Financially Supporting Your Adult Children? Don't Let It Jeopardize Your Retirement
Parents need to learn to set expectations and limits ... for their children and for themselves.


Would you delay your retirement to help pay for your child’s college education? Surprisingly, 1 in 3 parents say they have or would be willing to do so, according to a recent study from Ameriprise Financial.
What’s more, these days many moms and dads are continuing to assist their children with expenses beyond college — footing the bill for everything from weddings to cars and first home purchases.
Such generosity, though well intentioned, could jeopardize parents’ future financial security if it comes at the expense of saving for their own retirement and other critical goals. And it could create a cycle of future financial headaches for the whole family. If parents run out of money later in life because they overspent on their adult children during their working years, they could be left in the undesirable position of relying on those same children for financial support. This burden could fall on adult children at a time when they need to focus on saving for their own retirement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To avoid these unintended consequences, it’s important for parents to strike the right balance between assisting their grown kids financially and saving for retirement. Here are some tips to consider:
Foster financial independence
Teach children the concept of earning, budgeting and investing as early as possible. This may be done by giving them an allowance when they are younger or encouraging them to get a job when they are older. Teach them the important financial lesson of appropriately managing the money they earn, and consider allowing them to make small-scale mistakes along the way to help them learn. Instilling good financial habits in your children can set a positive foundation for their relationship with money in adulthood — and lessen the odds of them having to rely on “The Bank of Mom and Dad” as they grow up.
Have a plan
If providing financial assistance to your adult children is a priority for you, incorporate it into your planning process. Treat the support you expect to provide as a goal, just like retirement. Determine what is a manageable amount to give your children, and set aside money for that specific goal alongside your other priorities. Don’t be afraid to set a limit on how much you are willing and reasonably able to give.
Encourage them to play a role in college funding
Remember that your kids have options when it comes to funding their college costs. They can use their own earnings, apply for scholarships or grants and, if necessary, borrow to meet the costs of a college education. In retirement, those choices aren’t available to support you. Even if you plan to fund college costs, it can be beneficial for your children to have “skin in the game.” Set up a plan that includes contributions from your children, and when they are in their early to mid-teenage years let them know what you expect them to contribute.
Set clear expectations
Communicate with your children how much financial support you plan to give them, if any, during their adulthood. Let them know if any money you give is a gift or a loan, and how long you are willing to help. Don’t be afraid to say “no” if you’re not in a position to help your grown kids financially. Consider other ways you may be able to help them. For example, providing non-financial support, like periodically caring for grandchildren, can be very valuable.
As a parent, it’s natural to want to help your children financially, but be careful not to do it at the expense of securing your own retirement. Prioritize your future and keep it front-and-center. Doing so can help you keep your retirement plans on track, while helping your children build financial independence — a priceless gift to give them.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Marcy Keckler is the Senior Vice President, Financial Advice Strategy and Marketing at Ameriprise Financial. She leads the overall strategy for financial advice at the firm, including the Ameriprise Client Experience and Confident Retirement programs. Marcy has been with Ameriprise Financial (formerly American Express Financial Advisors) for more than 25 years in a variety of positions in financial planning, marketing and interactive development.
-
Dow Hits New Intraday High on Fed Day: Stock Market Today
Not even the most important stock in the world could keep the oldest equity index down on a significant day for markets.
-
Savings Goal Calculator
Tools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Gray Divorce Can Throw Your Retirement a Curveball: What to Know
If you're entering retirement and going through a divorce at the same time, you've got some work to do to shore up your long-term financial security.
-
I'm a Real Estate Investing Expert: Optional 721 UPREIT DSTs Can Be the Best of Both Worlds
Before investing in any 721 UPREIT exchange, look for one that offers a straightforward, investor-friendly exit.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client Reviews
Financial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop Investments
Truck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams Now
Beyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.