Current estimates show that Americans give an estimated $500 billion to their adult children every year; call it the Bank of Mom and Dad. Some of it is deliberate, like a check to help with a down payment or paying for a wedding. A lot of it isn't. It's the family cell phone plan that everyone still uses or flying everyone home for the holidays because it matters to you that the family is together. Maybe it’s absorbing a credit card balance because watching your kid pay 24% interest is genuinely painful.
This summer, with student loan payments kicking back in for people who were enrolled in the now-defunct SAVE plan, things are about to get even more expensive. This, layered on top of what groceries, gas and general life costs. Of course you want to help your kids! None of this is a character flaw. It's what parents do. But if you've never added it up, you might be surprised at how it impacts your retirement plan.
Remember what your 20s looked like
It's natural to want your kids to continue enjoying the standard of living they had growing up in your household. However, that may not be realistic for them to continue upon achieving independence, depending on where they live and the career they've chosen. Think back to your own 20s. The apartment, the car, the way you ate. There is probably a huge gap between that life and the one have now; it’s totally normal, and it closes over time. Helping your kids skip it entirely is generous — but it can come with a cost you may not be able to bear.
What it actually adds up to
Consider a parent who helps each of three kids with roughly $50,000 over the years, whether it’s a wedding, down payment, a financial rough patch, etc. That's not extravagant by the standards of what things cost today. Add in the ongoing expenses that linger after kids technically leave the nest: everyone still on the same car insurance plan, family vacations funded year after year, helping out with new furniture or appliances.
Adding it up, it can easily reduce your retirement savings by hundreds of thousands over the years. If you're in your mid-50s and hoping to retire at 65, that gap doesn't just represent money, it may represent time. It might mean working until 70 instead of 65. We’re not saying don’t help your kids. We are simply saying that you need to make sure it’s part of your plan.
The most expensive kind of giving has no structure
The pattern tends to look the same across families: each individual decision makes sense in the moment, but no one is tracking the cumulative total or mapping it against the retirement plan. A $20,000 contribution to a down payment is a meaningful but manageable number. So is $30,000 toward a wedding. It's only when you stack them across kids and years, then add in the small recurring costs that compound quietly in the background. That’s when the real figure emerges.
The shift isn't from generous to less generous. It's from reactive to intentional. Deciding in advance what you're willing to give over a defined period, then treating it as a line item separate from your retirement savings, means you can keep giving without quietly borrowing from your own future. A family generosity budget sounds formal, but it's really just making a choice before circumstances make it for you.
It's also worth thinking about the form your help takes. A gift with a clear amount tends to be cleaner than an informal loan with an unclear repayment timeline. The loan feels more responsible, but when life gets complicated for your kid, the repayment conversation becomes its own kind of tax on the relationship.
Have you run this number?
If you've been helping your kids financially and you've never mapped the total against your retirement projections, that's the place to start. Not because the answer will necessarily require you to pull back, but because you deserve to make this choice deliberately. The families who give the most sustainably over time are usually the ones who decided what they were giving ahead of time, as part of their greater plan, rather than discovering it after the fact.
We are happy to help you find these numbers for your own family. Reach out to us today!