Every parent dreams of the day their child completes their education, launches their career and becomes an independent, self-sustaining adult. For many parents and children, though, that day never arrives.

Numerous recent studies show that a large number of adult children still receive financial assistance from their parents. One study found that 40 percent of people age 18 to 32, commonly known as millennials, rely on parental financial support to maintain their lifestyle. Another study found that 56 percent of millennials receive occasional financial help.1

If you’re providing financial help to a grown child, you know the dilemma all too well. On one hand, your child may be facing real challenges, and you certainly don’t want to watch them struggle. On the other hand, you also need to maximize your savings so you can enjoy a comfortable retirement.

Cutting off your grown child isn’t easy. In fact, it could threaten your relationship with your child or even strain your relationship with your spouse. However, unless you’re well ahead on your retirement savings, that financial support could be destructive to both you and your child.

Below are a few tips to help you help your child regain their independence:


Be a united front.

In many cases, providing financial support to a grown child can be a divisive issue for spouses. One parent may want the child to develop some independence, while the other parent may feel compelled to help.

It’s important that you and your spouse are on the same page. If you’re the one who resists providing aid, try having an honest discussion with your spouse about the financial support and how it could negatively impact your retirement. Your financial professional could help with this conversation.

If you’re the parent who always gives money, try viewing things from the other perspective. Be open-minded and listen to your spouse’s concerns about the financial support. Consider agreeing to a limit or a compromise on how much money you can provide.


Involve your child in your retirement planning.

It’s possible your child may not understand how much their dependence impacts your finances. They may assume you have plenty of money to give, and they may not recognize how much money you will need for retirement.

Bring them to a meeting with your financial professional. Have them sit in as you and your professional discuss your goals, potential risks and whether you’re on track to reach your objectives.

Also, discuss how your child may be impacted if you fail to reach your savings goals. If your savings fall short, the roles may be reversed and it could be you depending on them for assistance. They likely don’t want to be in that position.


Create a phaseout plan.

It may not make sense to cut your child off all at once, especially if they rely on you to meet even the most basic bills. Instead, consider a phased withdrawal of support. Have them take ownership of one bill at a time.

For example, you could start with their cellphone bill. Once they can pay that on their own, then transition something else, like the car payment or their student loans. At the same time, help them develop the tools they need to succeed, such as using a budget and responsibly managing credit cards.

A clean break could put your child in a dangerous situation, encourage them to be resentful and damage your relationship. Make it a gradual reduction in aid and work with them to assert their independence.

For more information, contact us at Spicer Wealth in Beavercreek, Ohio. We are happy to sit down with you, your spouse and your child to develop a plan. Let’s connect today and start the conversation.



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15844 – 2016/6/27