You love your adult kids. But do you adore them enough to give them financial help that puts your own retirement in jeopardy?

No doubt, times are tough financially for the younger generation. Housing costs are high. Student loans crimp cash flow. And inflation means many necessities cost more.

The result: many adult kids are turning to the “Bank of Mom & Dad” for help.

Banking On The Parents

Many parents are shelling out big bucks each month to help their kids make ends meet, according to a recent survey from TopResume. How much? One in five parents spends $1,000 to $2,499 each month on their kids with college degrees. And one in seven forks over more than $2,500. These sizable added monthly costs “rival a second mortgage,” TopResume says.

Indeed, a 2025 Savings.com report said the average amount parents spend on adult children to keep them afloat hit a three-year high of $1,474 a month — or nearly $18,000 a year. It was the first time in the four years Savings.com has issued this report that half of parents with adult kids said they provide regular financial assistance. That’s up from 47% in 2024 and 45% in 2023.

The type of parental support ranges from basics like groceries, cellphones and health care to bigger commitments like helping with the rent or mortgage, paying for grad school tuition or covering car and student loan payments, according to Savings.com.

It’s the bigger-ticket items that hurt the most. Nearly half (45%) of parents help with tuition, to the tune of $1,198 a month, on average. And 63% say helping out with rent or the mortgage costs $653 a month.

Your Kids Or Your Future?

But what’s good for your grown kids may not be good for your golden years.

Working parents who support grown kids contribute two times more money each month to their adult children than they do to retirement funds, according to the Savings.com report.

That’s a big chunk of change coming out of your checking account each month. That’s especially true if money is already tight and your odds of a secure retirement are already touch and go.

So, you have to think long and hard before opening up your checkbook to help your kids out.

“The real gist of this is you have to seriously look at your own financial position first and whether or not you can afford to do this,” said Kelly LaVigne, vice president of consumer insights at Allianz Life.

Parents Need Money, Too

No doubt, parents are feeling the financial pinch. Seven in 10 parents (71%) admit the extra money going out the door each month has negatively affected their own finances, TopResume found. Some parents say they have had to delay their own retirement or cut their own spending due to the cash flow crunch.

Similarly, nearly eight of 10 parents who provide support to adult children “worry about setting themselves up for a comfortable retirement,” Savings.com found.

The question is: Can parents be too generous when it comes to helping adult kids in their 20s, 30s and 40s?

The answer is yes, says Lisa Featherngill, senior vice president and national director of wealth planning at Comerica Wealth.

Too Giving?

When does generosity become a problem for the parent?

“If it affects their own financial well-being in the future,” said Featherngill, a parent that’s assisting with housing costs for a son who recently graduated from college.

Some of the telltale signs of trouble when paying grown kids’ bills include parents who underfund their own retirement savings as a result, says Featherngill. Another red flag is parents who start struggling to meet their budget. Other warning signs are when parents have to cut back on their own lifestyle or work longer.

The big one? “Not having enough money to last the rest of your life,” said Featherngill,

Take A Look At Your Situation

Featherngill advises parents who are helping their kids financially to look closely at how those expenditures are impacting their budget, savings, debt and retirement plan.

If you want to help your kids for whatever reason, it is vital to define the scope of the financial assistance, says Featherngill. That means putting a dollar amount on it, an end-date on it and specifying what the money can be used for.

“Be specific about how you’re going to help and how much you will pay and for how long,” said Featherngill. “Otherwise, it’s an open checkbook.”

No doubt, making your adult child meet certain conditions before you agree to give them money is key.

In fact, more than three quarters (77%) of supportive parents attach conditions to their financial help, according to the Savings.com study.

For example, 48% of parents responding to the Savings.com survey said the adult child must maintain a job or be actively looking for a job to receive financial assistance. For adult children still living at home, 26% of parents said they must contribute to household expenses. And two of 10 parents (21%) said their older children must achieve certain financial goals, such as following a budget or saving a certain amount each month.

Measure The Situation

To measure the financial hit more accurately, it’s vital to determine if the assistance is a one-off situation or if it’s going to be ongoing, says Bruce Maginn, a financial advisor at Solomon Financial.

“If it’s ongoing, how will it impact the parents’ cash flow situation” is a key question to ask, said Maginn. “Most people are teetering on having enough money saved for retirement to begin with.”

Too big an amount going out each month on an open-ended basis can be too much of a burden to overcome.

The risk: “If you have to provide an extra $1,000 a month in the form of a financial lifeline to an adult child, it can wreck your retirement,” said Maginn.

“You’ve got to put an end date on it,” he said. “Whether that’s getting through (grad school) or paying off a car when the loan is up in three years.”

Four of 10 parents responding to the Savings.com survey, for example, said they plan to cut off funds in the next two years.

Ways To Help

One general rule of thumb to give you an idea if your generosity is too much is to make sure that the algorithms that predict the odds of your retirement success don’t drop below 85%.

“That still give you a five in six chance that things will work out,” said Maginn.

One strategy to consider is to wean the adult child from money assistance over time, Featherngill says. If you’re paying $1,500 a month for your adult child’s mortgage this year, for example, make clear that next year the dollar amount falls to $1,000 a month. And the year after that it drops to $750 and the year after that it goes to $500.

“Then let them know they are on their own,” said Featherngill. “This gives them advance warning and time to factor it into their budget.”

Prioritize Your Own Retirement

You’ve got to think of yourself first. Your adult kids have time on their side to catch up on savings or years of earning power ahead of them. Most parents nearing retirement don’t have that luxury. The earning years may be nearing an end or are already over. And there’s only so much money in retirement accounts and other savings accounts to last a lifetime.

A key starting point is to ask yourself: What is the long-term impact on me by helping an adult child?

You want to make sure that helping out doesn’t cause you to fall behind, forcing you to pray for a bull market to bail you out or having to increase the risk and aggressiveness of your portfolio to make up the difference. “That’s probably not the right thing to do,” said LaVigne.

Decide What Type Of Support Makes Sense

Just like there’s so-called good debt versus bad debt (like high-interest credit card debt), there are some things worth helping out with more than others.

Chipping in some money for a down payment on a home, for example, is better than handing over a few thousand dollars for your adult child to go on a ski trip. It’s also prudent to assist with health insurance, as the money you pitch in can help your child avoid a medical event that could prove catastrophic to his or her finances forever.

Don’t Downplay The Risks

Making regular payments to your adult kids means you can’t put the money to work in investments with the potential to grow, says Maginn. It’s like yanking the money out of the stock market when volatility picks up and never getting back in to benefit from the market rebound. Doing this means you miss out on your money benefiting from compounding.

Let’s say you give $1,000 a month for a year to your adult child instead of investing the money in an S&P 500 index fund. Since investments in the stock market have historically earned around 10% per year, that means your initial investment doubles every few years. So, giving your adult daughter $12,000 in 2025 means you miss out on growing that money to $24,000 by 2032, and $48,000 by 2039 and $96,000 by 2046, Maginn explains.

So, what looks like a puny $1,000 a month helping hand this year can equate to a reduction of nearly $100,000 in your retirement account over the next 20 years.

“You’re never going to see that money come back,” said Maginn.

See If You Can Help Without Giving Money

Look for ways to help support your adult children that doesn’t involve you writing a check.

That could include things like mentoring your adult children about good financial habits, such as budgeting and saving for retirement. It also means explaining the downside of carrying debt, whether it be credit cards, car loans or a mortgage, says Maginn.

You can also advise them on strategies to make their current weak financial position stronger. That could include refinancing debt to a lower interest rate, Maginn says. Also, rejiggering a W-4 to make sure your adult child is getting all the pay they can per paycheck without giving the IRS an interest-free loan and waiting for a tax refund.

“Maybe taking steps like that can put $250 more per month in your adult child’s paycheck,” said Maginn.

Solutions Are Out There

And, by all means, seek solutions that reduce the need to pull money from your own retirement accounts. “You are likely better off refinancing your mortgage to help pay for your adult child’s whatever rather than taking a distribution from your retirement account,” said LaVigne. Pulling from your traditional 401(k) to help results in a tax hit due to higher income plus your money can’t grow if it’s been withdrawn from the retirement account.

The bottom line: think creatively to help out without writing a check if possible.

Ask yourself, “Is there a way for you to help your (adult child) without becoming the main supplier of the income,” said LaVigne.