A lot of millennials still depend on financial help from their families, potentially draining the retirement savings of many boomer parents, a new survey indicates.
Conducted on behalf of Country Financial, an insurance and financial services company, the survey of 1,003 U.S. adults found that 53 percent of Americans between the ages of 21 and 37 have received some form of financial aid as a grownup from a parent, guardian or other family member. Of those, 37 percent have received support monthly and 59 percent have gotten assistance a couple of times a year.
Of those who have been helped, 41 percent used the money to cover cellphone bills and 40 percent to pay for rent. Many have also received cash for everyday expenses, such as groceries and gas (32 percent), health insurance (32 percent), auto insurance (28 percent), and student loan debt or college expenses (25 percent).
Boomer parents should be careful not to endanger their own financial future by contributing to their adult offspring, warned Troy Frerichs, Country Financial’s director of wealth management and financial planning.
“If you’re in or near retirement, be prudent during this time,” Frerichs said via email. “Your retirement savings won’t last forever, and people are living a lot longer, so depleting your savings could be a risky move. Others may experience unexpected costs related to health issues. If you feel the need to support your adult children, remember to get back to your savings plan, because you have a shorter window of opportunity to build your retirement funds back up.”
Many millennials are supported in the form of room and board, too, he noted. "Adult children moving back home doesn't have to be a bad thing, as long as there are financial goals in place," Frerichs advised. "Take simple steps to encourage your child to stay on track with paying off debt and savings."