13 Reasons People Are Risking Their Retirement for Their Adult Children

As living costs rise, many young Americans are financially struggling and turning to their parents for help. Over 60% of parents with adult children are using their own savings or retirement funds to support their kids. This includes 69% of Gen X parents (ages 44-59) and 56% of baby boomer parents (ages 60–78).

Parents are helping by paying bills, providing money for big purchases, or offering rent-free housing. Nearly half of adults aged 23 or older receiving parental support get help with housing costs.

A list of 13 reasons People Are Risking Their Retirement for Their Adult Children

The “Sandwich Generation” Dilemma

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The “sandwich generation” struggles financially since they must support their parents as well as their adult children. The costs of eldercare and helping children with school or housing leave little retirement funds. Balancing these two tasks affects long-term financial security.


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Social media often shows only the best parts of people’s lives, making it look like everyone else is living luxuriously. This can make parents feel like they need to do the same for their kids, leading to overspending and risking their own financial security. Things that seem like wealth online might hide financial struggles. It’s important to remember that appearances can be deceiving and not to base spending decisions on social media.

Unforeseen Circumstances

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Life can be unpredictable, with job losses, medical emergencies, and divorces disrupting financial plans. Parents may feel the need to help adult children financially, even at the cost of their retirement savings. Consider alternatives like government assistance, financial counseling, or budgeting. Communicate openly with your children about the consequences, and encourage them to manage their own finances responsibly.

Empty Nest Syndrome

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When their children leave home, parents may experience sadness and a sense of purposelessness, described as “empty nest syndrome.” To keep connected, some parents provide financial help, such as paying rent. This can make parents feel needed but can also lead children to rely on this support, delaying their financial independence.

The Entitlement Mentality

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Some grown-up children believe their parents should always give them money, even when they can support themselves. This entitlement originates from early luxury and a lack of financial knowledge. This mindset strains parents’ finances, leading them to sacrifice retirement savings. Parents must recognize entitlement signs and set clear boundaries. Encouraging children to take responsibility for their choices helps break this cycle.

The Fear of Outliving Their Savings

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It is essential for parents to plan for their financial future and healthcare requirements. Relying only on their children for assistance might be problematic since the children may have their own issues that restrict their capacity to help. Parents should prioritize retirement savings, sensible investments, and long-term care insurance. This guarantees they are financially prepared for the future without relying on their children.

The “Golden Child” Syndrome

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In some families, there’s a tendency to favor one child, often called the “golden child,” giving them more attention, gifts, and financial support. This unequal treatment can create resentment among siblings and perpetuate dependency on the favored child. Parents should strive for fairness and equity in their financial support of all their children to avoid straining family dynamics and promote healthy independence.

A lack of Financial History

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Financial literacy, or understanding how to manage money, is critical. Many parents lack financial literacy, which results in unwise judgments. They may underestimate retirement expenditures, overestimate their capacity to catch up later, or neglect inflation’s influence on savings. This can lead to a false sense of security among parents, who believe they can provide for their children perpetually. However, the long-term consequences might affect financial security in retirement.

Emotional Manipulation

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Sometimes, adults might try to make their parents feel guilty or scared to get money from them. They might exaggerate their problems or promise things they won’t really do. Parents might fall for these tricks. Setting clear rules, expecting a lot from their kids, and getting advice can help parents handle these tough situations and keep their money safe.

Guilt Factor

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Many parents feel guilty for not providing enough for their children and spend their retirement savings to compensate. However, this can create dependence. It’s important to distinguish between genuine need and enabling reliance, as overcompensating out of guilt can prevent children from becoming independent and managing on their own.

Boomerang Generation

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Young adults find it harder to achieve financial independence due to high housing costs, large college loans, and a competitive job market. This has led to the “boomerang generation,” where they return to live with their parents. This situation can financially strain parents who cover their children’s expenses. Parents should set clear expectations, create a budget, and require contributions to household expenses. This method helps young individuals recover their sense of direction while also preventing parents from experiencing financial issues.

Family Businesses are Failing

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Many small business owners rely on their family business as their retirement plan, but this can be risky. If the business fails, retirement savings could be lost. Some people prioritize helping their adult children or investing more in the business over saving for retirement, which is not advisable. It’s essential to prioritize retirement savings and seek expert advice if needed.

Financial Abuse

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Elder financial abuse, which affects those aged 65 and up, happens when someone abuses their money or property without their permission. This exploitation can take many forms, such as stealing dollars or goods or tricking someone into signing away assets.

According to Allianz Life Insurance Company research, more than half of the victims of financial abuse identified the violator as someone they knew, such as a family member, friend, or caregiver. Around one-fifth blamed the abuse on a stranger. These estimates may be higher since many families may be unwilling to accept their relative’s involvement in such crimes.

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