Three Ways Adult Children Can Shake Up Your Retirement Plan


Parents know the cost of raising a child into adulthood all to well and may be relieved after making their child’s last college tuition payment, believing the financial burden is over. However, when your adult child turns to you for financial assistance, the emotions tied to parenthood can easily take over. During these times, it’s only natural to honor such a request without thinking about the impact to your retirement plan.

Here are the three most common situations we advise our clients on:

#1 Assume their children’s debt or take on loans for their benefit

Most parents want to give their children the strongest start possible in adulthood. For some, this may mean contributing to payments for their children’s college loans, car loans, and even mortgages. Alternatively, they may outright pay for some of these items or take on a loan themselves. While intentions are noble, such financial support is risky for many.

If this situation applies to you: Please contact us before you make any commitments to anyone. We can then help you understand the level of support you can provide without jeopardizing your retirement plan.

#2 Allow children to move back home

It’s common for young adults to live with their parents, but most parents didn’t plan on supporting them into adulthood. Temporary assistance can unexpectedly last for years. It can also damper any plans you might have for downsizing.

If this situation applies to you: If you want to allow your grown children to move back home, we encourage you to set financial terms for the arrangement that include some form of rent payment along with the length of stay. Requiring a young adult to pay rent can help instill a sense of financial responsibility.

#3 Pay major expenses for grandchildren

It’s difficult for even the most financially disciplined clients to turn down requests to pay expenses associated with grandchildren. The costs associated with lessons, private school, summer camp, and college can go on for years.

If this situation applies to you: We can help you establish an annual budget for grandchildren. Clients we already help in this area are often relieved when we get involved in the budget-setting process. It removes the burden of guilt from denying their children’s requests.

Don’t get caught off guard

If you’re a parent embarking on or already in retirement, we encourage you to think about the types of financial support you want to provide your children throughout their adult lives. We can then work with you to determine the level of financial support you can comfortably provide during this important time in your life.

For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit or contact us at 513-554-6000.

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