Social Security and Medicare may be stirring up trouble for prospective retirees, but it looks like parasitic children will do more damage to the retirement funds of their parents.
This is at least according to two studies.
A TD Ameritrade survey reveals that three out of four “boomer” respondents feel obligated to financially help their grown children if these children ask them to. 41% of “Gen Y” respondents say their parents help them pay for food, rent and even cell phone bills.
A separate 2011 Investor Index shows 57% of baby boomer respondents are willing to support their children even if they have to pull money out of their retirement savings. More than 50% of their respondents say that their children had returned home for at least three months, and 42% of these particular respondents say that their finances had been negatively affected by the return of their children.
Lule Demmissie, managing director of TD Ameritrade, sums up the implications of the results:
“While boomers may have the best intentions, they could be setting the wrong precedent by financially supporting their adult children, particularly when it comes to discretionary items.”
“No parent wants to see their child struggle financially, but assistance should come within reason – and with firm expectations. While food and housing might be reasonable, a data plan for your son’s smartphone shouldn’t come between you and your retirement.”
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