The Surprising Reason 50% of Parents Risk a Retirement Savings Shortfall
- - The Surprising Reason 50% of Parents Risk a Retirement Savings Shortfall
Maurie Backman, The Motley FoolDecember 27, 2025 at 5:56 PM
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Key Points -
Data shows that a large percentage of parents help financially support their grown kids.
Some working parents are giving their grown kids more money each month than they're putting into their retirement savings.
You shouldn't let your desire to help your kids get in the way of your own financial security.
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Being a parent is not an easy thing, since it means making a lifelong commitment to caring for and supporting your children. At some point, though, that support tends to become more emotional than logistical.
After all, when your kids are grown and out of the house, you're not going to be standing over them at dinnertime making sure they eat their vegetables before having dessert. And you're not going to be the one throwing a jacket at them as they leave the house on a 30-degree day.
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But you may be the first person they call when something goes awry at work, or when they find themselves deep in the throes of a crisis.
You may also end up offering your grown kids financial support at some point in time. Savings.com reports that 50% of parents with adult children provide regular financial support to them. But some parents may be helping their grown kids financially to their own detriment.
Are you sacrificing your retirement to help your grown kids?
Savings.com says that among parents who provide financial support to grown kids, the average monthly amount given out is $1,474 monthly. Meanwhile, among parents who are still working, the average amount of monthly financial support they give their adult kids is $1,589. But the average monthly amount working parents contribute to their retirement savings is $673.
It's one thing to help a grown child financially if you're already retired with more than enough money to cover your expenses. But 79% of parents supporting adult children worry about setting themselves up for a comfortable retirement. And therein lies the problem.
Once you retire, your primary income streams may be Social Security benefits and withdrawals from your personal savings. Social Security's average retirement benefit today, meanwhile, is just over $2,000 a month. That's a $24,000 annual income.
Even if you manage to save enough money to match your benefits, that's an annual income of $48,000, which also may not be enough. So if that's the case, you should absolutely be prioritizing your IRA or 401(k) over helping your adult kids -- not the other way around.
It's also important to manage your money carefully if you're already in retirement. You may have a decent nest egg and a generous monthly Social Security benefit to enjoy. But you could run into a series of expensive healthcare issues or home repairs. Or, you could end up needing long-term care. The more money you give your grown kids, the less you'll have to address these needs of yours.
It's important to set boundaries
It's natural to want to help a grown child of yours financially. And if you have the means, that's a great thing to do.
But before you give your grown child any money, ask yourself:
Am I on track with my retirement savings?
Do I really have enough income each month left over to comfortably spare?
Am I pushing aside a need of mine to give this financial support?
There may be other ways you can help out a grown child without shorting yourself on contributions to your own savings.
You could, for example, offer them a room in your home rent-free for a year while they work on boosting their wages. Or, if there are grandchildren in the mix and you're retired, you could offer child care a couple of days a week to reduce that expense.
But be very careful handing over money you need for your own financial security. You don't want to go overboard on helping your grown kids to the point where you end up scrambling to pay your own bills.
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