I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance

Question: I want to retire, but I have to keep working so my adult kids have insurance. What are my options?

Answer: You may reach a point when you’re ready to retire and embrace that next phase of life. And if you’re confident in the amount of savings you have, there shouldn’t be much stopping you.

But what if you have adult kids who rely on you for health insurance?

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It's a common scenario. The Kaiser Family Foundation found that as of October 2024, 72% of young adults aged 18 to 25 were covered as dependents on a family member's health insurance plan.

Meanwhile, in 2020, the U.S. Census Bureau reported that Americans ages 19 to 34 had the highest uninsured rate of any age group in the U.S. Moreover, 26-year-olds specifically had the highest uninsured rate in the nation.

There’s a very easy explanation for that. The Affordable Care Act allows children to remain on their parents’ health plans until age 26. And while some states allow children to stay on a parent’s health plan until age 30, depending on circumstances, that’s not guaranteed to be an option.

If you have young adult children under 26 who are on your current health insurance plan, you may feel compelled to delay your retirement so they can keep that coverage a bit longer. But that’s not necessarily fair to you. It’s important to strike a balance between helping your kids retain insurance coverage and pursuing your own dreams after a lifetime of hard work.

A potentially slippery slope

It’s noble to want to provide health coverage for your young adult kids. But Adam Spiegelman, CFP and Wealth Advisor at Spiegelman Wealth Management, says there’s a danger in doing so. What starts out as working longer to set your grown kids up with health insurance could evolve into many years of extending financial support rather than focusing on your own needs and encouraging your children to become more financially independent.

In situations like these, he says, “Support tends to expand and never really end – phones, tuition, weddings, even mortgages.”

In Spiegelman’s experience, what starts out as financial support for grown children who are new to the workforce often evolves into supporting children well into their 40s or 50s.

“That may not be healthy for anyone,” he insists.

A recent Savings.com report finds that half of parents with adult children provide regular financial support. The average amount of support given? A whopping $1,474 per month.

This isn’t to say that working a couple of extra years to allow your grown children to stay on your health insurance plan will result in having to support them for decades. But before pushing yourself to plug away at a job for longer than you’re interested in, Spiegelman suggests hitting pause so you can thoroughly evaluate your goals.

“Are you continuing to work purely to provide health insurance, or does staying employed serve other purposes for your retirement readiness or family dynamic?” Spiegelman says.

If there’s a benefit to you in extending your career, like boosting savings or being able to delay Social Security benefits, then that may be a reason to do it. Otherwise, Spiegelman says, “First, plan your own retirement. Maybe even be a little ‘selfish’ there.”

Other paths toward health coverage

Another reason not to automatically delay your retirement for the express purpose of hooking your grown kids up with health insurance? There may be another path toward coverage.

“For many 20-somethings, lower-cost HMOs can be very affordable and sometimes better than staying on a parent plan,” Spiegelman explains.

Depending on their income, your children may qualify for an ACA plan subsidy, making it more manageable. (Note, however, that Congress is divided over whether these subsidies should be extended in 2026, which could more than double ACA premiums.) Or even without a subsidy, they may find that they can swing the cost of a bronze plan, which is the lowest tier available for ACA plans.

Bronze plans typically come with low premiums but higher out-of-pocket costs. They can be suitable for young, healthy enrollees who expect to use their insurance minimally and mostly need protection from catastrophic or emergency care.

Medicaid may also be an option, depending on your children’s income.

Michael LaCivita, CFP at Domain Money, says that if your grown children don’t qualify for Medicaid and can’t afford health insurance premiums on their own, there’s another way to help.

“You may not have to change your retirement date to help your kids with healthcare coverage,” he says. “If your budget allows it, one option is to give your child the premium you pay as an employee to keep them on the health insurance plan. Your children can use this toward their individual coverage. It may not cover all of the premium your child or children may pay to have their own health insurance policy, but it helps.”

It’s okay to put your own needs first

Even if you can’t afford to help your grown kids cover the cost of health insurance, if you’re ready to retire and have saved well to reach that point, then it’s not fair to you to delay your own plans. In fact, being kicked off of your health plan could be the push your children need to find jobs that provide employer-subsidized insurance, or rethink their spending in a manner that makes an ACA plan more affordable.

This isn’t to say that you shouldn’t do it nicely. Aim to give your kids a few months of notice so they can start crunching numbers and preparing.

But as Spiegelman says, “Protect your own mental health, lifestyle, and retirement goals first — because time is finite.”

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