CBS News business analyst Jill Schlesinger provided financial-planning tips for parents who continue to support their adult children on a recent CBS Saturday Morning broadcast.
These guidelines aim to help parents manage the financial impact of supporting adult children in a challenging economic climate without compromising their own retirement security.
Data on the prevalence of this trend varies across surveys. One report indicates that half of parents with adult children provide regular financial assistance [1]. Another survey conducted by AARP suggests the figure is as high as 75% [4]. For those providing this aid, the average monthly amount of assistance is $1,474 [2].
Schlesinger said that parents must balance their desire to help their children with the necessity of maintaining their own financial health. The cost of funding adult children can lead some parents to postpone their own retirement [3]. To avoid this, she suggested creating clear boundaries and budgets for the support provided.
Setting a specific timeframe for assistance is one way to prevent permanent financial dependency. This approach allows the adult child to work toward independence while providing a predictable cost for the parents. Schlesinger said that transparency regarding the parents' own financial limitations is essential to avoid future conflict.
Parents are encouraged to treat the support as a structured loan, or a temporary grant, rather than an open-ended subsidy. This ensures that the parents do not deplete their primary savings or investment accounts to cover the living expenses of their children. By establishing these rules, families can maintain a supportive relationship without risking the long-term stability of the older generation.
“Half of parents with adult children provide regular financial assistance”
The divergence in data—ranging from 50% to 75% of parents providing aid—highlights a widespread shift in generational financial dynamics. As the cost of living rises, the 'bank of mom and dad' is becoming a critical safety net, but it risks creating a secondary crisis where retirees lack sufficient funds for their own healthcare and housing needs.
