The Parent Trap - Your Kids Could Be Ruining Your Retirement

S.F. Ehrlich Associates |

March 31, 2019

It’s difficult to pass on reading an article with that title, but The Parent Trap is the title of a special report found in Barron’s. Not only was the title catchy, but the contents are very worthy of sharing.  It’s difficult to summarize an article with this type of importance, so we’ll try to capture your attention by reviewing some of the highlights.

The Bank of Mom and Dad: Parents have always helped their kids, but the assistance is continuing longer and becoming costlier:

  • More seniors are in debt: 70% of 65- to 74-year-olds hold some debt. 39% hold housing debt; more than double the number in 1992.
  • College costs are rising.
  • Boomerang millennials: A larger share of 25- to 35-year-olds are moving in with Mom and Dad than in past generations.
  • The cost of parental love: To help adult children, 50% of parents will take money from savings 43% will live less comfortably; 26% will take on debt; 25% will tap a nest egg; 19% will retire later; 14% will refinance their home; and 8% will come out of retirement.
  • Parents now spend twice as much on their adult children than what they contribute to their own retirement nest egg.
  • 68% of parents said they would be willing to delay retirement to pay for college.
  • 72% of parents say they have put their children’s interests ahead of their own need to save for retirement.
  • 79% of parents of young adults provide them with some type of financial support.
  • Student debt has become senior debt: The amount of student debt held by people age 60 and over has increased dramatically. In six states (Delaware, Maryland, Pennsylvania, Alabama, Mississippi, and Nevada), the amount has more than doubled since 2012.

How parents support adult children:

  • 60% pay for some or all food or groceries. (23% pay the full cost.)
  • 54% pay for some or all cell phone expenses. (32% pay the full cost.)
  • 47% pay for some or all car expenses. (17% pay for all.)
  • 44% pay for some or all school expenses. (22% pay in full.)
  • 44% pay for some or all vacation costs. (21% pay the total cost.)
  • 36% pay for some or all rent/mortgage. (23% pay for all.)
  • 27% pay for some or all student loans. (9% pay the total cost.)


What to do if you’re in or heading towards a financial crisis because of spending on an adult child? “For those intent on helping their adult offspring, financial advisors stress running the numbers and bringing the children into the conversation, so they see what their parents can afford, reducing the guilt some parents feel for saying no…In sum, giving to children requires good communications and firm boundaries.”




Kapadia, Reshma. “How Your Kids Can Ruin Your Retirement - And How To Make Sure They Don't.” Barron's, 22 Mar. 2019.
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