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February 22, 2024

More Parents Financially Supporting Their Adult Children

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Feb 6, 2024

A growing number of American parents are providing significant financial support to their adult children, often dipping into retirement savings to do so. This support is enabling more young adults to pursue education, training, and life experiences, but may compromise the financial security of their parents.

Surveys Show Widespread Parental Support

Several recent surveys have quantified the extent of financial support provided by parents to their adult children:

  • A Yahoo Finance article cites a Bank of America report finding that 57% of parents provide some financial support to adult children over the age of 18. 13% spend over $500 per month.
  • An AOL article references a Country Financial survey in which 22 was the average age at which young adults achieved full financial independence.
  • A Florida Daily article notes that 25% of young adults rely entirely on their parents for housing and living expenses.

This support can take many forms including:

  • Paying for college tuition
  • Providing an allowance or spending money
  • Paying cell phone bills, auto insurance, etc.
  • Allowing young adults to live at home rent-free

For many parents, supporting adult children has become an accepted, even expected, part of parenting. But this support comes at a real financial cost.

Impacts on Parents’ Finances

While parents may be willing to support their children, a MoneyWise article found that 58% felt their own financial stability was suffering as a result. Specific impacts noted include:

  • Reduced retirement savings
  • Taking on debt
  • Delaying major purchases
  • Increased stress

A Forbes article warns that many parents are now less financially secure than they might have expected to be at their age, making them ill-prepared for retirement.

Type of Support Percent Providing
College Tuition 43%
Car Payment 40%
Cell Phone 40%
Credit Cards 32%

And the financial requests keep coming. A USA Today article offers advice on how adult children can best approach their parents for money without damaging the relationship.

Lasting Dependence

For some young adults, parental support extends well into their 20s and 30s. A Forbes article references a Merrill Lynch study finding that:

  • 21% of young adults ages 23-28 rely on parent contributions for over half their income
  • 15% of 30-somethings get at least some financial assistance from parents

Prolonged financial dependence can stunt maturity and prevent young people from developing important life skills.

But many parents enable this dependence because they enjoy feeling needed or worry their children will struggle on their own. Letting go can be difficult as explained in this WGN Radio segment.

The Road Ahead

While supporting adult children financially may feel natural for loving parents, it is important to strike the right balance. Parents should focus first on their own retirement savings before assisting children. And young adults should work towards achieving financial independence rather than relying indefinitely on parental support.

Ongoing generational transfers may boost opportunities for young people today, but could leave their parents financially fragile in retirement. A Christian Post article stresses the need for young adults to break free and stand on their own.

The long-term impacts remain to be seen, but some experts predict today’s young people may face more challenging financial futures than their parents despite this additional support. Achieving financial independence must remain the goal.

AiBot

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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