Financial risks of supporting adult children, according to experts
By some measures, Generation Z is the segment most affected by the economic crisis.
Although young adults are more likely to have a college degree and work full-time compared to their parents at this age, this combination also comes with larger student loan balances, which has proven to be a significant hurdle for startups.
At the same time, prices for goods and services continue to rise and wages cannot keep up with rising daily expenses. According to a new analysis by , average weekly earnings increased by 38% between 2017 and 2025, while rents increased by 50%. Urban Institute.
Americans are struggling with higher costs, but nearly half, or 49%, of adults ages 18 to 29 have delayed or skipped medical care; This rate is higher than other age groups. Century Foundation. Additionally, this group is more likely to skip a meal due to financial constraints or draw on their savings to make ends meet.
The City College of New York graduate takes a selfie during the school’s commencement ceremony.
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Largely due to economic pressures, fewer young adults are making it on their own.
Some other research shows that nearly half of parents (a record high) are stepping in to help these days, including paying basic monthly expenses like food, utilities and rent.
The share of young adults living at home peaked during the pandemic, then fell and is on the rise again, according to data from the U.S. Census Bureau. Roughly 1 in 3 2025 Census data shows that the proportion of adults ages 18 to 34 living with their parents in the U.S. increased slightly from the previous year.
‘Cycle of addiction’
But he said “this can also create a cycle of dependency” for children who become dependent on these funds. “This is something we talk about with our customers,” he added. “In many cases, recipients of sizeable gifts are dependent on it; it creates an expectation and a dependency.”
Still, many parents may not have the financial resources to support their children into their 30s, especially “for a couple retiring on a fixed income,” Long added.
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another one Ameriprise Financial researchThe research, which surveyed more than 3,000 parents last year, found that 98 percent of parents said they would let their children live with them after they turn 21, but financial support doesn’t stop there.
Beyond providing housing, parents fund their children well into adulthood, Ameriprise finds.
About 63% of parents pay ongoing expenses, such as phone bills, for children over the age of 21. Nearly half, or 45%, pay for health insurance for their adult children until age 26 or the legal age limit, and 33% contribute to their children’s education outside of college, including graduate school.
“Parents are watching their adult children navigate the evolving economic realities of the post-pandemic era, and it’s understandable that they want to step in and help their children build a solid financial foundation,” Deana Healy, vice president of financial planning and advice at Ameriprise, said in a statement. he said.
According to the survey, 65 percent of parents believed they would still have enough money to retire comfortably, but 36 percent were concerned that providing financial support to their adult children would affect their plans.
“Parents should be mindful of how the choices they make to support their adult children now and in the future affect their own goals, especially regarding retirement,” Healy said.
Avity’s Long recommends incorporating this support into a comprehensive financial plan. “We advise our customers to make gifts to their children through the gift tax exemption,” he said. “This ensures that someone gets paid and also provides a nice estate planning angle for the parents.” The annual exclusion for gifts in 2026 is $19,000.
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