Parents are Sacrificing Their Retirement Savings for Their Adult Children
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A recent BankRate.com survey found that half of American parents surveyed are putting their retirement savings at risk in order to pay the bills of their adult children.
When asked if they had sacrificed their retirement savings to pay their childrens’ bills, 51% said either “Yes, a lot” or “Yes, somewhat.”
What Bills Are Parents Paying?
So what are these parents paying for that is draining their retirement?
Items detailed in the survey results were health insurance, education/student loans, cell phone bills, and housing among other things.
Survey respondents were more likely to say that it was ok for parents to pay bills until a later age for adult children as the amount of the bills increased. Health insurance, for example, was the highest acceptable age listed among all items specifically asked about in the survey.
Why is this Happening?
So why are parents increasingly taking on the financial burden of their adult children? And is this turning the kids “soft?”
Bankrate senior economic analyst Mark Hamrick said it’s become the “new normal” in America today.
“This is, for better and worse, the new normal because of the evolving approaches parents have taken to raising their children,” said Hamrick. “And it’s a result of some of the ongoing financial challenges that many families face, some of which were caused by the financial crisis and the Great Recession.”
He added that the sharply rising cost of education in America along with the popularity of advanced degrees is keeping people in school longer, thereby fueling the trend of parents footing the bills for their adult children.
Bankrate’s survey also quoted Dr. Laura Dabney, a psychiatrist specializing in interpersonal relationships, who said that even though setting financial boundaries with adult children is difficult, it is a conversation that families must have because prolonging paying the bills for adult children is only going to bring more harm to them.
“That thrill you get of stepping into adulthood — whenever you do that for your child, you’re robbing them of that great joy of figuring out and doing something on their own,” Dabney says. “It can be hurtful for those children for you to be ‘helping’ that much.”
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