How Long Should Parents Continue Supporting Their Adult Children?

When is it time to cut the umbilical cord? Experts offer their perspectives on parenting adult children.

Human beings are known for being one of the slowest creatures to reach maturity on Earth. Yet in the U.S., growing up is moving at a glacial pace as American kids leave the nest later and later.  

Census data shows roughly half of all young Americans (aged 18 to 29) are still living at home with their folks, the highest level in over eight decades.  

Being spared the renter’s burden well into their adulthood could help them get a head start on their investing journey. Yet this doesn’t mean these young adults are putting those extra pennies into their portfolios. 

Cashed-up kids are actually helping to fuel a boom in luxury shopping on both sides of the Atlantic, according to a recent Morgan Stanley report. This can be seen across a range of premium items, with the U.S. overtaking China in sales of luxury Swiss watches last year. 

Such extravagant spending at a young age raises questions over whether more tough love is needed. Famed debt-busting guru Dave Ramsey recently railed against the trend, warning young spenders on his show that “you cannot avoid life, it’s coming for your butt. Momma can’t protect you.”

Yet what if parents feel like being protective? Children’s spending is only one half of the equation. New research sheds light on parents’ conflicted attitudes toward supporting their adult kids. At the start of September last year, Edelman surveyed over 2,000 Americans aged 30 and above, including roughly 1,000 “affluent” respondents aged 45-70, with household assets between $500,000 to $3 million. 

Overall, 40% of parents interviewed still support their adult children (though that rate was 50% for affluent parents). General costs, cell phone bills, and special purchases are the most common cover for their kids. 

Expectations around financial aid seem to be passed down through the generations. Those who got financial support from their parents as adults were almost three times as likely to do the same with their kids.

The results also show that, although finances have become in vogue, many affluent American parents struggle to practice what they preached, sending decidedly mixed signals to their offspring. 

Although a whopping 93% of affluent parents claimed to encourage their children to be financially independent, half of those respondents (50%) are actually financially supporting their kids.

This article will consider opposing viewpoints from financial advisors on the subject and look at the various ways parents can support their adult children to get on their financial feet and make their way forward.    

Cut, Don’t Run

Parents who’ve supported their children for so long may find it hard to say no and turn off the tap. For those who find it hard to deny their children, some advisors recommend parents shift their perspective and view withholding cash from their kids as generosity. 

“Consider taking the next step and removing the financial support,” says Jonathan Bird, CFP and financial advisor at Farnam Financial. “It’s painful in the short term but if you’ve given your child the tools and resources they need to be financially independent, letting them be financially independent is the best gift you can offer.”

“If we’re being honest, preaching financial independence while providing non-essential financial support is hypocritical,” he adds. 

Others remind them the discomfort of going it alone can help build character as kids mature. 

“My advice to clients who have adult children is… don’t enable your kids!” says Kevin Lao, Lead Financial Planner of Imagine Financial Security. “Here I am in my mid-30s giving seniors parenting advice who have children my age! But the reality is I’ve seen the impact of enabling and how detrimental it can be to that adult child’s development.”  

“Struggling a little bit financially is healthy, it helps us grow. And if you never allow your adult children to struggle, they will never grow into the potential they have,” he adds. 

Everything in Moderation 

Although indulging children can be wasteful, some advisors say that it can be positive, provided it is guided and moderated. 

“If clients are in a good financial situation, meaning they can afford to help their kids without it impacting their financial health, and they value helping their kids I am all for it,” Mike Hunsberger, CFP and Owner of Next Mission Financial Planning. 

“As an example would be clients who want to spend more time with their kids and grandkids who pay for a vacation for the whole family. I think that is a great use of their money.”

Others see that many baby boomer parents realize the next generation hasn’t had it as good as they did.

“I think many parents see that millennials haven’t had the same opportunities they had, so supporting them makes sense – especially when inflation is so high! “says Richard J Archer, CFA, CFP and President of Archer Investment Management. “Additionally, providing ongoing support can be a way for empty nesters to maintain contact with children who’ve moved away.” 

One Last Handout?

Parents who feel uneasy about withdrawing financial support should remember that their children will eventually get a payout when they pass away in the form of an inheritance. Depending on the circumstances, advisors generally suggest leaving the discussion of that until later in their adult child’s life. 

“Generally, I don’t recommend discussing inheritance with younger adults who have yet to establish themselves and run under their own power,” said Archer. “It can short-circuit their motivation. Older adults with children, upcoming college costs, and the financial inability to visit aging parents can significantly benefit from gifting and some early inheritance.”

It can be daunting for parents to make a change. There is no one-size-fits-all solution to this, and situations will vary depending on their economic background, lifestyle, family values, and the child’s financial behavior. In any case, have open and honest conversations with your children about how to support themselves and set them on the right path toward achieving financial independence and living their best life. 

Find a Financial Advisor

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This article originally appeared on Wealthtender. To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers.

Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.

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About the Author

Liam Gibson is a Taiwan-based freelance journalist who covers tech, geopolitics, and finance. He has written for Al Jazeera, Nikkei Asia Review, South China Morning Post, Straits Times, National Interest, and has appeared in Fortune Magazine, and several other international media outlets.