Americans often blame factors such as the Great Recession or the lack of a traditional pension for their anemic retirement savings. But there’s another possible contributing factor that hits a lot closer to home: financially supporting a grown child or a parent.
Thirty-two percent — or about one-third — of U.S. investors provide financial assistance to an adult child, a parent or both, according to new figures from Gallup and Wells Fargo. These investors include both people who are still working and folks who are retired.
Breaking down that 32 percent, the Wells Fargo/Gallup Investor and Retirement Optimism Index survey for the first quarter of 2017 found that, among U.S. investors:
- 24 percent give financial help to at least one adult child
- 6 percent give financial help to a parent
- 2 percent give financial help to an adult child and a parent
For the survey, a little more than 1,000 investors from across the U.S. were polled. “Investors” was defined as “adults living in households with $10,000 or more in stocks, bonds or mutual funds, in an investment account or in a self-directed IRA or 401(k) retirement account.”
Investors were not asked about the type of financial support they were providing, and Gallup notes it could include college expenses for adult children.
But whatever type of financial support they’re providing, most investors who aided adult family members said it hinders their retirement savings by:
- A little (33 percent)
- A moderate amount (17 percent)
- A lot (11 percent)
Putting yourself first
“Putting yourself first” is a common refrain around here at Money Talks News because there’s no way around it: If your retirement is in jeopardy and you’re financially helping family members — adult children tend to be the most common culprit — you must find ways to trim or even eliminate those financial ties.
Emancipating adult children is step No. 4 in “Ready to Rescue Your Retirement in 2017? Here’s How,” which begins:
“Sit down with grown children and tell them what you are facing. It’s a tough conversation. But laying your financial cards on the table gives them information they may need to plan their lives.”
For more guidance, check out “5 Tips for Helping Boomerang Kids Without Bankrupting Yourself.”
And in case this news makes it any easier for you, know that even millennials themselves now admit they should be paying their own way through life by age 22.
Can you relate to the 32 percent of U.S. investors who are financially supporting a grown child or a parent? Share your experience below or on our Facebook page.