The Real Cost of Funding Adult Children: Postponing Retirement

Aged mother arguing with her adult son at home

(Image credit: Getty Images)

We love our kids. But when is supporting them financially a good thing, and when is it, well, not so good? Nearly half of U.S. parents are helping their adult kids financially — and most say it's hurting their wallet.

In fact, the percentage of parents supporting their adult children hit a three-year high of 50% in 2025, according to Savings' fourth annual survey this past February. This marks an increase from 47% in 2024 and 45% in 2023, which might be driven by increased aid to Gen Z adults, who receive an average of $1,813 per month, compared to $863 for Millennials. Overall, the survey showed that most of the money covered essentials like groceries, rent and utilities.

The survey also pointed out that parents, with a median age of 56 and income of $50,000 to $74,999 on average, contribute about 2.3 times more to their kids than to their own retirement savings..

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Another 2024 survey, conducted by Intuit Credit Karma, highlights that 76% of parents who financially support their adult children report a negative impact on their own finances, and another 60% say the support causes mental stress.

And while many surveyed parents make sacrifices in order to support their grown children, including 52% cutting back on living expenses, 27% postponing retirement and 39% struggling to afford necessities like bills and groceries, some question if there is an expiration date on helping kids financially.

Should parents pay for their adult children?

Reasons why parents pay for their adult children vary, but according to the Credit Karma study, some parents may help their grown children out of a sense of obligation (50%), due to the high cost of living (42%), an unfriendly job market (33%), and rising rent prices (23%).

“Achieving financial independence as a young adult can be challenging, especially as they face high housing and education costs,” said Courtney Alev, consumer financial advocate at Credit Karma. “There’s nothing wrong with providing financial support to your adult children, but if it begins to have a negative impact on your own finances, it is probably time to set some guardrails.”

Set boundaries

As a parent, it's important to also understand your limits. Make sure you can afford to help your kids financially and that doing so won’t break the bank or set you up for financial hardship in the future. Set boundaries and be willing to say no.

“In addition to clearly communicating any expectations tied to the financial assistance you’re providing, make sure you’re assessing your own financial situation to ensure you’re not negatively impacting your financial goals, such as pulling from your retirement savings.”

Having healthy boundaries can teach children self-control and give them a sense of self-esteem. Besides, providing financial support without setting limits could keep your adult child from becoming financially independent later on.

Financial tips to help adult children

Network on their behalf: Sometimes getting a foot in the door requires who you know more than what you know. If you have contacts in a field where your child has training, it could help them get their foot in the door of a career. Or help them find career development courses or certifications so they can learn a new skill.
Don't Give Cash: Instead, match their savings. Match 50% of what they save toward a goal, like a car down payment. This builds good habits while limiting your outlay to $100 to $200 per month max.
Work with them on budgeting: Have them use this budget worksheet to see where their money goes. Having a fresh perspective can help you both set spending and savings goals.
Use rewards credit cards: Try putting your adult child's groceries or gas on your rewards credit card, then let them reimburse you monthly. Bonus: you pocket the rewards and they learn budgeting.
Create a family loan: To teach adult children about loans, try lending your adult child $1,000 at 0% interest, repayable in 12 months ($83/month). Use a simple written agreement, which gets your money back and teaches responsibility.
Anticipate emergencies: With more parents helping out their kids financially, you might want to get ahead of it, if you can. Open a high-yield savings account, where you can make smaller deposits now that build over time. You won't have to devote much of your financial resources if you start early, and that money is earmarked for any emergencies or needs that arise.

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.