Some Parents Are Giving Their Adult Children 3 Times as Much Money as They're Putting Into Their Retirement Accounts

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  • It's a great thing to support your adult kids financially if you can do so while maxing out your retirement savings. 
  • If you support your grown kids at the expense of your IRA or 401(k), you might end up short on cash once your career wraps up.

The U.S. Department of Agriculture says middle-income families should expect to spend $233,610 to raise a child through age 17. That data hasn't been updated since 2017, so if we were to adjust that $233,610 for inflation, it would easily be higher.

But it's not like parents suddenly cut off financial support once their kids reach their 18th birthdays. In fact, data from reveals that 45% of parents pay for their children's expenses in adulthood, too. That, however, is a move that could end up putting your retirement at risk.

Your nest egg should take priority

It's easy to see why many parents end up in a position where they're asked to support their adult children, or feel compelled to. First, there's the whole wanting to look out for your kids factor. But also, let's say you're further along in your career and are earning a decent salary. You may want to help out your 20-something child who's only bringing home an entry-level salary and can barely afford their rent or mortgage payment.

That's understandable. And if you're in a good place financially -- one where you're maxing out your IRA or 401(k) and then some -- then by all means, help your grown kids. But one thing you don't want to do is short your retirement savings in order to help your adult children financially. If you do that, you might end up low on retirement funds by the time your career wraps up. found that parents who plan to retire in the next decade contribute an average of $643 per month to their retirement accounts. But they also spend more than $2,100 to support their grown children. That's a huge difference. 

Now, imagine that your IRA or 401(k) could use some work, only instead of contributing around $2,700 a month to your savings to play catch up, you're instead writing your grown kids a $2,100 monthly check. That could easily lead to a scenario where you retire and have to make serious cutbacks due to a lack of savings. And in a worst-case scenario, you might even have to, at that point, ask your grown kids to help you out financially, which is probably not what you want.

Put your own needs first

As a parent, you may be wired to give your kids everything. But you know how you're supposed to put on your own oxygen mask first when you're flying and there's a drop in cabin pressure? Well, that concept applies here, too. And it does not, by any means, make you a bad parent. If anything, it makes you a sensible parent who recognizes the importance of ensuring that your long-term financial needs are covered. 

In fact, prioritizing your nest egg actually sets a good example for your kids. So while it's definitely a nice thing to help your grown children as much as you can, make sure you're not doing so to the detriment of your own retirement.

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