Should Your Financial Planning Include Helping With Adult Children’s Expenses?

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Most parents plan on paying for their children’s expenses up to age 18, and many also make a plan for helping with college expenses. However, according to a survey by, parents are now going beyond college and helping with expenses of their adult children, which is putting some parents’ retirement funding at risk. Financial planning today is now accounting for a category of “dependent adult children.”

The U.S. Department of Agriculture estimates that it costs approximately $233,000 to raise a child to age 18. Beyond that, half of the people in the survey said they’re sacrificing their retirement savings to help grown children with their expenses. When broken down, here is how this is affecting parents:


  • Six in 10 parents are cutting back on retirement savings
  • High earners are even more inclined to jeopardize their retirement savings
  • Three in 10 parents with a child in college or recently graduated are postponing saving for retirement

Helping pay for college tuition, room and board is only part of the spending equation that parents are investing in. Half of the parents in the survey said they’re also covering mobile phone bills and six out of 10 of them are stocking their kids’ food pantry. Almost 30% said they’re helping their children with their student loans.

What Can Parents Do?

Rather than risk putting off retirement until much later in life, it’s important to take a close look at all the expenses generated from your child’s current lifestyle and see where you can make adjustments. You might also consider setting a deadline for when the child must take over various aspects of their spending. Money that was once going to their phone bill can now go directly to your retirement savings.

Parents must consider that while they might feel compelled to assist their child if they don’t cover their financial planning obligations for their own retirement, who will? The alternative could include having your children become your caretakers, which can put a lot of tension on your family.

College Expenses

Look at helping your children take out college loans to pay for school, which frees you up to save a little more for retirement. Depending on the student loan interest rates, it could make sense to build up your retirement account and consider giving your children some assistance when the loans come due, if they need it. Plus, while students can borrow to get themselves through school, there are no such programs that will fund your retirement.

A program to consider if you want to help your kids through college is the 529 college savings plan. You can start investing in this while your kids are still young and until they graduate from high school.

For more information on financial planning – including different approaches to adult children’s expenses while saving for retirement –  contact us at Family Investment Center. We custom build strategies that get our clients on the road to financial freedom, and we can get you there, too.


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