More than 50% of American parents in their 40s, 50s worry their kids will need financial help — well into adulthood. Is their concern real or overblown?

What the data says

A survey from U.S. Bank found 53% of Gen X parents are concerned their grown children will remain at least partly reliant on mom and dad’s wallet. This anxiety isn’t new; many parents are already providing some form of assistance at a time when younger adults are fighting a challenging job market, rising housing costs, mounting student debt and slower wage growth.

“I would never tell you not to help your child,” Marguerita Cheng, CEO Of Blue Ocean Global Wealth told CNBC. “It’s important to have boundaries or limitations to giving.”

A 2024 study by Savings.com found 47% of parents reported ongoing financial help to their adult children, with many of them saying they were sacrificing their own financial security in doing so. Parents in their 40s and 50s are at a critical stage in their own financial planning, when prime earning years are typically spent building the nest egg and ensuring healthcare security later in life is paramount.

“It’s tempting to simply say that today’s young adults are just mooches and that a strong foot in the rear will launch them into normal, independent adulthood,” authors of the Savings.com study noted. “That may be gratifying for parents who are tired of footing the bill, but it doesn’t solve or even properly describe the economic factors at play, such as rising housing costs.”

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Younger generations under pressure

It’s hard to deny that younger adults today are up against stiff financial headwinds. Student loan balances in the U.S. now total more than $1.7 trillion. Younger generations often graduate with tens of thousands of dollars in debt, making it harder to save, invest, or even cover day-to-day expenses.

The cost of renting or buying a home, meanwhile, has risen dramatically in many parts of the country. Rental prices in major metro areas have surged by nearly 30 percent since the start of the pandemic, according to Zillow.

When considering these factors, it's not so difficult to understand why many parents are concerned about their adult children being financially independent.

Consider this before helping

The challenge for both generations is striking a balance between necessary support and long-term financial health. Younger adults can take steps to minimize their reliance on parents by seeking financial education, negotiating for better pay, and exploring job paths that offer stability and growth. Building emergency funds, taking on side hustles, and looking for ways to reduce debt can all help.

What can parents do? They might start by assessing their own long-term financial picture. Setting clear boundaries and communicating them openly with adult children is crucial. Parents might consider:

• Retirement readiness: Before committing to covering your child’s ongoing expenses, ensure you’re meeting your annual retirement contribution goals.
• Opportunity costs: Every dollar directed to a child’s expenses is a dollar not invested or saved. Understand the trade-offs involved.
• Short-term vs. long-term help: Decide whether the help is a temporary bridge (such as covering expenses after a job loss) or likely to become a long-term pattern.
• Professional guidance: Meeting with a financial planner can help parents evaluate how much support they can realistically provide without jeopardizing their own future.

Ultimately, parents need to weigh the emotional desire to help their children against the financial realities of their own later years. Providing too much assistance now could lead to very difficult decisions down the road.