It’s tough being a parent. But modern parents are making immense financial sacrifices to raise and educate their kids, regardless of the cost to their everyday lives and even to their eventual retirement.
That’s the finding of a study by Merrill Lynch and Age Wave, “Financial Journey of Modern Parenting: Joy, Complexity and Sacrifice.”
The kids, by the way, have no clue. According to presenters at a web briefing, to them all that parental financial support is simply “the way it’s always been,” and that’s part of the problem.
It costs more than $230,000 to raise one child to age 18, and 90% of parents are taken aback at how much they’ve spent to do so. Even when the kids are grown, parents don’t stop opening the checkbook, even though they’re endangering their own retirements and perhaps even health as they age: They regard it as a lifetime commitment, helping adult children with everything from tuition to rent to weddings to home down payments.
Oh, and groceries, cellphone bills and grandkids’ college tuition. In fact, 79% of parents to early adults give at least some financial support to their children — 31% of whom still live at home. “Parents in the U.S. now spend $500 billion annually on their 18- to 34-year-old adult children,” the report says, “twice the amount they contribute each year to their retirement accounts ($250 billion).”