Well, that is a call every parent needs to make.
For starters, under Obamacare, childhood has been extended through age 26 for health insurance purposes.
Unfortunately, the horrible economy and non-recovery recovery over the past seven years have left young adults living with mom and dad with a mountain of student debt and with mostly minimum wage employment prospects.
It is tough.
But, alas, things have been tougher in our nation's history for adult children.
Now that is tough.
They were not living at home, worried about health insurance, college loans or even employment.
Just a little historical perspective here.
According to a report by the BMO Wealth Institute, fully "[o]ne third of parents with children aged 18-34 are willing to have a less comfortable retirement to support their children."
The title of the report is "The Bank of Mom and Dad: a Source of Comfort for Everyone " and it was the recent subject of the CNN Money article titled "Half of U.S. Parents Would Retire Later to Support Adult Children Financially."
In the mix, there is a tender balance to be struck between a temporary financial bridge to self-sufficiency and a permanent state of financial dependency.
Communication is key.
You should talk with your adult children about the situation and come up with a game plan.
This can help avoid misunderstandings that can lead to resentment that can lead to, well, bad outcomes all the way around.
Here are some practical financial pointers from the BMO Wealth Institute:
It is never too early or too late to teach your children about money at an early age.
Understanding the basics of personal finance at a young age can help set up a child for future financial success and independence.
Implement a Roth IRA.
Look at ways to leverage a Roth IRA for your own retirement. It can make savings more tax efficient and extend your ability to use your resources to meet financial (retirement included) goals.
While annual contributions are limited by IRS guidelines, the income earned in a Roth IRA is generally not subject to any federal or state tax.
Take Advantage of the Gift Tax Exclusion.
When possible, use the exclusions in the federal gift tax rules to increase the wealth transfer benefits available to adult children and any dependent parents.
Remember, when given directly to an institution instead of to your loved one, gifts made for books and tuition, as well as for medical expenses, are not counted toward the $14,000 you can gift to an individual each year.
Note: If you are married, then you and your spouse may gift a total of $28,000 to any individual annually.
Leave a Legacy of Financial Comfort.
Make sure your estate plans, including wills and trusts, make provision for your adult children to the extent you wish.
While you are at it, meet with your insurance professional to make sure you have sufficient life insurance for the income needs of your surviving spouse and even adult children who continue to struggle financially.
Fortunately, an experienced estate planning attorney and savvy financial advisor can assist you with reaching your own financial goals (retirement included), while weaving appropriate financial support for adult children into a comprehensive strategy.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: CNN Money (December 22, 2015) "Half of U.S. Parents Would Retire Later to Support Adult Children Financially"