When Adult Children Wreck Parents’ Retirement

The kids who are the biggest drain on their parents’ finances are those who never learn to truly fly on their own. That’s true for a number of our clients as well as people around the country.

Life takes many unexpected turns and we face financial calamities we can’t control. But the good news is that the financial discipline of clients’ children is something over which the parents have a great deal of control. But they need to seize it.

It’s easiest to start when kids are young, making sure they know that they are expected to grow up and become self-sufficient.

What if, however, clients are already nearing retirement age or have stopped working? The chance to give a child a sense of financial independence has likely already passed.

When we see families lose money for those reasons, the conversations are difficult. Typically, one or both of the parents will tell me, “It’s so much harder for our children these days. Look how expensive homes are now. Look how expensive cars are. How can little Johnny (now age 35), afford these things without our help?” If they aren’t there to help their kids, they believe, then the kids won’t be able to have the kind of life they’ve had. And, of course, they love their children and want them to be happy.

It can be difficult for all of us to let our older kids, even those who have already started college or work, make decisions without our input. I have been there myself. My daughter, Lisa, quit her job and bought a one-way ticket to Southeast Asia. She said, “I am burned out from work and need a break, so I’m going to go to Thailand.” I didn’t try to persuade her to stay here or to get another job. I didn’t do anything but wish her safe travels and ask her what she was doing for Christmas.

When I tell this story, some people are appalled that I would let my daughter, who was 25 at the time, go to Thailand by herself. But she was an adult (if young) and she could make her own choices. Sure, I sometimes worried about her and felt a bit anxious when I didn’t hear from her for a few weeks.

But this was her adventure, not mine, and it ended up being a great experience for her. She traveled the country, enjoyed learning about a culture very different from the one she’d grown up in, met many wonderful people who were on similar adventures, and really learned to rely on her own resources. Eventually, she came back home, ready to get back to work. She is now settled in the Cayman Islands, teaching accounting and economics. It is a wonderful life she lives!

The best thing I could do for her was let her go and find her own way. She is smart and talented, and I knew she would figure it out. But I didn’t give her any money. Friends say, “How can she afford to do that?” I tell them, “That’s her issue. If she can’t afford it, she’ll come home and get another job.” But she did fine.