Ep. 149 - 47% of Parents Still Paying Adult Children’s Bills?

Apr 01, 2024

In recent years, a concerning trend has emerged: parents are increasingly sacrificing their own financial security and retirement savings to support their adult children. This phenomenon, highlighted in a recent study conducted by, sheds light on the complex economic challenges faced by families across multiple generations.


The study, which surveyed 1,000 parents with a median age of 57 and a median household income between $50,000 and $75,000, reveals a startling reality. Many parents are putting their own financial future at risk to help their adult children navigate a challenging economic landscape, often characterized by high housing costs, student loan debt, and healthcare expenses.


The Extent of Financial Support

According to the study, a staggering 47% of parents are providing financial support to their adult children who live with them. Even more concerning is that 61% of these adult children do not contribute to rent or household expenses. This means that nearly half of the surveyed parents are bearing the full financial burden of housing their adult children, often at the expense of their own savings and retirement plans.


The average monthly financial support provided by parents to their adult children is substantial, amounting to $1,515 for Generation Z (ages 18-27), $907 for Millennials (ages 28-44), and $960 for Generation X (ages 45-59). When aggregated, this support totals an average of $17,000 in net income per year, a significant sum that could otherwise be invested in the parents' retirement accounts or used to secure their financial future.


The Impact on Retirement and the Economy

The long-term consequences of this financial support are alarming, both for individual families and the broader economy. By diverting funds away from their own retirement savings, parents are jeopardizing their ability to maintain financial stability in their golden years. This trend could lead to a greater reliance on social security and other government assistance programs, placing additional strain on an already overburdened system.


Additionally, the inability of parents to adequately save for retirement could have ripple effects throughout the economy. As a larger portion of the population reaches retirement age without sufficient savings, consumer spending may decrease, and the demand for social services may increase. This, in turn, could lead to slower economic growth and a reduced standard of living for future generations.


Factors Contributing to the Trend

Several key factors have contributed to this alarming trend of parents sacrificing their retirement to support adult children. One of the most significant is the rising cost of housing, which has made it increasingly difficult for young adults to afford rent or purchase homes. In fact, the study found that the majority of financial support provided by parents goes towards housing expenses, with 60% of Generation Z, 53% of Millennials, and 56% of Generation X receiving assistance for rent or mortgage payments.


Another factor is the burden of student loan debt, which has reached record highs in recent years. As young adults struggle to repay their loans while also covering living expenses, many have turned to their parents for financial support. Additionally, the high cost of healthcare and the prevalence of job instability have further compounded the financial challenges faced by adult children, leading to an increased reliance on parental assistance.


The Bottom Line

The trend of parents sacrificing their retirement savings to support adult children is a concerning development with far-reaching implications for families and the economy as a whole. While the desire to help one's children is understandable, it is crucial for parents to strike a balance between providing support and ensuring their own financial security.


Ultimately, the key to breaking this concerning cycle lies in striking a delicate balance between providing support and encouraging financial independence. By working together and making informed decisions, families can navigate these challenges and secure a brighter financial future for both parents and their adult children.