We're 68 With $6.8 million. I Give Our 'Kids' $1K a Month, Though They Earn a Good Living. My Husband Wants Me to Stop.

Question: We're 68-year-old retirees with $6.8 million. Our two adult kids never ask for money, but I give each of them $1,000/month to make their lives easier and to help with daycare and summer camp. My husband thinks it's silly. They earn a good living. Should I stop?

Answer: If you retired with $6.8 million, it's fair to say that you're probably in a pretty good position. Last year, 25% of retired Americans lost sleep over money worries, according to the Schroders 2025 US Retirement Survey.

But with $6.8 million saved, you probably have enough money to not only cover your own needs, but share the wealth. That could mean giving your grown kids $1,000 a month each, even if they don't need it.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

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.

Sign up

If your kids are grappling with high costs like daycare and summer camp, they can probably put the money to great use, even if they technically earn enough to swing those bills themselves. But why force them to stretch their budgets when you have money to spare?

Your husband may see things differently, though. He might think that such support for grown kids who have good incomes is mollycoddling.

The reality is that there's nothing wrong with helping your kids out financially, even if they can make it on their own. The key is to make sure you're not sacrificing your own needs along the way or sending the wrong message.

Your kids could probably use the money now more so than later

Many people with large nest eggs spend their money and leave whatever's left over to their kids. But your approach may be a better way to do things, says Tyler Qualio, JD, CFP, and managing director and partner at Rothschild Wealth Partners.

"Most adult children are unlikely to receive their inheritance [until] well into their 60s and perhaps even their 70s," he says. "Gifting during your lifetime can allow you to see your children and grandchildren enjoy the money." And, Qualio says, gifts given earlier may be more impactful.

Of course, Qualio cautions that being overly generous has its risks.

"This, in turn, brings up concerns of not demotivating your children by giving them too much too early," he says.

But if your kids are functional adults with good jobs and a solid handle on their finances, and the purpose of your monthly gifts is to allow them some breathing room, then there's nothing wrong with it. Your children are unlikely to quit their jobs or suddenly become careless with spending over $12,000 a year you send their way.

Giving incrementally makes sense from a tax perspective

You may not realize it, but giving your grown kids $1,000 a month is actually a smart move from a tax perspective, says Joseph Fresard, attorney at Simasko Law.

"As to whether you continue or stop is entirely up to you, but there is actually a possible tax advantage to gifting this way," he explains. "Currently, the federal annual gift tax exclusion is $19,000 per recipient, so these gifts you are giving do not need to be reported to the IRS."

As Fresard explains, gifts exceeding the annual exclusion reduce the lifetime exemption for estate taxes. But this isn't the case here. And, it offers some protection in case estate tax exemption rules change.

"At $6.8 million currently, it is not very likely that your estate will need to pay taxes, as currently a married couple can leave $30 million before they set in," Fresard says. "However, you never know if this number will be lower in the future. Leaving it in small increments during your lifetime can be a good way to make sure more money goes to [your children]."

Make sure your gifts don't offend

Many people with young kids would be thrilled to receive a $ 1,000-per-month gift, even if there's no urgent need for the money. But Steven Conners, founder and president of Conners Wealth Management, says it's important to ensure your money is truly well-received.

"I think it depends if they are going to get upset or angry at you for giving them $1,000 a month," he says. "If it’s not a personal issue with a son or daughter, you are essentially gifting them the $12,000 a year, and it’s allowed according to tax rules."

You may, however, want to make it clear that the money isn't a sign that you lack faith in their ability to manage their finances, but rather, that you're simply trying to help take a load off. Explaining this to your husband might help him get on board with the gifts, too, even if they technically aren't necessary.

Make sure you're not putting your retirement at risk

With $6.8 million in savings, you have far above what the average retiree has saved, and you have a lot of leeway to give generously. But Qualio cautions that you shouldn't just hand out money without thinking things through.

"The other side of the coin, of course, is making sure you and your own retirement are not compromised by over-gifting too early," he says.

Qualio says it's a good idea to assess your annual spending needs and compare that to your various income streams. You may have money coming in from sources other than retirement plan withdrawals, such as Social Security benefits, that give you even more leeway to be generous.

On the other hand, you may have certain unanticipated needs, such as home repairs or long-term care. If you decide to continue or increase your giving, make sure to keep these potential costs in mind.

Qualio says you can easily give more than what you're giving now without exceeding the annual gift tax exclusion. And you can probably increase your gifts without risking your own financial stability. But it's important to run the numbers to make sure.

Read More

• I'm Treating My Kids and Grandkids to a Greek Cruise, But My Son Can't Go. Do I Owe Him a Check to Keep Things Fair?
• We're 65 With $3.9 Million. Should We Give Our Adult Children Their Inheritance Now to Pay for Daycare and Buy a Home?
• We Retired at 70 With $4.3 Million. My Wife Won't Spend 'Our Grandkids' Inheritance,' but I Want to Travel.
• I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance