(KOLR 10) — Financial independence and the goal of making a healthy retirement a reality, an element of the American dream. But a new study shows half of American parents are putting their dreams aside and focusing on covering the costs of their adult children who are becoming increasingly dependent.
So, less money for retirement, more money to pay, cell phone bills, credit card and student loan debt, car expenses and health care costs, you name it. Financial experts say this pattern could have a large negative impact.
“You know these parents will be paying for four or five hundred dollars a month and over a year that could be six -thousand dollars in over a year that they’re paying and over 10-years…that’s 60-thousand dollars. You know if you invest that or compound that, that could be 100-thousand dollars. These parents are sacrificing for their retirement.”
Stephen Evans, with Evans Wealth Planning says we have a retirement crisis in this country. Not enough people have saved enough for retirement and maybe tapping what little they have to help support their kids.
“There’s a 78-percent difference between taking social security at 62 and 70, so if you take it early you could be sacrificing those future benefits that you need and you’re taking that money because you may need to help your kid,” Evans said.
Of the couples surveyed by Bankrate.com, 17-percent say they sacrifice their retirement savings “a lot” by helping their adult children and another 34 percent say they “somewhat” sacrifice their savings.
The survey found there is a generational divide when it comes to the issue. Millennials between the ages of 23 and 38 think parents should help cover some expenses until at the least the age of 23, whereas baby boomers, who are older, think young people should be weaned off their parent’s bank accounts much sooner.
Because parents want their kids to succeed, they have really sort of paradoxically messed up the process in trying to help them so much. what that has essentially taught kids is a learned helplessness.” commented Leslie Binder, LMFC, a licensed marriage and family counselor with Burrel Behavioral Health.
She recommends no matter how uncomfortable a parent or child may feel about the topic of finances, it should be discussed. “If goes unchecked it can really impact the entire family system ultimately,” Binder said.
KOLR 10’s Melanie Chapman went to MSU to talk to students about how much their parents help with the bills. By chance, we visited the campus while a senior seminar about paying off student loans was taking place.
“They help pay for car insurance and cellphone bills and stuff like that and then I work a job and try to pay for a majority the stuff on my own,” said MSU Senior, Joseph Masterson.
Masterson, says he hopes to be able to pay his own bills and be completely independent in a couple of months. He’s studying finance.
“I think it’s really interesting, now I really enjoy my classes and the sort of thing like they help me out, it makes me really want to do well and take school seriously, not just (to) mess around,” Chapman said. “Maybe help them out someday? Yeah, absolutely.”
There’s a strange twist to this growing trend while mom and dad continue to work, they could be taking the jobs of their children.