The past few years have been truly difficult for our young adults. With diplomas in hand they eagerly sought employment. Some were fortunate to find work but many, not so lucky, "launched" in reverse - they moved back home.
Recent statistics show 44% of parents over 55 financially aided adult children in the past year. It might be tough for the graduates to be back with mom and dad but for mom and dad it strains saving for retirement or even postpones retirement for the next generation.
Continued support for young adults can drain a well-planned retirement.
Parents want to help their offspring but some rules must be considered.
Adult children must realize parents are not bottomless ATM's.
- Room and board could be in exchange for chores: yard work, painting, simple repairs, window washing, clearing a yard or a garage.
- Money loaned needs a signed, promissory note stating the date, amount, interest and term (date of repayment).
- Clear communication of expectations by both sides, in writing, keep feathers from flying.
Yes, parents want to help their children but consider the consequences:
When parents run out of money in retirement where will they go? They will move in with their children.
Parents - do you really want to live with your kids?
Young adults - do you really want your parents moving in with you?
Make it easy for everyone - talk about expectations; put them in writing.
Be $ smart!
