November 4, 2019

Helping an Adult Child: Pitfalls and Positives


I have noticed a lot of web articles recently that deal with the issue of grown children and retirement. A descriptive phrase like "boomerang kids" is common. "Helicopter Parents" is usually used to explain overly involved parents during a child's educational career, but I guess it could fit here, too.

The adult child has to move back home due to a lost job, or medical condition. The grown child needs help to pay for additional education to reenter the job market. A divorce may mean that child brings along his or her own children when moving back home. This is not a rare occurrence. One survey I found showed that 44% of jobless 18 to 34 year-olds live with their parents. Almost 25% with jobs are still at home.

Some of the articles take a firm position As parents, you have already done your job. The grown child is on his own. The money saved for retirement is not going to be used to solve someone else's problems. Maybe a small loan here and there, but no full scale bailout. You are not going to become a full time babysitter for your grandkids. The house is no longer set up to handle an extra person, or two or three.



The flip side to that is your child needs your help and you are going to provide it. When you became a parent you believe your responsibility doesn't end after a certain age, regardless of the circumstances.  You do what you have to do to provide shelter and food, or money for an education or a car to get to work, or whatever. If your retirement savings take a hit, so be it. Family comes before your portfolio.

So, what do you do? Cut the cord and tell the robin to fly, or provide support, both emotional and financial, as long as needed? How much should your own future be adjusted for an adult child?


Here is another toughie. I received an e-mail from a fellow a month or so ago asking for feedback and ideas from readers on another adult child-parent issue. His youngest daughter was into her final year of  college. She had done her part by getting scholarships and taking on a rather sizable student loan. Even so, helping her with college tuition put mom and dad further behind each month. Saving for their own retirement had to be delayed and their own debts were increasing.

This couple is within a few years of retirement. They are worried that the financial hole they have dug for themselves means retirement may be just a dream. The fellow's question was a simple one: if you have committed yourself to doing what you must for a child, do you have to accept that retirement is not a likely scenario? Is working well into the future the only option? They willingly helped their daughter and are not interested in abandoning that promise. Yet, they wonder where they are headed.

These are not easy questions. Society continues to change, making the answers and solutions less obvious. When we were a rural society this type of problem rarely arose. Everyone stayed close to home or accepted that each family member was responsible for the well-being of the rest of the family regardless of age or circumstances. That model no longer exists for most of us. Multi-generational living is still the exception rather than the norm.

Do you have any experiences in this area to share? Can you give some solace to the parents who have put their own retirement in the deep freeze for their daughter? Do you have feelings about where and when the obligations of parents ends...if it does?  Would the door to your home and bank account be closed or open in a similar situation?

Are you helping or hurting a grown child if you provide support and lodging? How much enabling is too much? 

Toughies, I know.
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30 comments:

  1. Financial priorities vary greatly among individuals because they are a reflection of our own personal needs, wants and values. While general principles apply to everyone (reduce debt, build an emergency fund, save for retirement), the way we save and spend is tied to who we are and what we believe to be important in life.

    It seems to me that the couple you mentioned would benefit greatly from an honest discussion with their accountant or a pay-by-the-hour financial planner. It is their right to spend their money as they wish, but it appears that this is a situation where professional advice could be beneficial.

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    1. Their situation is a tough one because of the commitment they made, as much to themselves as to their child. Having a professional look the situation is certainly a good idea. There may be a way to be faithful to their daughter and make retirement happen. It is worth exploring.

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  2. My suggestion to the man above is to lay out the debt to the daughter NOW. Come up with a plan. Worry does nothing (as I learned here), action to pay it down and move forward.
    There is no blanket answer for how much to help. We moved across country to help out and are in the process of moving back. My brother has a trailer and a family of four in his backyard. My sister has a terminally ill son back in his room. Our good friend house shared with his mother (with his two kids) until she passed. Another house shares with her son and his wife. It is a yearly decision to continue And NONE of us ever took on debt for them. Ever. Since we never "kept up with the Jones'", neither did they.
    We will all get Social Security when the time comes. Each of us own a house. Retirement may look different then it did to our parents, but many of our parents were lonely in retirement centers. Most of us plan on a multigenerational house in our future (and the "kids" are all in). I cannot imagine a better old age then hanging with my grands and great grands in my tiny apartment with my robot care taker.
    Be honest and open with your children from the beginning. Our IRA's and the amount we put into them each month were never shown- or discussed. We were, instead, honest about what we make and the sacrifices that we would be willing to make to help them start/live. We felt it was important that there was an end game "in four years we will not be paying any more bills." "we are moving West in three years". Boundaries were drawn. I still take the entire family on a vacation once every two years. I save like crazy for that vacation. They know I save. They can choose not to go- but it is open to all. Experiences over stuff.

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    1. More multi-general living arrangements is probably the path many will be following. After a certain time in one's life, single family homes are inherently wasteful in terms of energy and use of resources. There is so much that can be learned when generations share their lives together.

      Thanks, Janette, for your thoughts and the examples of what some members of your family are doing in the midst of tough circumstances.

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  3. My nephew's daughter just recently moved in with him bringing three babies under five. She and her husband both worked, were buying a house and paying off student loans when he died suddenly of an aneurysm. She was pregnant at the time. My nephew made a five year commitment to help her get back on her feet and I honestly don't see how any parent could not do the same.

    The cookie cutter approach to life doesn't work. Some capable but insecure kids need to be shoved out of the nest and learn to fly on their own, but sometimes if they break a wing doing it they need to be welcomed back into the nest to heal. Never say never.

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    1. Never say never is a good approach. We have welcomed one of our daughters back into our home three times after job losses or roommate problems. It was the right decision for all three of us each time. As you note, I could never say, "No," to a child of mine, just as I am sure either one of them would be there for us if Betty and/or I needed their help.

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  4. My approach has always been to underpromise and overdeliver. I dunno if that's the right way to do it, but it works for me.

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    1. I used that approach in business to great success. I guess it applies in this case, too.

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  5. I have two partially disabled grown children. I have four grown kids total. I have family land I inherited and a small, kinda shabby house I inherited. I also have a small, paid off house I bought because it is convenient to work. They can always stay on family land, in a mobile home, or in one of the houses. I now plan on working until I am 65, maybe 67, maybe even 70, as Suzy Orman recommended. But, even if I retire at 62, I will help them, if needed and if I can. They work, when they can. From each according to their abilities to each according to their need, is my motto. I also have provided financial help for college or housing, when needed to the other two kids. They are all good kids, and all try to work, when possible. One has an exceptionally good job and education. Another is finishing his bachelor's degree with honors in May and will go on to higher education, and I plan to pay for that as much as possible. When I travel, I travel to see my child who lives 2000 miles away and she lives near the mountains so I can go visit those. I also can go visit the ocean on a day visit because I live close enough. If I never get to tour the world, that is ok. I am not that much of a traveler now because I work so much. I have done five murder or manslaughter jury trials this year alone. I say this not to brag, but to say that is why I don't travel much right now and because I want to keep working so that I have more money to help my kids. If I did travel, I would want to take one of the kids with me. Maybe I will travel the world when I retire, or maybe I won't. It is ok if I have to stay in the U.S., although, yes, I admit, I would like to travel elsewhere also. However, I want to make sure my kids are ok, more than I want to travel the world. I just want to make sure every kid has a house/mobile home to live in running water, and electricity and that nobody can evict them. I shudder with horror and feel so sorry for the poor homeless folks in California, and elsewhere. I cannot help them, but I can prevent that from happening to my kids. I am not helping my kids with an extravagant lifestyle, and they, again, work when their health issues allow it. I hope when I leave this earth, my kids are ok, and I am trying to set it up so that they will be ok. I am not rich at all, but I am putting my resources that I have, to help my family. That is something that is within my power and something I can do.

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    1. Bless you. You have made an informed choice to put others and their needs before yours. I can't think of a better way to fulfill our commitment to love others as we love ourselves. In my view, caring for family is not a burden at all. It is what we do because we love.

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    2. "From each according to their abilities, to each according to their need" - I think that's a wonderful motto!

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  6. My brothers were in and out of our lives too many times. They weren't great mentors to my boys, for sure but, what could I do after a phone call from mommy dearest saying..."I just called to tell you I"m sending you Tim." hang up! Dave was more than generous in helping them but, it didn't always work out. We decided our own children were top priority. My older brother managed to get into the Marines. The younger one was sent packing after we discovered he was dealing drugs out of our basement! Mom wasn't there to help him when he returned but sent him off to someone else. He's had a very difficult life and we are way out of touch.
    I guess the bottom line is, do what is best for you and your own children. You can't fix what's been broken.

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    1. That must have been quite frustrating and infuriating. A line has to be drawn somewhere, if the person requires the type of help and supervision you just can't provide.

      I agree that we should do what is best for our children. That is the promise we made when we agreed to bring another human into the world. It may be inconvenient and throw our carefully made plans into the dustbin. But, we must play it as it lies.

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  7. My late father had a friend whose teenage daughter became an unwed mother. She was apparently unfit to raise this child because he and his wife did it. At 16 the granddaughter also became an unwed mother. Do not know why but he and his wife were raising the great granddaughter. I don't believe he lived long enough to see the next generation.
    We all make decisions and live with the consequences.

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    1. That could not have been easy. But, I salute the familial dedication required to do what your dad's friend and his spouse did for two generations.

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  8. All three of our children have struggled financially, despite the frugal ways we taught them all their lives. Some of it has been their own fault, some not.

    Two of the three have long term chronic illnesses that will take their lives eventually (autoimmune diseases, etc.), but in the interim 'just' costs them a fortune in medical bills. Their spouses don't seem to understand much about how to budget or save and that adds another layer to their challenges.

    We've helped two of the three multiple times over the years so they could survive (although I always worried we were enabling instead of helping, so we tried not to unless it was dire). I don't know if that was the right decision or not. Perhaps if we'd helped sooner things could've been less dire when we did help? Wish I knew . . . *sigh*

    When we decided to retire last year we gave the third child a lump sum ($25,000) to try and make up to her for all we'd given the others over the years while she'd been taking care of herself. We don't know exactly how much we've given the other two over the years, but I'm fairly certain $25,000 was conservative. At that time we told them all the 'Family Bank' was closed and that we weren't going to help anymore as we need to take care of our own needs. Since then we've made small loans to the two needy ones, but they've paid us back promptly.

    My husband and I have been very careful over the years and saved nearly 20% of our income for several years. As a result, we have nearly a million dollars in investments and it should be sufficient to provide for all the years ahead we hope to have. (We're both 63, have diabetes and other various and sundry medical issues.) Between my husband's pension and Social Security we're able to live comfortably on our income and only take money out of the investments for big projects or travel.

    I worry that we're just selfish and should 'share the wealth' more with the kids, even though I'm scared to death of being incapacitated in some way in the future and I absolutely NEVER want to be a burden to them. We have long term care insurance and life insurance, so hopefully that won't happen.

    My 90 year old mother (who's still in perfect health) has only SS for income ($1100 per month) and has had to live with us the last three years. That's hard because she's not a very loving person and has a lot of eccentricities. I have 10 siblings that ought to help, but they don't, it's essentially me and one sister. But I'm not bitter. LOL It begs the question, though: When you're old and need help, will your children be willing to help you? If you haven't provided for yourself you've left yourself to their mercy (or lack thereof).

    The balancing act of helping is deeply nuanced and there aren't any easy answers. I don't know if we're doing the right thing. I do, however, think it's important not to mortgage our future for young people. We had a lot of lean years and had to figure out how to make it when times were tough. They need to learn how to do that, too, as much as possible.

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    1. What a tremendous story about the difficulties this subject raises. I think you have hit every button about helping kids when in need, being supportive, trying to keep things "balanced" with your third daughter, all while protecting your retirement years, and taking over the housing and eventual care of your mom.

      You have made it quite clear that this is a constantly evolving set of decisions and reactions. I deeply appreciate you sharing so much and can only wish you and your family the very best.

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  9. Interesting topic! We grew up knowing we needed to figure out a way to support ourselves (or "paddle your own canoe", as my father famously said), but we also saw my dad loan money to siblings and in-laws that got into tough financial straits. All of us have done pretty well for ourselves, and we've also taken one another in for short periods when we were young and needed a place for short periods of time.

    My kids knew we would help with college but they were expected to work and pay part of it themselves. They also knew that advanced degrees would be their responsibility. They worked between degrees, and we helped with moving, random expenses, etc. One of them moved home for six months while job hunting, but they know we expect them to "paddle their own canoe", too. ;-) That said, if any of them were in really dire straits, I'm sure we'd help them as we have in the past.

    The guy who is shorting his retirement to pay for his daughter's education is a toughie. I'm not sure I would be comfortable doing that, and it makes me glad I had my kids younger so they were all launched before I got near retirement. Times are definitely changing, and I'm not sure how I would manage that one.

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    1. Yes, that is a dilemma I am glad I didn't face. I would have probably done the same thing he did: help the child first and worry about the consequences later. That said, would there be any lingering negative feelings from either daughter or parents? Hard to say.

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  10. Another great article Bob! I just got back from doing a little research on stress and retirement in Italy and what struck me was how much family members cared for and helped one another something sadly we have gotten away from back home. Personally I believe in the safe harbor principle when it comes to my family. They can come stay if something happens. I also believe in helping them out financially when they need it vs them waiting till I finally roll over but the expectation is that they would come to the table in time of need for my wife or I as we age. Life is tougher than it has ever been and I'm worried that stress will get to our kids. I'm willing to do whatever it takes to make sure they get through it best they can.

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    1. I am there with you. We plan on a decent inheritance for each daughter, but have started to give them some of the anticipated money at the end of each year. One daughter has three kids between 9 and 13, so their needs are now. The other daughter has a job she loves but its pay is less than ideal. Again, she can use some help now rather than 10-20 years in the future. But, my wife and I know that either, or both, girls would be there for us if the need arises.

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  11. My wife and I have 3 adult sons who have lived with us as adults each at one point in time or another. A few years ago when our youngest son completed college and moved back home for his job hunt, our oldest and middle sons were also living with us cost free. My wife and I quickly determined that we would not be instilling good money management and work ethics with our children if they were to continue living with us for free. In September 2017, we sat down with all 3 of them (in their mid and late 20s) and told them they would have to start paying their portion of the costs of living with us. These costs including housing, property taxes, homeowners insurance, all utilities, internet, cell phones, food, etc. I had been tracking all our spending for over a year and was able to determine the cost per person to live at our house. We have a few house rules everyone living here must follow like keeping common areas picked and cleaned up, taking trash out, etc. We cook most meals at home and if the kids want to eat what we cook they can as they are paying for their portion of the food. We do NOT do their laundry or pay their car or insurance bills. We try to treat them like tenants versus children and so far it has worked out really well. Two of the three sons stayed with us and gladly paid the costs each month and one moved out to live with a friend. Our youngest son moved out a year ago into his own apartment even though it costs him 2X what his costs were living with us. The middle son ended up moving back in 6 months ago after his roommate situation changed and he is paying us his portion of costs. We tried to get our 2 sons living here to move out into an apartment together but our oldest son did not want to. He lived out on his own with roommates for several years before he had a bad breakup with his ex girlfriend and moved back home. We kind of like having at least one of the kids here. They pay their share of the costs and we usually have someone at home all the time (oldest son works evenings). We are blessed to have a fairly large home that would be way too big for just my wife and I. We kind of like the concept of multi-generational living for several of the reasons listed in other comments on this article. Sharing a house saves everyone quite a bit of money, and we get to see our sons often. Our youngest son comes home every 2 weeks to wash his clothes. He could easily afford a washer and dryer but does not want them (I think he likes to come home and see his old man). I see nothing wrong with having a multi-generational home so long as everyone who can contributes to its costs. We want to instill into our children the importance of not only financial responsibility, but also the importance of taking care of family and friends when truly needed and pray that they will return the favor to us when we need their help. I have shared all of our financials with all three children knowing one day whatever we have left with be divided among them. I had to help take care of my mom before she passed away and understand the importance of having knowledge of your parents finances and investments, so I want to be sure our sons are kept of to date with this info about us should something untimely happen to one or both of us.

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    1. You and your wife could have written part of this post! You have lived the adult children-home, not home, home story as well as anyone.

      One thing that is important to point out in your story is the obvious good relationship you have with your kids. That doesn't always happen in today's world. To be close to your children and have both them and you enjoy each other's company is a real blessing. We have the same close tie with our kids - it makes all the difference in the world to enjoying a satisfying retirement.

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  12. I have confronted this exact issue this year. I can see that gestures I thought at the time were helpful only helped to set up part of the current situation which has left one child unprepared to handle the curveball that life threw this year. Wisdom of hindsight!! A variation on this issue occurs when one child needs help and another is lighting the world on fire with success. How do you keep things even and fair? Still working on that one!

    One thing I can say for sure -- I don't know as much as I once thought I did!

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    1. We took one step this year in regards to the fairness question. Betty and I promised to donate a certain sum of money to each of the three grandchildren when they go off to college, or whatever their choice after high school.

      Our youngest daughter likes her freedom, space, and job too much to probably ever marry. That means she wouldn't "qualify" for college aid for kids. So, we gave her a sum equal to one grandchild's share to her this year to spend/save as she chooses. That seemed fair to both us and her.

      Hindsight is pretty much 20/20, isn't it.

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  13. We have 2 adult sons - Elder is very successful in auto business and younger is barely getting by. Elder son lives 5 minutes away and has more need of our physical presence, helping with a disabled child while younger lives 35 minutes away and we help keep his vehicles on the road. Both understand that as we approach and move through our 70's, we are more physically challenged to help with granddaughter and more needful of stretching our retirement funds so that we aren't depending on them! The balance seems to be holding. We've always based our actions on the philosophy of "start where you are, use what you've got, and do what you can."

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    1. We do what me must to be true to our personal commitments and values. Isn't it great you are able to help both kids and keep your own future in view.

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  14. I think one of the keys, as it often is, is having a plan and communicating it early. This doesn't help for unexpected situations like sudden job loss or illness, but it has worked for us for education funding and job search time.

    We have two sons. Before they started university, we told both that we would help fund their undergrad degrees. Anything beyond that was on them. They readily agreed. One is finishing his masters degree. He is fortunate to have a job as a university teaching assistant in his field, which pays enough to cover all of his expenses.

    The other son just finished an additional four year professional degree, which has left him with a sizable chunk of student loan debt. He is now living at home with us and working part time while he studies for a big board licensing exam. We have told him that he is welcome here during this time at our expense. However, we have also said that if he gets local full time work in his field (the prospects are good and it pays well), he can continue to live here but will need to pay us just enough to cover our expenses in having him here each month. That should allow him to save a considerable amount compared to paying market rent or a mortgage and other living expenses, and he can put those savings towards his debt. We have not put a firm timeline on that, but have indicated it will not be indefinite. Again, he is fully on board. He is grateful for this time, but does not want to be here forever. We feel the same way!

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    1. We made the same sort of arrangement with our younger daughter who just moved out after being in our home for 7 months. She contributed to the extra expenses, but was able to pay off some bills and save more than she normally would for the future. Constant communication kept us all on the same page.

      We are very happy we could help, but just as pleased she is in an apartment she loves about 15 minutes away, while we have our empty next back.

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  15. My youngest son lived with us for a year after completing his degree, then went back to school to obtain a professional certification, during which time he lived with my daughter and her family, and then he spent another year with us while trying to find a permanent job in his field. During the year with his sister and the last year with us, he paid his share of the groceries. It was great having him here, and he helped out with yard work, cooking, etc. For the last year and half, he has been out on his own, sharing an apartment with a roommate, and he loves it. One of my daughters works in the gig economy, and has really struggled financially. I have helped her out financially many times over the last ten years. With my other daughter, my help has more often been in the form of looking after our grandkids on an occasional basis as needed. For example, we had them with us for eight days recently while my daughter and husband were on a work-related trip. I’ve also given them small gifts of money, for example for the children’s future education. We have also helped out Rob’s two kids in various ways over the years. I also have a sibling that has needed financial help several times (because of a health issue that limits his ability to work).

    Rob and I are fortunate to be able to have a comfortable retirement, because we both worked very hard in our careers and saved for retirement. In choosing a retirement home, we intentionally bought one that is bigger than we need for the two of us that has a potential suite downstairs so that we are able out family members as needed. Or perhaps when we are elderly, one of them will move in and we’ll move down to the suite. It definitely is a balance, deciding how to much of our savings to hang onto to cover future costs as we age, and how much to use to help out the kids (and other family members) now.

    Jude

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