Are you making this mistake?
Parenting has no specific end date. Sure, technically, you’re no longer legal responsibility to support your children after they turn 18, but in general, people don’t cut their kids off financially when that birthday rolls around.
So some parents help pay for college. Others let their kids live with them for years after they reach legal adulthood. The trend of moving back home for a time after college is well established — as recently as 2016, the Pew Research Center found nearly a third of 18 to 34 year olds were living with their parents. And even those with their own homes or apartments may be getting financial support. For a large number of expense categories, millennials on average figure that mom and dad should be covering the bills for a year or so longer than their boomer parents think is reasonable.
All that parental help can plant a major detour along parents’ road to retirement. Among respondents to a new Bankrate.com survey, fully half of those who had adult children said that financially supporting their grown offspring had hindered their ability to save for retirement. And roughly 1 in 6 (17%) said that the impact was significant.
Whom is this hurting?
People want their kids to succeed, and in many cases, they define that as having a lifestyle that at least approximates the one the parents enjoy. That may explain why higher earners are more likely to sacrifice their own nest eggs to help adult children (while lower earners are more likely to not be saving for retirement at all).
Among families with household incomes of at least $80,000 a year, 60% of parents said that they’d hurt their own retirement savings in order to help adult children pay bills. And while fewer families making less than $50,000 a year are paying bills for grown kids, 17% of them have yet to save anything for retirement.
“Addressing the financial elephant in the room isn’t always an easy conversation to have, but it is imperative for your future and your child’s long-term success,” said Bankrate analyst Kelly Anne Smith in a press release. “By not prioritizing your own expenses and retirement savings, that is when everyone suffers.”
To read the full article from MSN and The Motley Fool Click Here