supporting adult children

Don’t let financial support for an adult child undermine your financial security

Any experienced parent will tell you that you’re never done “raising” your kids.

Moms and dads are predisposed to prioritize their child’s needs over their own, and research shows that this behavior doesn’t stop at age 18. According to Pew Research, six in 10 parents help their adult children financially, on either a recurring or one-time basis.1 While a few hundred dollars semi-regularly might not seem like a big deal right now, keep in mind that when you are providing this support is just as important as how much you are giving.

Many parents of adult children are pre-retirees or retirees, and with one in four 65-year-old Americans predicted to surpass age 90, Americans’ retirement savings need to last longer than ever before.2 According to data from the Voya Retire Ready Index, six in 10 working adults surveyed said that they are extremely or very concerned about outliving their savings.3

For these reasons, before following your instinct to subsidize your adult child’s lifestyle, it’s important to ask yourself:

  1. What are the potential retirement savings that I might be forfeiting? Some financial experts estimate that a parent’s retirement savings could be more than $200,000 higher if they choose to save the money that would otherwise go to their child’s living expenses and big-ticket costs like college tuition.4 Ask yourself: Am I taking advantage of my employer-sponsored 401(k) or investing in an IRA? Do my financial plans include savings for health care expenses in retirement, such as a Health Savings Account (HSA)?
  2. Are my family and I protected from greater unforeseen financial challenges? Forgoing sufficient life, critical illness or disability income insurance could lead to greater financial challenges for both you and your family, including your adult child. Additionally, you should encourage your adult child to consider these types of coverage. That way, you are both protected from unforeseen expenses, and you are also helping your child become financially independent.
  3. Would a financial advisor agree with my decision? Sitting down with a financial professional can help you decide if, and to what extent, you can afford to help your adult child financially — based on your current budget and long-term savings goals. Doing this early on may afford you the opportunity to better prepare for these costs, such as investing in a 529 plan.

While younger adults may still be in a position to take advantage of the most lucrative stage of their retirement planning lives, their parents who are nearing retirement have a shorter savings window. Failing to save and put safeguards in place to protect your own financial security could result in your child supporting you in retirement. In fact, research shows that one in five middle-aged adults (21%) have provided financial support to a parent age 65 or older.5 No matter how and what you save, the longer that the money is invested, the more it has the potential to grow.

The end goal is long-term financial security for both you and your adult child.

Whether or not you are able to provide monetary support, financial education is a valuable tool you can provide. By teaching your child to start planning for their own future, they may be less likely to need assistance down the road. Taking time to discuss topics, such as the importance of establishing a budget and living within one’s means, can be even more valuable than providing monetary support. This includes making sure that when your child lands their first job, they are contributing to an employee-sponsored plan or IRA and have an emergency fund.

The earlier you start talking with your child about financial independence, the better. These conversations can start early in life by teaching them to save a portion of their allowance or encouraging a high-schooler to save part of what they earn at a summer job. You might also set up an independence fund when they’re in college to set the expectation of financial independence upon graduation or shortly thereafter. But it’s never too late — those conversations can also start later in life through, for instance, the gift of a financial plan with your preferred financial advisor.

Some considerations if you are providing financial support to your adult child:

  1. Have a clear understanding of finances and retirement savings goals. Before engaging in a conversation about what kind of support you’re able and willing to provide, you need a clear understanding of your retirement savings goals, income and assets, and whether you can meet those goals while also providing monetary support to your adult child.
  2. Be transparent and honest. You must be direct about what you can do – and for how long. Clarity from the beginning can reduce the likelihood of overextending yourself and potential negative impacts on your retirement readiness.
  3. Bring a third party into the equation. This provides objectivity. It also gives your adult child the opportunity to reflect on whether or not he or she wants to put you in a potentially uncomfortable financial position.
  4. Put it in writing. This is essential. It will help both you and your adult child keep track of the agreed-upon timelines and provisions that should come with financial support.
  5. Check in. Checking in regularly will enable you to reevaluate what level of financial support you can offer, for example, in the case of a medical emergency or in the event that, despite your adult child’s best efforts, he or she cannot fulfill their end of the bargain. If working with a financial advisor, make them aware of any potential changes to the plan to understand how those choices could impact your retirement goals.

Learn more from Voya's recent whitepaper, How Financial Support for an Adult Child Can Undermine a Parent’s Financial Security.

This information is provided by Voya for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/insurance decision. Products and services offered through the Voya® family of companies.

1Pew Research (2015), available at:

2Social Security Administration (current), available at:

3Based on findings from two online consumer surveys of “Workers” and “Retirees” completed in July 2014 with Greenwald & Associates, Inc. Each index category was constructed to have a maximum possible score of 10 (responses were weighted based on factors selected by Voya, and weighting responses using alternative factors would yield different results). The three index category scores were then averaged to determine a final average score for Workers and Retirees, respectively. Index scores do not reflect any single respondent’s experience. Voya Financial Retire Ready Index (published 2015), available at:

4NerdWallet (2015), available at:

5Pew Research (2013), available at: