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Don’t Let Your Adult Children Put Your Retirement At Risk


Don’t Let Your Adult Children Put Your Retirement At Risk

It is the responsibility of parents to take care of their children, mentally, physically, and financially.  But at what age is too old to be giving money to your kids?  Too often lately, we have seen clients financially support their adult children. Parents say they are giving their adult children some kind of financial support, financial support that is often detrimental to their retirement savings. In a recent study 50 percent of Americans say they have sacrificed or are sacrificing their own retirement savings in order to help their adult children financially. [1]

Parents spend twice as much supporting their children as they contribute to their own retirement accounts yearly. This is a major problem for two reasons. Not only are parents failing to teach their children debt management and financial responsibility, parents are making themselves a liability that one day their children will have to take on due to their lack of financial security.

Helping our kids financially can send them the wrong message. While some will call it enabling, the enablers will simply say they are trying to help.  Parents can sometime feel that they are helping to relieve the financial burden their child is suffering, instead they are failing to teach their children how to manage their own finances.

Of course, it can be difficult to cut off financial support to your adult children, so here is what experts advise:

  1. Give your children non-financial support instead. Instead of paying for their rent, have them move into your home until they are able to land a stable job.  Instead of paying their student loans, help them refinance to more manageable payments.
  2. Help them to make a budget. Set your children up with a spending plan, or a debt reduction plan, a better way to manage their money.  You could do this yourself or hire a financial advisor to help.
  3. Give in the right instances. It is okay to help children when they have been victims of circumstances that are beyond their control such a medical emergencies or natural disasters. Helping your child with a down payment on their first home is also okay as long as it doesn’t come with the expectation that you will be paying their mortgage, or helping with other house purchases in the future.  Doing things for your children is okay as long as you are financially secure.  But if you are constantly giving to a child that has trouble with money, you are not teaching them appropriate money management lessons.
  4. You must put yourself first. By putting yourself first you are actually doing a favor for your children. The best lessons you can teach your children are self-reliance and the security knowing they will not have to provide for you in your advanced age.  The simplest way to do this is to provide clear separation and expectations about what is their responsibility and what is yours. [2]

[1] Smith, K.A (2019, April 24). Half of Parents Financially helping their Adult Children Say Its Putting Retirement Savings At Risk. Retrieved from:

[2] Hill, C (2019 April 24) 3 in 4 older parents make this financially disastrous mistake. Retrieved from:

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