Boomer Retirement Risk: Kids Dependent to age 30

Parents are increasingly the gift that keeps giving. The Charles Schwab 2010 Families and Money Survey reports that 41 percent of parents are still coughing up some financial support for their adult kids, and the majority of those parents expect their kids won't be fully self-sufficient until age 30.

Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation points out that this could indeed be a dangerous parent trap:

Most of the people we polled told us they were fully independent from their parents by the age of 25, yet many of their kids today aren't achieving independence until they're 30 or even older. . . . . While this is largely due to the economic pressures and complexities of our times, it has major implications for those parents who are simultaneously trying to prepare for their own retirement.

The major implication being that many parents wish-at least tacitly-that they could use the money to build their own financial security. In the same survey, not having enough saved for retirement was the root cause of the top three financial worries for Mom and Dad:

Source: Schwab 2010 Families and Money

Parental Indulgence?
There is no question that things are tough all-around, and what parent wouldn't want to help a child cope with money issues? Nearly one-third of parents said their assistance is a function of their child dealing with a load of college debt, or unemployment. But the survey also hints that for some families, this is a self-inflicted financial dynamic. Among the parents offering financial support, nearly two-thirds believe their kids aren't concerned about being a financial burden. So um, maybe it's time for Mom and Dad to explain there may in fact be an opportunity cost (their retirement security) if they keep continuing to provide some financial support. And for the 25 percent of survey respondents who said their kids' overspending leads to their continued financial reliance, well, if you're also worrying about your retirement, isn't it time to stop enabling that overspending?

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