The retirement savings you expect to have at the conclusion of your career can be greatly depleted by needy adult children. Yet 59% of parents today have provided financial support for adult children who are no longer in school. Take a look at the following ways these parents are helping:
- 50 percent are providing a place to live
- 48 percent are helping with living expenses
- 41 percent are helping with transportation
- 35 percent are helping with health insurance
- 29 percent are providing spending money
- 28 percent are helping with medical expenses
- 19 percent are providing emergency money
- 16 percent are assisting with loan repayment
- 10 percent are helping pay down credit card debt
If left undiscussed, this problem can reach dangerous territory for your wellbeing in retirement. For the good of both parties, take a look at the following advice discussed by Jill Schlesinger:
Draw up a plan of action:
- Make sure that your children understand the need for financial independence. Even those who have graduated college and work full time may be using their parents’ savings as a second source of money. Sit down and discuss specific details, such as a six-month timeline, for when you expect them to move out and support themselves.
Differentiate between emergencies and non-emergencies:
- Sudden job loss or medical emergencies are obvious instances when parents should feel willing and able to lend support to their children. However, children may try to redefine “emergency” to include not having the funds to join their friends on a weekend trip to Florida. Make it known that the support you are willing to give has boundaries, and anything outside those boundaries is going to require the child’s personal income and savings.
For parents with lower income, beware:
- According to a new survey, 59 percent of parents are providing financial support to their children after completing their education. Half of these families are hurting their own retirement cushion in the process. But by shrinking your assets, you are hurting your child in the long run, as they will be the ones left supporting you down the road. Make it clear if your financial stability is in jeopardy, so they understand the vital need for creating their own source of income.
This may be a difficult subject to breach, but both parties will be better off in the long run. You are not doing your kid any favors by not creating a self-sustaining independent child. Have a talk, make a game plan, and ensure you and your children are on the path to a successful future.
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