Adult Children vs Retirement Planning

[ivinsfan]

I've already decided that I would be willing to live in a cardboard box under a bridge to be able to help my DSs. DW has other plans but that is just me and how I was raised. Family is EVERYTHING.

This is where people get tripped up. You don't have to live in box under the bridge to show yourself or anyone else that family is everything.

Money makes life nice, but you can raise wonderful kids and have a happy family on a shoestring. Or you can have millions and unhappy self-destructive kids. I don't think anyone would disagree with that.

It all come down to your definition of "help" … I've found money might be the least of it.

I'm seeing stories here of parents with plenty willing to share with their mostly successful children. I'm not seeing people imperiling their retirement years or giving their grocery money to their kids. I'm not seeing people being pressure by their kids to give this and that without regard to the parents well being.

I don't know if that is a demo of this board or if people in that giving the last dollar camp feel they can't share.

 

[karen1972]

The only real big difference with this generation is that previously when the kid wasn't motivated they stayed home, got some local job and eventually moved into an apartment, got a beater car, scraped by with maybe a few dollars provided when the heating bill was super high or the car broke down. You let the kid move back in with you when they went thru divorce, etc.

THIS generation, parents shoved their kids into college ... which equals 4 years of not making money PLUS Student loan debt and the kids still came out not motivated getting same local job as they never wanted to go to college in the first place... but NOW you have student loan debt and a later start on life.

The other thing is grandma guilt... I've heard WAY too many grandparents saying things like " I cant have my Grand Baby ...." So your kid is driving an 8 year old car and the grandma is like omg its a rolling death trap because the blinker broke. Seriously I see it all the time, the stuff forced on the younger generation because the money the kids makes doesn't afford the latest and greatest ... that use to be ok.. but somehow now is just NOT acceptable and to me it comes more from the grandparents generation than from the 30-40 year olds.

 

[Cobra9777]

I moved out at 17 and put myself through 7 years of college (bachelors + masters). My parents lived paycheck-to-paycheck, but they managed to send me about $1500 total through those 7 years (mostly in the first 2 years of undergrad). The rest of the money came from working in restaurants and grocery stores. I rode a bike for 4 years and lived in dumpy houses with lots of roommates.

Fast-forward 35 years... We have 2 great kids, now 30 and 27... one engineer, one teacher. We paid their in-state tuition and housing for 4 years. They worked part-time and internships for spending money. They each got a new car upon graduation (with job offer). And we helped each with the down-payment on their first home. DD is talking about grad school and we have offered to help since she would not be able to work at the same time (very demanding OT program). We are also very generous with gifts and have started college funds for both grand-kids.

Obviously, I don't see this as enabling at all. We are trying to help our kids get off to a better start than what we had. The kids have heard the story in paragraph 1 many times. It certainly is not putting our retirement at risk. It's really just a way of transferring some wealth now, when the kids really need it, rather than later when they don't. The kids have also watched us take care of DW's aging parents. So I have no doubt that when the need arises, they will be there for us. Every time we do something nice for them, they thank us, and then I jokingly comment, "just remember to pick a good nursing home."

 

[mpeirce]

On my last cruise I met a lovely 75-year old woman who was there with her 12-year old granddaughter. I realized how much I wanted to do that for mine, one kid at a time, and we'll choose the destination together. I hope I'm around and active long enough. I think the big, splashy trips will be one per kid per lifetime because I also put a very high priority on funding their 529s.

I did something like this with my Dad's folks. They took me on a trip to Europe when I was 16 and it is one of those memories I'll never forget. Great exposure too to the world outside of America. And they were the grandparents who also paid for my college expenses.

They helped me get started in many ways. I'll forever be grateful.

 

[socca]

I think if you do too much for adult kids you take away their own sense of accomplishment. DS and DDIL don't live like millionaires but what they have, they pretty much built/earned themselves.

My grandmother was horrified when I showed her around the first house I purchased back in the early '90s. I found this a little perplexing; after all, it was what I could afford back then. True, it was old and tiny, but it suited me perfectly. Only decades later did I discover (accidentally) that she was a high-income person, which cleared up that mystery. Sorry - I had to live within my means, not her means.

 

[gamboolman]

Not really my business, but do you give money because you really want to, or do you give money because the kids pressure you or perhaps you feel guilty to see the kids struggle. I've seen many give until it hurts and I'm never sure which scenario applies. Every family is different, I know.

Ivan - really good question - I think it is number 3, i.e, hating to see them struggle....maybe?

Like lots of folks, I worked as a kid thru high school, and I went to work in the oilfield at 18 and have worked everyday since. Ms gamboolgal and I always wanted our kids to be able to go to college debt free. They did - as we paid for everything and multiple degree's....

We was poor living on love and the struggle of living life and loving each other. I would not change a thing. But that is near to 44 year later and being financially comfortable...

As to why we have helped out our grown kids? We were not pressured or made to feel guilty, it just sort of happened - working &living oversea's probably has had a good bit to do with it. Since we only come home twice per year and we make good money.

One thing - I was a absentee father - working all the time and gone. Offshore or oversea's for months at a time....9 months offshore in one year was the longest stretch......even working from home - I was not there. Left way early in the morning, like 0400 leaving the house, and getting in at 7 or 8 pm....then working at my office at home....I regret that and it probably was/is a factor in the money thing....I guess guilt...... I guess now after the fact - it was wanting to get them sat up good and it just went on too far....But we have lived thru being layed off and $9 bbl oil ....tuff times....but we had each other and babies to take care.

With retirement just around the corner - anytime from now until the end of the year, there will be a change. Probably high time for it.

This, I can say for sure....it is just a blink of the GD eye when I was holding that little gal from East Texas and she was barely 17....

Lifes A Dance And You Learn As You Go....
ms gamboolgal and gamboolman....

 

[SpinDoctorTX]

Adult Children Are Costing Many Parents Their Retirement Savings- excerpt from article: "Financial independence, once a hallmark of adulthood, has gone by the wayside as adult children increasingly depend on their parents to help them cover the cost of rent, student loans, health insurance and more. But parents' desire to give their children a financial assist could be misguided — and even backfire in the long run."

We've seen the above scenario or some version of it throughout our family. Hubs & I have helped out his sons (the one with kids quite a few times) as well as 1 of his sisters- when we could.

My sister is my polar opposite (an organic farmer, Bee relocator and Bee keeper), but she is always having some sort of money tragedy. I love her to death, so we usually help out in some way at least.

When I retired (yippee!) in 2016 @ 56yo, we had "the talk" with them (I hate those talks... I have a lot of my Dad in me and it is hard for me and Hubs to not sound critical. Some of the things they do just boggle the mind, and we try really hard to be non judgemental. Anyhow, message received by all.

We were really blunt about the nest egg we have, and the need to be not dipping into it unnecessarily for non budgeted items.

My bro is extremely wealthy with a professional shopper for a wife. The advantages given to his three daughters has resulted in all 3 lacking the skills to find a decent job. Oh, and the two who have degrees not conducive to finding a good job. He recently said to me that he plans to work until he is 70. He is 62. I told him that I only have about 500k in ira, 100k liquid, small pension ($900.mo), Hubs SS & abt 200k not liquid but could be sold at a profit probably, LTC ins and good retiree insurance. It's not a typical situation from many in here, but we do anything we want to when we want to. We're going hiking in Ark in Early May. My question for my Bro was, when is enough enough? We never know our planned date of departure, and I'd hate to see him work himself to death like our Dad did- 3 yrs of retirement & enter glioblastoma. He needs to set those birdies free and let them sink or swim- that would be the biggest gift of all. Pass out advice, not $.

I'm happy to be retired at 58 so that I & Hubs can be retired together while we're both in good physical shape. That status has an expiration date.

We're not the jet set, we're the old Chevrolet set (full disclosure that really is Jeep Hyundai set). We would think long and hard if anyone asks for substantial money. Mom is 82, G-MO & Great G-Mo both lived to 101. I'm sure I partied at least a decade (and maybe 2) off of that possibility.

 

[Teacher Terry]

My kids are between ages 39-46 so that generation didn’t expect to be supported. I don’t know anyone that supports their adult kids.

 

[Pellice]

<Disclaimer, never had kids> I wonder if there isn't a greater disparity (or even loss) when "launching" now than was the case 40 years ago. When I started out on my own, my folks had an extremely small house, and I had a small apartment. They had 3 television channels and so did I, although they had a color television and I had B&W for some years (didn't watch much TV so it didn't really bother me). Free radio channels. They had a stereo. My first car, in college, they bought for me, old used Ford Galaxy. Neither they nor I had any debt. My lifestyle wasn't all that different from theirs.

Nowdays, kids moving out take a real hit if they are from the upper middle class. They move into much smaller quarters. They may not have a car. Their spending is greatly curtailed. They may have roommates and have to negotiate. These are losses. "Independence" is tougher to appreciate if you are stepping way down in lifestyle. I loved my freedom, but my life didn't seem that much different.

I think parents somewhat instinctively understand that their kids "putting up with a few struggles" may actually be better described as "undergoing serious downward mobility."

 

[pb4uski]

Thinking back, with I first got out of college I shared a house with 4 other people... 5 of us in total... and splitting the cost of renting a house 5 ways made it affordable. Others I knew would share a 3 bedroom apt 3 ways.... do any young adults do this anymore?

DD and DS have shared apartments over the years, but usually only them and one other roommate.

 

[albireo13]

I don't mind helping out my kids on college expenses.
What's a better investment? .... buy myself more crap?

 

[Sunset]

What surprises me is the parents who just let their kids vegetate at home.

One guy I know has let his son just hang out at home for the past couple of years following high school graduation, which usually doesn't turn out to well, e.g.:

My old college roommate is having to come back home to the U.S. after 20+ years working overseas to care for his aging mother, despite having a younger brother who has lived with mom all that time.

+++
I know a fellow who has since age 40 lived with his parents, only had a job for 1 year in that time restocking grocery shelves. This guy has a degree and worked in a technical job.
It has been over 20 years of this.. now he is collecting SS, I think.
He still does nothing, other than read , visit other layabouts, and wait for his parents to make dinner every night

 

[Sunset]

On the subject of helping adult kids....

Both of our sons are successfully launched. We paid for college and they graduated with no student loans. Older son (34) makes enough that he could easily live on half his income. He lives comfortably, saves, invests and spends plenty on stuff he wants.

Younger son (32) was self-employed/freelance until last fall when he got hired by one of the companies that used to hire him as freelance. He's now on salary and makes enough to support his family. He and his wife have a 5 mo old baby and would love to get a house. When they got married it was a legal marriage in Beijing, but there was no "wedding" celebration. Instead, we gave them a substantial (for us, in our situation) cash gift.

They are getting serious about looking for a house and got pre-approved for a mortgage. My parents helped us when we bought our house and we are talking about giving them a cash gift. My hesitation is that I feel like one son is getting these chunks of money and the other son is not. If the older son got married (not looking likely) we would do the same for him. He is content with renting. If he decides to buy a house later on he may just pay cash for one if he saves a while longer.

So I have hesitations about giving one son large chunks of money and not the other son. Sure we could give equal amounts to both but we don't have huge wealth and what we have has to last us a long time and we are only getting older.

I guess this is one of those nice problems to have as both sons are level headed, solid, responsible adults. And even though our nest egg is limited, we have enough money that we are considering giving some of it away!

No idea if it applies, but even a real loan (legal and with legal but low interest, and allow rapid repayment, etc) can be very appreciated.

My mother did that for me, and it helped me buy my first home, and I paid her back.

 

[Nick12]

+++
I know a fellow who has since age 40 lived with his parents, only had a job for 1 year in that time restocking grocery shelves. This guy has a degree and worked in a technical job.
It has been over 20 years of this.. now he is collecting SS, I think.
He still does nothing, other than read , visit other layabouts, and wait for his parents to make dinner every night

That kind of person - only a mother could love.

 

[athena53]

The other thing is grandma guilt... I've heard WAY too many grandparents saying things like " I can't have my Grand Baby ...." So your kid is driving an 8 year old car and the grandma is like omg its a rolling death trap because the blinker broke. Seriously I see it all the time, the stuff forced on the younger generation because the money the kids make doesn't afford the latest and greatest ... that used to be ok.. but somehow now is just NOT acceptable and to me it comes more from the grandparents' generation than from the 30-40 year olds.

I saw that with my Aunt. She inherited money from her family maybe 20 years ago. Hers was a traditional vintage-1950s marriage so she put it into the common pot and my Uncle (Dad's brother) got a financial advisor to help them manage it. (I'm trying to avoid a tangent on financial advisors but if you're curious it was EJ and you can do worse than investing in American Funds, especially if you invest a high amount going in and keep them for a long time.)

They have 2 sons and over the years they forked over for a lot: fancy wedding for DS #1 (they gave them $X,000 and said they could use it for a house and have a small wedding, but guess which they chose), putting the 2 grandkids through a parochial school since they had concerns about the local public schools, helping the grandkids with college. (DS#2 never married; neither attended college.)

DS#1 had a landscaping business, their DDIL worked her way up at JC Penney's so she provided financial stability but not big bucks. DS#2 worked for the railroad for awhile and dabbled in selling real estate; not sure if they propped him up or not.

Uncle was diagnosed with Alzheimer's a few years ago and Aunt nearly spent down to the max allowable for Medicaid before he died in LTC. So, she doesn't have a lot left. She'd told me before he died she was losing sleep over the LTC costs as a self-pay for him. Her house is paid for and she has a relatively new car, but macular degeneration is creeping up on her. I REALLY hope her kids step up to the plate and take care of her.

Even in my church, I know of 3 families taking care of kids from the younger generation: two with grandchildren and one with a great-niece. When I visit DS and DDIL next month I have to tell them again how much I appreciate them.

 

[copyright1997reloaded]

Reading this thread with great interest, and it is something I think about a lot.

I have a sixteen year old child, and we just got back from a college open house. Private school, in the range of 60K/year. DC is interested in it, but no real concept of the money aspect until on the way back I mentioned that four years there would cost more than the house we are living in. Then the lights (sort of) went on in terms of how big this decision is.

What makes this tougher for me is that in the end game, the 240K is likely to be meaningless in terms of my lifestyle. I lost more than that in Oct/Dec 2018 (and have gained more than that back since then). It is likely that my current pension (already drawing it) plus social security will be mostly enough to meet my ongoing needs, and much of my assets don't need to be tapped. But that doesn't change the fact that it is serious, serious money, in fact more money than I have ever spent on something in my entire life. More importantly, I want DC to recognize and grasp the meaning of it - that it represents an entire plethora of things that can't be done, either for me or for them going forward.

Money does buy flexibility, but it also provides a burden to those who have it in terms of instilling values into their children. Quite frankly, I'm not sure I will be successful in instilling those values (the jury is still out).

When I graduated high school, , there was no such option - not even any thought process of going to an expensive school. I was able to get a half scholarship with an essay I wrote for my fathers union, which was for a particular school - so that is where I went. My parents plus me working part time were able to produce the rest (I commuted to school so that saved quite a bit). All I knew is that I didn't want to have a life of hard labor like my dad did or neighbors fathers up and down the street. When I later graduated with a double major in three years I went to work in the high tech field - I was flabbergasted when I saw the children of people I worked with. My fellow workers (upper middle class parents) were able to provide them so much (relative to what I had), yet they did so little with it.

So I struggle with this with my child. We want to give the best to them, to make their lives better than we had or to not have the same struggles. But at the same time, are we really preparing them for when we aren't around to help them anymore?

 

[daylatedollarshort]

We've paid for college, used cars, helped with some medical bills, etc. and retired early. Maybe we will help with houses when they are older. We told them they had to have self supporting majors in careers with reasonable job prospects, so barring something major like a medical disability, they shouldn't need ongoing financial support post college.

 

[ncbill]

Reading this thread with great interest, and it is something I think about a lot.

I have a sixteen year old child, and we just got back from a college open house. Private school, in the range of 60K/year. DC is interested in it, but no real concept of the money aspect until on the way back I mentioned that four years there would cost more than the house we are living in. Then the lights (sort of) went on in terms of how big this decision is.

What makes this tougher for me is that in the end game, the 240K is likely to be meaningless in terms of my lifestyle. I lost more than that in Oct/Dec 2018 (and have gained more than that back since then). It is likely that my current pension (already drawing it) plus social security will be mostly enough to meet my ongoing needs, and much of my assets don't need to be tapped. But that doesn't change the fact that it is serious, serious money, in fact more money than I have ever spent on something in my entire life. More importantly, I want DC to recognize and grasp the meaning of it - that it represents an entire plethora of things that can't be done, either for me or for them going forward.

It comes down to ability & preference.

Some (especially over on bogleheads) insist on paying for the best undergrad their kid can get into...regardless of the cost.

But I knew that after I was forced to leave full-time, career-track employment at a Fortune 500 company in my early 30s to care for an ill parent that was not going to be an option for our family.

I consider ourselves fortunate that we were able to get into a position to at least help with paying for in-state public schools, but in the end the kids chose to trade military service after graduation for their undergrad degrees at pricey private universities.

I certainly hope we will be in a position to help the kids out later in life, but after my experience with my mom I made it clear to them the best thing we could do for them is to take care of ourselves first.

 

[Bestwifeever]

The college kids in the recent news whose parents paid to get them into schools or to improve their test scores had to have had had their self-worth affected big time, and not in a good way. Helping kids out too much once they’re launched may have a bit of the same effect. We give unexpected cash to our kids occasionally, who are each married with kids, and have houses and cars that they bought themselves, not on a regular basis, not large sums, and just say this was a good year, it might not happen again.

An acquaintance’s single daughter lost her decent job in the 2008 recession and moved back home at 29. Pretty bright young woman, an only child, parents fairly well-to-do, big house. We ran into her parents maybe five years ago and she was still living there, going to Pilates and shopping with her mother, traveling with them on vacations, no job other than helping her father out at his law office a few hours a week. They were so tired of her but did not know what to do. I wouldn’t either, probably. I’ll have to see if she’s still living there.

 

[Retch The Grate]

My kids are between ages 39-46 so that generation didn’t expect to be supported. I don’t know anyone that supports their adult kids.

I'm 46, once I graduated from college I had no financial support from my parents (because I didn't need it, I knew there was a safety net if anything went disastrously wrong) for ~14 years and it definitely wasn't anything expected. About a decade ago they started gifting my brother and I money up to the annual limit since as they said they see no reason to wait until they are dead to start passing on our inheritance. they wanted it to come to us when it would make a lifestyle difference. I don't think it had much impact on my little brother for most of that time, he's ended up in management consulting and makes a ton of money, but for me it has definitely been a meaningful contributor to my ability to sock away money every year. I already had been maxing my 401k and investing up to the limit in my Roth, this helped me greatly increase my after-tax investing as well.

I think the key is that my parents are well off, know they are likely leaving an inheritance, and want to see it making a difference in our lives while they are alive and it has no material impact on their lifestyle (my dad is retiring this summer as work finally crossed his more BS than fun mark at age 72 when they redid how many hours the position has to teach). They didn't hold our hands when we were out of college though they were always there for advice, so we got to grow as young adults and figure out how to make a living and take care of ourselves.

If anything every did happen and my parents needed support financially (or frankly any other way) I'd be returning the favor in a heartbeat.

 

[Lawrencewendall]

I paid for DS's Associate at county. He took so long to get it that when he went for his BS, only his income (part-time bar-tending) counted and he got a full ride scholarship from Federal, state, county and the school for UMBC.

 

[Sunset]

...
I have a sixteen year old child, and we just got back from a college open house. Private school, in the range of 60K/year. DC is interested in it, but no real concept of the money aspect until on the way back I mentioned that four years there would cost more than the house we are living in. Then the lights (sort of) went on in terms of how big this decision is.

What makes this tougher for me is that in the end game, the 240K is likely to be meaningless in terms of my lifestyle. I lost more than that in Oct/Dec 2018 (and have gained more than that back since then). It is likely that my current pension (already drawing it) plus social security will be mostly enough to meet my ongoing needs, and much of my assets don't need to be tapped. But that doesn't change the fact that it is serious, serious money, in fact more money than I have ever spent on something in my entire life. More importantly, I want DC to recognize and grasp the meaning of it - that it represents an entire plethora of things that can't be done, either for me or for them going forward.

Money does buy flexibility, but it also provides a burden to those who have it in terms of instilling values into their children. Quite frankly, I'm not sure I will be successful in instilling those values (the jury is still out).
.....
So I struggle with this with my child. We want to give the best to them, to make their lives better than we had or to not have the same struggles. But at the same time, are we really preparing them for when we aren't around to help them anymore?

Perhaps you have so much that it makes no difference. Hopefully your child is headed towards a degree that actually will pay a good wage (not English, History, Psych, Philosophy).

Still I look at that number and wonder could you swing it AND help out with a house down payment (or hold the mortgage). What would your child say to a cheaper college and future house down payment instead.

 

[Nick12]

Went to a private school with my brother in high school thru a scholarship program. Private school charges 6K a year in early 1980s. Same school charges 39k a year in 2019. Knew some kids that were trust fund babies. Those kids went to college to party and ski. Now some of them are still living in the high priced neighborhoods they grew up in and living off their trust funds and other monies passed down to them. No retirement planning needed.

 

[copyright1997reloaded]

Perhaps you have so much that it makes no difference. Hopefully your child is headed towards a degree that actually will pay a good wage (not English, History, Psych, Philosophy).

Still I look at that number and wonder could you swing it AND help out with a house down payment (or hold the mortgage). What would your child say to a cheaper college and future house down payment instead.

That is part of the discussion, and have even pointed out that money not used for college could be used towards a house or their retirement or children's needs. The part that isn't clear is how much of this actually gets through. Maybe it is, but part of me is that it is like speaking to someone who doesn't understand the language - you aren't really sure if they understand (and even beyond that agree or disagree with your reasoning).

Maybe it is just an ongoing process. While I have mentioned the $ amounts saved for them in passing, maybe it is time that I actually show DC actual account balances, what it took/takes to save for that balance, and essentially tell DC that they need to be involved in the management of that money. That, along with a requirement that money beyond that pot needs to come from them (or from scholarships) would make it much more real, as well as if they are able to reduce the cost of college (from scholarship money or a lower priced school), the rest is theirs to keep.

 

[Jamie1101]

Trying to hold my tounge

I personally never wanted the responsibility of children or a family. Growing up my parents instilled into me I could do whatever I wanted so long as I bore the responsibility for the cost of my actions. I have been fully independent and on my own since 1976. Long story short, I feel sort of guilty in the pretty much stress free, great life I'm living. I'm witness to some in my family and circle of friends living at a poverty level with no hope of ever retiring supporting their grown children and grandchildren. These people should be enjoying their golden years but instead are sressed out messes contending with the dysfunctional lives of their offsprings. They are paying the cost of helicopter parenting many times over. Never being a parent I keep my mouth shut when it comes to the advice part....