Dependent Adult Children
Almost half of American parents provide financial support to their children even after they’ve grown up, according to a recent survey by Savings.com. Of those children who remained financially reliant on their parents, the majority were between the age of 18 and 24, over one-third were 25 years or older, and 10% were at least 35.
While some parents provided minimal financial support, such as covering cell phone expenses or groceries, nearly half paid housing expenses averaging over $800 per month. According to the survey, these parents are spending about $1,442 per month on average on their adult kids’ expenses.
Closed businesses and shuttered schools during the pandemic compelled many young adults to return home. In fact, the last time this many adult children lived with their parents was during the Great Depression. Currently, over half of young adults between the age of 18 and 24 live with their parents — and here are a number of reasons why they may be staying in the nest.
For one, the price of higher education has skyrocketed, with fewer of those costs covered by parents than in previous generations. Also, broad-based inflation means many other costs have risen, too. This includes housing expenditures, such as rent and mortgage costs, which increased dramatically last year. These factors and more are causing many to shelter at home — still.
For the parents of grown children who have yet to reach financial independence, shouldering these expenses can derail their own financial security.
The survey found that working parents were spending far more on their adult children than they were saving for retirement. The poll also found a full 75% of these parents experienced stress about their ability to afford a comfortable retirement.
While every circumstance is different, some parents may benefit from putting on their own air mask first, so to speak, and looking for ways to re-prioritizing their retirement goals. And, for children who are still soliciting help from their parents, it’s worth thinking twice before hitting send on that Venmo (PYPL) request.
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