A recent survey by Bankrate.com found that 51 percent of Americans are sacrificing their retirement savings to free up money to assist their adult children. (iStock/iStock)
Columnist

As parents, my husband and I have struggled with finding the right balance between protecting our children and letting them learn things the hard way.

To raise children to become responsible adults, you have to be supportive and encouraging. You also have to set limits — and you have to let them fail. It's through those stumbles that they experience the natural consequences of bad decision-making.

There also comes a time when you have to back away financially so that your children can learn to become self-sufficient. But knowing when to withdraw your support can be hard.

A recent survey by Bankrate.com found that 51 percent of Americans are sacrificing their retirement savings to free up money to assist their adult children.

It's understandable that parents want to continue to protect their children as they enter adulthood because starting out can be a struggle.

As I've pointed out before, I think millennials are unfairly labeled as financially irresponsible. When compared with baby boomers at the same age, millennials have more financial pressure.

“Boomers earned higher incomes, amassed greater assets, were more likely to own homes and had greater net wealth when they were young adults than today’s young people,” according to 2017 findings by the advocacy group Young Invincibles. “A young adult without a college degree in 1989 earned roughly the same income as a college graduate with student debt today.”

Each generation hopes the next will do better. But millennials are tracking against this goal.

“The American dream promises that the next generation will fare better than the previous one. However, young Americans today may be on track for lower lifetime earnings than their parents,” the Young Invincibles report concluded.

A reader recently shared this about support for an adult child: “We have made major sacrifices in our financial health for our son and his family as an investment in their financial well-being. With stagnating wages, housing costs through the roof and student debt that was not going away on its own we gave them a down payment on a home, paid off massive student debt, and established generous savings accounts for our grandchildren. We do not see this is as an umbilical cord: We see it as a lifeline, an investment in their future so they might one day have even the little we have.”

Another reader wrote: “My son feels bad about getting financial help from us. Two things: I think he’s pretty responsible with money. He’s getting a PhD. We tell him he’ll get the money sooner or later and he might as well get it when it will help the most.”

I also heard from Chuck Anderson of Virginia, who says he and his wife have gladly been a financial backstop for their adult children.

“We would rather help now than let them inherit a lot later,” Anderson wrote. “We have no debts, two defined pensions, Social Security and substantial savings. We can’t take it with us.”

There are, of course, parents with special-needs adult children who can't cut the financial cord.

“We have an adult autistic son who is very high functioning who graduated college,” Spencer B. from Great Falls, Va., wrote. “He works for a local historical society and gets paid $18,000 per year. You can hardly live in the Washington, D.C., area very well on that salary, so he lives at home. He does not buy anything extravagant. We pay his auto insurance. All in all, he is great to have around and has complied with our house rules.”

So when does helping adult children cross the line into coddling?

It's coddling — and destructive to their development — when you don't see financial growth. It's overprotecting when your adult child is fine with you footing the bills for his smartphone, car insurance and student loans while he's taking vacations and living it up with his friends at happy hour.

Or when she’s living with you and not paying rent but you see little progress in aggressively paying down her student loans. Or when she’s okay with just making the minimum payments on her credit card to live her best life in her 20s or even 30s.

Many parents have figured out how to balance helping their young adults launch and saving for their own retirement. They offer financial support but with strings that encourage their children to eventually stand on their own financial feet.

“You have free room and board for the summer after you graduate, then you start paying us if you stay here,” one reader and his wife told their three children.

Wherever you draw the line, take a step back and make sure you’re pushing your children toward being as self-supporting as possible.

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