Family Dynamics, Part 2: Supporting Adult Children

As I mentioned in my last post, I’ve been thinking about various ways that complex family dynamics can affect one’s own finances, especially when we’re in or headed toward the retirement years. Today’s topic is about having adult children on the “family payroll,” long after one might have assumed they’d be completely independent.

A 2024 study published by the Pew Research Center reported that about one-third of young adults (ages 18-34) still live with their parents and that about 55% of American parents provide varying degrees of financial assistance or support to their young adult children. There are a lot of factors that contribute to this finding, such as the high cost of housing and education as well as setbacks caused by the 2008-09 recession (for Millennials in particular) and the pandemic (for Gen Z).

For the sake of narrowing this discussion, let’s exclude the following fact patterns:

1. The young adult is in college and the parents are paying all or some of their expenses.
2. The young adult is physically or mentally disabled and for that reason will never be financially independent.
3. The family has cultural or religious beliefs that lead young adult children to continue living with their parents, until or sometimes even after they’re married.

Instead, let’s focus on young adults who are not still in college, who are seemingly capable of earning a living, and whose family/cultural norms do not dictate their continuing to live at home.

Obviously, those of us who are parents want our adult children to be independent, self-sufficient, thriving, and happy. We want that for their best interests and we want it for our own financial well-being. Few of us signed up to support our children for a lifetime, and most of us can’t afford to do so. But what happens when those adult children can’t or won’t become independent?

It’s easy enough to talk about boundaries or “tough love,” but some situations are not as obvious as they might seem to outsiders. In observing my own family and those of my friends, there can be a long continuum between someone who truly has special needs and must be cared for and someone who is “adulting” with competence and excellence. Many young adults struggle with mental and emotional health issues that can sap their energy for getting an education, earning a living, and being completely self-supporting. Especially if they perceive that their parents have the means to help them, it can be hard for them to accept that they can or should take complete responsibility for themselves, especially in a world with high costs and a challenging employment landscape.

Two of my acquaintances, both younger than I am, have young adult (20s) sons who were not able (in one case) or willing (in the other) to complete college. Both moms have allowed their sons to continue living at home but require them to work to pay their own personal expenses. One of them actually charges her son a modest rent–but (unbeknownst to the son) is putting that rent money into a high-interest savings account to give him a boost once he finally does move out. That is one way to handle things.

If the young adult living at home with their parents isn’t a good option for the family, parents might choose to help with specific expenses–keeping the child’s cell phone on the family plan, or paying their health insurance premium, to give a couple of examples–but only on the condition that the child is making a good faith effort to work and earn money. And if the parents are financially involved in the adult child’s life, they should, in my opinion, be able to demand that the young adult “open the books” or share their budget, for accountability.  But I’m here to tell you that these conversations can be very, very fraught.

As I’ve shared in my writing here before, one of my adult daughters went through a very rough period starting in 2022 that included her being seriously injured twice in car accidents just 14 months apart. This set her financial independence back a great deal as she recovered physically and emotionally from the accidents. Thankfully, she didn’t sustain any permanent or life-altering injuries, but it took her awhile to get back on her feet (literally, in the case of the second accident–she had a badly broken ankle and was not allowed to be weight-bearing for five months and was in a boot for seven–but also mentally). Now she has a new job and things are stabilizing financially for her.

We provided a lot of financial support during this period. Both of us were working and had disposable income, and we could afford to do so, though our long-term savings goals took a hit. Over the past year or so, as she’s been (mostly) physically recovered but slow to return to work, we’ve struggled with when and how hard we should push her, especially given my imminent retirement date. On the one hand, yes, of course we should expect her to be mostly independent by now, but on the other–she has been through a tough patch. So, at least for us, it hasn’t always been obvious how to proceed through this.

I suspect that such issues tend to be very case-specific: It depends on the adult child and their circumstances, on the parents’ ability and willingness to help out, and on the larger family dynamics–for example, would it work for the family for the adult child to live at home, and if so, for how long, how do other siblings (if applicable) feel about the situation, and so forth. I’ve found that it’s easy for people outside the immediate family to judge without knowing all of the ins and outs. And this issue touches on a lot of tender spots, for both parents and adult children, about the larger relationship.

It all affects one’s own financial well-being. But it’s not always easy to navigate.