When adulthood arrives, most kids flee the family nest, eager to take off on their own journey to independence. Thanks to a difficult economy, however, many of today’s millennials are still financially tethered to dear ol’ Mom and Dad — and it’s hurting their parents’ bottom line, too.
Read on to see just how much boomers are losing each year to their millennial children — and what could turn the tide.
Boomers Are Losing on Average $11,011 Yearly to Their Millennial Kids
According to a 2017 study by TD Ameritrade, on average, millennial parents ages 19 to 37 said they received $11,011 in financial support and unpaid labor from their boomer parents, ages 50 to 70. Without that help, many millennials couldn’t support their current lifestyles, the survey found. While boomers are investing in their kids, they’re making a mistake by not saving for their own futures.
No. 1 Money Culprit: Unpaid Childcare and Household Help
According to the study, the millennials reported the biggest chunk of support they received in the past year — to the tune of $8,684 — didn’t even come in the form of cash. Rather, it was help with child care or running the household.
On average, boomer grandparents provided 14.3 hours of primary child care per week and 9.2 hours of backup care or babysitting. Although many grandparents are more than happy to spend time with their newest little family members, they need to keep in mind that all that unpaid labor could be affecting their ability to retire.
No. 2 Money Culprit: Helping Kids Pay the Bills
There’s no secret that living isn’t cheap — so many millennial parents are turning to their own mom and dad to help them take care of a few of their line items each month. Boomer parents said that they provided their children with $4,527, on average, in the past year. Nearly a quarter of millennials said their parents help them pay for groceries — to the tune of $898 last year — and almost 20 percent of millennials said their parents help them pay their phone bills, with an average of $547 last year.
To save money, millennials can live in cities where the cost of living is lower and assistance isn’t necessary.
No. 3 Money Culprit: Student Debt Drama
Millennials are facing more student debt than any generation previously — and parents are shouldering some of that burden, too. The survey found that 12 percent of millennials said they got help making student loan payments last year — but boomer parents need to be careful with their spending, since many of them are also trying to pay down their own expenses simultaneously. Parents should know there are creative ways to pay for college.
Bottom Line: Develop a Plan
Most of the boomer respondents said that helping their millennial children financially wasn’t a burden. Nevertheless, they should still create a plan to stay afloat throughout retirement.
Staying in the job market longer will help boomers to accrue larger retirement nest eggs. Downsizing to a smaller home frees up more cash.
The key is simple: Plan ahead for the future, so the tables won’t get turned and boomers won’t be forced to rely on their millennial children to support them someday.
Click through to read more about millennials and their financial expectations.