More than 40% of parents with kids between the ages of 18-35 report that a child has moved back home at some point. About half of those kids did it out of necessity, but for many, it was more of a strategy to save up money given the high cost of renting or a down payment for a mortgage.
Whatever the reason for an adult child moving back home, I need all parents to make sure that what makes financial sense for their child doesn’t put their own financial security at risk. In the same Thrivent survey, more than 40% of parents said they were willing to cut their spending to help their kids, and nearly 20% are willing to reduce their retirement savings to help.
If you want to scale back your spending on “wants” to help an adult child, that is fine. But don’t you dare stop saving for retirement. That is the opposite of being a good parent.
I understand the urge to help. Yet I need you to slow down and think not just about today, but your tomorrows as well. It’s natural to be focused on near-term goals. And we’re agreed that helping an adult child as they launch into this new phase of their life is perfectly natural for any parent to focus on. But when it comes to building lasting financial security, we need to focus on the long-term as well. And that’s where your retirement takes center stage.
Every dollar you stop saving for retirement puts your future at risk. It’s not just a dollar you won’t have for retirement, it is all the compounded growth of that dollar you lose out on. Again, I want to be clear: I understand the motivation to want to help your child. But when you scale back your retirement savings, I think you may be hurting them long-term.
Let’s jump forward 10 or 15 years. Your kid is well into adulting, with a career and likely a young family. And you have retired, or are ready to retire, yet you are worried if you have enough money to outlast you. That’s not just stress on you, it’s stress for your adult child(ren). Right when they are navigating all the financial challenges of raising a family and saving for their own retirement, you have inadvertently made your retirement security a concern for them.
That’s why I want you to push yourself to always think about the future when making financial decisions. Always ask yourself: “If I do X today, will it help or hurt my financial security 5 years, 10 years, 20 years from now?”
They may not know it right now, but here’s what every adult kid wants from a parent: Smart decisions that ensure that as the parent ages, they will have the resources to live comfortably. That’s a tremendous gift you can give your kids, but it may require making choices today to keep your financial life on track for the benefit of your future you.
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