential to last for a long time. Nearly 20% of adult children who receive financial support from parents are older than age 30, according to the survey.
Looking for ways to cut your household costs? Check out “5 Ways to Lower Your Monthly Bills in Minutes.”
3. Adult children are putting their parents’ retirement at risk
Perhaps most devastating of all, the money parents are spending on their adult children is putting the parents’ retirement at risk.
Parents who hold jobs while supporting adult children spend 23% more on their kids’ expenses — $605 per month — than they do funneling money into their own nest egg.
In addition, 1 in 4 parents say they would pull money out of their retirement accounts to support their adult children, and 22% would delay retirement to help their kids financially.
Parents will continue to make these sacrifices
Despite the financial stress of supporting children, parents remain determined to do so. Nearly half — 43% — have sacrificed their own financial security to provide for their adult children.
Parents also would resort to measures such as taking on more debt (17%), coming out of retirement (9%) or refinancing their home (7%) if necessary to help their kids.
However, parental largesse may have limits. About 73% of parents say they plan to end financial support of their adult children in four years or less.
On the other hand, 18% of parents say they plan to continue such financial support indefinitely.
If you’re looking for ways to help your children without dooming your own pocketbook, check out “6 Ways to Help Adult Children Without Going Broke.”