MINNEAPOLIS (WCCO) — A new study shows half of American parents have cut back on retirement savings to help adult children pay bills.
WCCO’s Esme Murphy went to the University of Minnesota to ask students how much their parents help with the bills.
Some, like 19-year-old Lexi Elgin, say their parents help with just about everything. WCCO also asked Elgin, realistically, when she expected she would be able to pay for everything herself.
“I don’t know yet,” she said.
Answers such as Elgin’s are surprisingly typical. The new Bankrate.com survey found parents are increasingly helping adult children in their 20s and even 30s pay bills, including cell phones, car payments, car insurance, health insurance, rent and students loans.
Of the couples surveyed, 17% say they sacrifice their retirement savings “a lot” by helping their adult kids, and another 34% say they “somewhat” sacrifice.
The survey found there is a generational divide when it comes to this issue. Millennials between the ages of 23 and 38 think parents should help cover some expenses until at least the age of 23, whereas Baby Boomers who are older think young people should be weaned off their parents’ bank accounts much sooner.
Bruce Helmer, co-founder of the Wealth Enhancement Group, has been a financial adviser for more than 30 years.
“I know some people would say that we have raised a generation that feels entitled,” Helmer said.
He pointed out that skyrocketing college costs are also to blame. He said he increasingly has to have tough conversations with clients.
“I will say, ‘Look, you told me you wanted to retire at age 62. You are not going to make it. You are going to have to work a little longer.’ And sometimes they say, ‘It’s worth it to help my kids,’ and other times they say, ‘We’ve got to let these kids make it on their own.'”