... but banker? Ouch!
You are planning for your children to become self-supporting—but are they? According to a recent study by Age Wave & Merrill Lynch*, 70% of young adults received support from their parents last year, often living with their parents because of financial needs. In 2018, a different study by Bankrate.com** survey found that 51% of respondents said that they support adult children “somewhat, or a lot” from their retirement savings. Ouch!
Most people never seriously consider the idea that they may use their retirement savings to support adult children. After all, isn’t this the time you planned to relax, travel and visit your kids? However, higher levels of student debt have left many children in a position where they need help and, as a parent, you want to offer it.
It turns out that Baby Boomers are offering more financial support than any generation before them and that has both risks and rewards. How do you know if you’re in a position to help and, if so, how much help you can safely offer? What assurance do you have that your own retirement is secure? Finally, do you and your children have a strategy for success, or an endgame in mind?
Just because it’s not what you imagined doesn’t mean it can’t work, but you have to plan wisely. We have been helping clients to do this for decades.
*Source: Early Adulthood: The Pursuit of Financial Independence, April 2019
** cbsnews.com/news/adult-children-are-costing-many-parents-their-retirements/ [4/25/19]