PenPenWrites

Retirement looms for many of us as a signifier of our status as a mature person with wisdom to share and time to spare. Or it’s a tantalizing adventure we look forward to. But if we give up our day jobs and our kids need financial help–to, say, buy a house, pay for groceries or cover child care costs–does the Bank of Mom and Dad have the wherewithal to help?

It’s a pretty open question. First, a Pew research survey from this past November addresses the question of how we are feeling about our finances as we age. No judgments here; just the facts:

• Amid a dwindling Social Security retirement trust and increased national life expectancy, many of us are uncertain about our financial future and how solid the Bank of Mom and Dad is.
• Four-in-ten U.S. adults say they aren’t confident they’ll have enough income and assets to last throughout their retirement years or say they won’t be able to retire at all. Only about a quarter of us are very confident that the income and assets in our Bank are solid.
• Older adults are the most confident about their finances in retirement. Fewer than half of us in our 60s and 70s are highly confident, compared with 50% of us in our 80s and older.

Meanwhile, a lot of us are in support mode.

• In an AARP survey, 75% of parents said they were providing some financial assistance to at least one adult child (age 18+).
• How much are we providing? A Savings.com survey found the average support per adult child is $1,474 a month, roughly 6% higher than last year.
• Another survey by Ameriprise Financial found that 63% of parents cover ongoing expenses for children 21+, with 76% helping with big one-time expenses, and 36% worrying about the impact on their retirement.

What are we helping our kids with? Here’s where the money goes (according to the surveys):

• buying groceries,
• paying for a cellphone plan,
• covering health and auto insurance
• subsidizing rent
• buying a car
• tuition and education expenses
• credit cards
• investments

One last stat: More than three-quarters of supportive parents follow banker rules, that is they attach conditions to their financial assistance. The rest give money without any conditions. That stat raises the question of loan versus gift. It’s a topic I’ve written about in several posts, including this and this post.

painting credit: “The Banker and his Wife” by Marinus van Reymerswaele