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Next Gen Econ > Debt > 6 Ways Adult Children Accidentally Drain Their Parents’ Retirement
Debt

6 Ways Adult Children Accidentally Drain Their Parents’ Retirement

NGEC By NGEC Last updated: August 20, 2025 4 Min Read
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Parents often want to support their children well into adulthood, but this generosity can come at a cost. Financial assistance may seem harmless at first, yet it can quickly erode long-term stability. With rising healthcare costs and longer lifespans, parents’ retirement savings need to stretch further than ever. Many adult children don’t realize that their requests for help can put their parents’ future at risk. Over time, these decisions can leave retirees financially vulnerable.

Housing Assistance

Helping adult children with housing is one of the most common drains on parents’ retirement savings. More than half of young adults in the U.S. live with their parents. Whether it’s co-signing a mortgage or letting children live rent-free, the financial strain adds up. While it may provide short-term relief, parents often absorb costs they cannot recoup.

Paying Student Debt

Student loan debt continues to be a burden for many young adults. Parents often step in to help, either by making monthly payments or taking out federal Parent PLUS loans. Americans over 60 owe more than $125 billion in student loans. This added debt can significantly reduce parent’s retirement savings and limit their ability to cover essential expenses later in life.

Covering Daily Living Expenses

Parents frequently help their adult children with everyday costs like groceries, gas, or cell phone bills. While each contribution may seem minor, the repeated expense drains savings over time. A CreditCards.com survey revealed that nearly half of parents help their adult children with bills. These small sacrifices can jeopardize the financial cushion parents need in retirement.

Emergency Financial Help

Unexpected medical bills, job loss, or car repairs often push parents to dip into retirement funds. While these situations may feel urgent, the long-term impact can be devastating. The Employee Benefit Research Institute found that 40% of retirees already fear outliving their savings. Using parent’s retirement savings for emergencies can leave parents unprepared for their own health and financial needs.

Co-Signing Loans

Co-signing may seem like a way to support children without giving direct cash, but it carries significant risks. If the child defaults, parents are fully responsible for repayment. The Consumer Financial Protection Bureau warns that co-signing can damage credit and create unexpected liabilities. This added burden can directly threaten parents’ retirement savings.

Supporting Lifestyle Choices

Some parents unintentionally fund their children’s lifestyle choices, such as vacations or luxury purchases. While generosity may come from love, it can undermine financial security in retirement. According to AARP, nearly one-third of parents admit they have compromised their own finances to support adult children. These decisions reduce the ability to cover essential living costs later.

Protecting Parents’ Retirement Savings Comes First

Supporting adult children can feel rewarding, but it often comes with hidden costs. Housing assistance, student loans, and everyday expenses may seem manageable, but they add up over time. Parents risk compromising their own future security if they put their children’s needs ahead of their own. Protecting parents’ retirement savings must remain the priority for long-term stability.

Read More

9 Times It Makes Financial Sense to Move in With Your Kids—And 3 Times It Doesn’t

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