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How to Not Go Broke Supporting Adult Children

You’ve worked hard, you’ve saved, you’ve downsized, and the nest is finally empty. Life is good. But then one of your kids loses his job. Or she starts falling further into debt. Or decides to send your grandchild to a private school he can’t afford. 

Now what do you do? Is your only choice to dip into retirement to support an adult child? How do you manage the feelings of guilt and obligation versus your own needs? 

Your Retirement Reality 

Once the nest is empty, the kids are off the payroll, right? Or just theoretically? Because your retirement may depend on it, know that it is never too late to talk to your kids about money. Even if that “kid” is approaching middle age. 

This is particularly true because during your last ten years in the workforce when you’ll most likely reach your maximum wealth-building potential and accumulate a significant portion of what you need for retirement. This is the time to put more into your 401K, downsize and reduce expenses, and really focus on reaching your retirement goals. Sure, there will be unexpected expenses, but ongoing unexpected expenses from your children shouldn’t be one of them. 

Build Your Financial Support Team 

But I know. You love your kids. You’ve made sacrifices for them since they were born. Shifting the dynamic can be hard when children become adults and their financial footing is still wobbly. 

“These can be really difficult situations,” says Wendy Dickinson, PhD and licensed psychologist at GROW counseling in Atlanta. “When we have parents who are in a crisis because of a failure-to-launch young adult, or an adult child in a health crisis, or perhaps an adult child dealing with an addiction that becomes a bottomless money pit, one of the first things that we do is a thorough assessment. We need to determine 1) what is the goal 2) what would the parents not be able to live with and 3) to what extent the parents are willing to learn to set boundaries.” 

Dickinson says that setting a goal is extremely important because it will guide the rest of the process: 

  • Does the parent unit want to require the young adult to be responsible for their decisions?
  • Do they want to appropriately financially support them during a difficult time? 

  • Do they want to provide for some but not all of their needs? 
  • Essential to the process of goal setting is clear communication and a willingness for the parents to be open and vulnerable about what they are feeling and what they need.

“I always spend some time talking to parents about what they could NOT live with – it’s really helpful in establishing a threshold of behavior. For example, would they not be able to live with their grandchildren being hungry? Or their kids/grandchildren not having the medical attention they need? Sometimes parents will say they are not going to pay for anything, except unlimited counseling if their son/daughter is willing to participate with a goal of getting better. I find there are usually exceptions to what parents are willing to pay for, and in the process of setting boundaries it’s important to be clear about these exceptions upfront if possible.” 

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