Early in 2024, Lucy's daughter lost her job and moved back in with her parents in Sherman Oaks, California. This added $1,500 for food, $700 for transportation, $400 for the daughter's cat's care, and other miscellaneous expenses to the couple's monthly budget.
These extra costs forced them to cancel their travel plans this year. Lucy's husband is considering postponing his retirement so their daughter can remain on his company's health insurance plan, which currently costs $600 per month. If he retires, their daughter would have to purchase her own, significantly more expensive, health insurance.
"I wish I didn't have to support my adult child," Lucy said.
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Illustrative photo: Yahoo Life |
Lucy's situation is not unique and reflects a growing trend in the US. Young adults are increasingly struggling to establish independent lives, relying on their parents for support. This, in turn, prevents older Americans from retiring.
A May survey by financial services company Thrivent found that almost 40% of American parents said supporting their adult children impacted their savings plans. Similarly, a Qualtrics survey revealed that 32% of American parents provide financial support to their children over 18. 27% of those parents have delayed retirement due to this financial strain. Furthermore, 34% have taken on debt to lessen the burden on their children.
An annual study by personal finance website Savings.com showed that 50% of parents with grown children still provide regular financial assistance, averaging nearly $1,500 per month.
Robert, 62, a bank manager, and Susan, 60, a part-time accountant, face similar financial pressures supporting their two adult children. Their daughter, Emily, 26, recently earned a master's degree in marketing but only works part-time. Their son, Michael, 30, freelances after being laid off from a tech job. Neither can afford Chicago's average rent of $2,000 for a one-bedroom apartment, so they live with their parents.
Robert and Susan spend $4,000 each month supporting their children: $1,800 for food and housing, $900 for their health insurance through Robert's employer, and $1,300 for other expenses like student loan repayments, car insurance, gas, phone bills, and personal spending. The couple has canceled vacations and postponed retirement to ensure their children's financial stability.
American culture emphasizes independence, with young adults typically leaving home early to establish themselves. However, many parents like Robert and Susan find themselves providing financial support due to economic hardship and a challenging job market. This trend is increasingly common amid rising inflation and living costs.
Kim Muench, a parenting coach specializing in young adults, counsels parents struggling with the financial strain of adult children living at home. She notes that many parents hesitate to prioritize their own needs due to increased expenses supporting their children. When this situation persists, they worry about supporting their children indefinitely. Muench advises parents to maintain open communication and establish financial boundaries with their children.
"Persistence is key because it won't be resolved in the first conversation," she said. Both parents and children need emotional maturity to cooperate effectively.
Ngoc Ngan (Wall Street Journal, The Independent)
