3 Ways to Help Adult Children Without Sacrificing Your Nest Egg

Many adult children are graduating into a difficult climate. Undoubtedly, whether we’re talking about considerable student loan debts, the prospect of tariff-fuelled “second wave” of high inflation, or the rise of AI agents and the automation of various roles, there’s no shortage of things for one’s young adult children to be a bit anxious about. And it’s natural to want to help them, especially if you’ve saved up a pretty sizeable retirement nest egg for yourself over the years and decades, when things were a whole lot simpler.

With Trump tariffs increasing the odds of a recession, things could become a whole lot tougher, especially for a young Gen Z who, like the Millennials before them, may have to delay significant life milestones such as buying that first home, getting married, and having a baby due to a mounting list of financial pressures.

While it’s vital to understand the tougher environment, it’s also wise not to crack open your own nest egg. At the end of the day, your hard-earned retirement is yours. And while you’re free to delay it or share the wealth with others, do understand that finding the right balance can allow you to have your cake and eat it, too. Indeed, finding balance with anything can be a challenge, especially when the future is so uncertain, whether we’re talking about a looming trade war or disruptive impact of AI and automation.

In this piece, we’ll go over a trio of ways that one can help adult children without having to jeopardize one’s own retirement nest egg. As always, reach out to a financial planner before making any moves that stand to set you back on your journey towards a comfortable retirement.

Teaching them about savings, investing, interest, and financial independence early

Spreading the knowledge that helped you amass a nest egg can be invaluable for adult children and it doesn’t cost a penny. Indeed, you can give your child a fish by sending cash their way to pay bills, but by doing so you really won’t be teaching them how to fish. And you’ll probably end up turning your own nest egg into a cash flow stream for them. That could weigh heavily on your retirement plans, not to mention impairing your adult child’s ability to learn and grow to become financially independent.

Even if you don’t mind playing the role of “bank of mom or dad,” the wrong incentives may also hurt their ability to build real wealth over the long haul. Getting in the way of personal growth is never a good idea. That’s why educating and advising on various financial topics (perhaps something you learned from your advisor) is an overlooked way to help out one’s youngsters.

At the end of the day, adults are adults and should understand the value of independence.

Letting them live at your home so they don’t have to pay rent

Perhaps the biggest way that one’s adult child can get a headstart on saving and investing is allowing them to live at home so they don’t have to worry about rent — likely the largest monthly expense of young people. Indeed, housing prices aren’t getting any cheaper.

And if one hopes to build real wealth, it’s all about minimization of expenses. Though living at home may get in the way of learning independence, I’d argue there’s no shame in allowing them to move back in if they’ve come on hard times, especially if stagflation becomes a reality in the coming quarters.

Help them chip away at high-interest debt.

Of course, if you’re well ahead on your investment journey and have a nest egg that’s more than sizable enough to fund a retirement, it can make sense to help one’s adult child chip away at debt. And though you don’t need to pay it off right away, you can part with a portion of the disposable income you would have otherwise spent on a discretionary good.

Indeed, it’s tough to dig your way out of debt. And the pains of interest have likely already been felt. Either way, if one’s adult child understands the harms of debts, perhaps offering some financial assistance isn’t the worst thing in the world, at least in my humble opinion.

If you decide to assist with debt repayment, do set boundaries and notify them of your intention not to come to the rescue should they find themselves in a similar situation in the future. As always, your mileage will vary, making a financial advisor worth consulting.

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