How much financial help are you really giving your adult children?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

From my parents we got $10000 towards the house down payment and they put around $500 per year per child in my children's 529s. My ILs gave us $1000 at the wedding and not a dollar since that.
Just yesterday my parents said that after meeting with a financial advisor they want to give us more money to avoid taxes. They informed me that the first gift will be for a certain home improvement they want me to have, and they have certain stipulations for the work that will be done! I said PLEASE just put the money in the kids' education funds but they don't want to do this for some reason.

You are heading down a slippery slope. I would decline and maybe push back nicely that you’re happy to invest any gifts for the next generation but are uncomfortable having them pay for your adult needs that you can save for.

[Anonymous]

Our plan is to not give much but to be a safety net should they need it (kids are early 20s). We’ll contribute to weddings, of course. DH and I were each independent at 22 and have done very well and I think part if it was that we were “hungry”. We’re proud of what we’ve accomplished together and want our kids to feel similarly about themselves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

Co-signing on a car loan? Braces? To me, that’s more unusual because that’s two middle class family units helping each other. The adult children are not getting by if they need those things, and the parents are stretching to help them. That’s not the same to me as “help” that is just wealth transfer. We have a lot of money from parents, but it is gifts and trusts. It’s not item by item. We hugely benefit from it, obviously, but it’s not like we couldn’t support ourselves well enough to qualify for a car loan or buy braces.

I am pretty darn open about family wealth but people tend to live in economically homogenous bands and they make a LOT of assumptions about their friends and neighbors. When someone makes a casual comment about how expensive daycare is, I don’t say “well not for us because I have a trust I can tap for that.” Because that would be super weird and rude. But if a close friend is there talking to me about their struggles paying with daycare and asks what we’re doing, I will certainly tell them.

It's not two middle-class families helping each other. It's boomers helping millennials. Boomers had all the advantages-- pensions, cheap housing, strong markets. My "middle-class" parents are actually super wealthy. My own "middle-class" family has two incomes and a strict budget. We're fine, but my parents were way better off (on one income!) at this stage of life than we are. The world has changed in 30 years.

Okay but if wealthy boomers want to help their kids, they’ll just buy a car. I have had a privileged life and I’ve never had a car loan. I was taught to buy them with cash and drive them for as long as possible (assuming you just need/want a utilitarian car, which has been true for most of us). And if you can’t afford braces, you’re living really close to the bone.

Wealthy boomers will help their kids with whatever they wish, why restrict it to cars? DH's big law friend just paid for his daughters $1.6 mil wedding at a Montage resort and the downpayment on a $6 mil home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

+1

+2

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

Because it's really nobody's business. We help our kids. Our approach is "Die with zero" and we firmly believe that slowly gifting them the $$ now, in their 20s will be much more beneficial than them receiving a windfall in their 50s+ (they will get that as well). As long as they in meaningful to them careers and working hard, we will continue to do so. It's really nobody else's business. Our kids recognize their privilege and don't brag about it. One is 26, and knows that their chain of command must know their parents are rich, because they go on at least one very nice vacation yearly with us. But beyond that nobody knows or needs to know. They know most people have student loans and have to do it themselves.

I know you want to die with zero, but how much do you have as a buffer? I think many people read these boards and start comparing what they can do for their kids to what others are doing at their retirement's cost. Is there a number you are holding on to for retirement and end-of-life care? DH and wouldn't feel comfortable making monetary gifts for our adult children if our net worth fell below $5m, for example. We are helping his parents now through their final years, and we see how expensive it is. It also causes some resentment in our marriage that we can't do more for our kids because his parents were irresponsible - they didn't help him with college or anything after he was 18 years old, and now we're funding their retirement years. The most important gift we can give our kids is not to burden them with the cost of our end-of-life care.

We have plenty. We are UHNW. We earn almost 7 figures yearly from just interest/cash alternatives. And we live on that quite easily. That is without using any of the principle, and it does not include the $8M in homes (fully paid off), our retirement accounts, SS (when we take it--hey every little bit helps) and our other investment accounts (invested fully in the market, not the cash alternatives that earn us interest). So I think we will be just fine. We could need round the clock care for 15-20years + (each of us) and still have plenty left for the kids when we die.

But yes, you do want to ensure you are not a burden to your kids. But once you have done that, then gifting them $$$ now is a much better approach (IMO) than waiting until we die (at hopefully 85+ and our kids are 50+)

[Anonymous]

Anonymous wrote:How are you alll funding ROTHs for your children. Isn’t that illegal?

You can gift anyone $19K/year, so can your spouse. That's $38K/year. The kid can use it however they want---we gift it to our kids with the intention they use it to fund their ROTH Iras (and once they have a 401K, to fund that as well).

However, they can only fund the IRA up to the point they also have earned income (and then obviously not over $7K).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

Because it's really nobody's business. We help our kids. Our approach is "Die with zero" and we firmly believe that slowly gifting them the $$ now, in their 20s will be much more beneficial than them receiving a windfall in their 50s+ (they will get that as well). As long as they in meaningful to them careers and working hard, we will continue to do so. It's really nobody else's business. Our kids recognize their privilege and don't brag about it. One is 26, and knows that their chain of command must know their parents are rich, because they go on at least one very nice vacation yearly with us. But beyond that nobody knows or needs to know. They know most people have student loans and have to do it themselves.

I know you want to die with zero, but how much do you have as a buffer? I think many people read these boards and start comparing what they can do for their kids to what others are doing at their retirement's cost. Is there a number you are holding on to for retirement and end-of-life care? DH and wouldn't feel comfortable making monetary gifts for our adult children if our net worth fell below $5m, for example. We are helping his parents now through their final years, and we see how expensive it is. It also causes some resentment in our marriage that we can't do more for our kids because his parents were irresponsible - they didn't help him with college or anything after he was 18 years old, and now we're funding their retirement years. The most important gift we can give our kids is not to burden them with the cost of our end-of-life care.

We have plenty. We are UHNW. We earn almost 7 figures yearly from just interest/cash alternatives. And we live on that quite easily. That is without using any of the principle, and it does not include the $8M in homes (fully paid off), our retirement accounts, SS (when we take it--hey every little bit helps) and our other investment accounts (invested fully in the market, not the cash alternatives that earn us interest). So I think we will be just fine. We could need round the clock care for 15-20years + (each of us) and still have plenty left for the kids when we die.

But yes, you do want to ensure you are not a burden to your kids. But once you have done that, then gifting them $$$ now is a much better approach (IMO) than waiting until we die (at hopefully 85+ and our kids are 50+)

Thank you for providing context. I think it's important for people with much less to understand how much you give to your children in the context of your overall net worth.

[Anonymous]

Anonymous wrote:Our plan is to not give much but to be a safety net should they need it (kids are early 20s). We’ll contribute to weddings, of course. DH and I were each independent at 22 and have done very well and I think part if it was that we were “hungry”. We’re proud of what we’ve accomplished together and want our kids to feel similarly about themselves.

It's a different world than when you and DH started out. Weddings are more for the families than the kids.

[Anonymous]

We have four kids, and really the help that we gave depended on the particular needs of each kid. But generally speaking we obviously paid for college leaving all of the kids without loans, and we obviously paid for weddings but not all the kids got married. We also provided down payments to the kids who wanted to get houses. We’ve always funded very nice vacations. And since we retired early we provided the childcare until the each grandkid was 3 or so.

Other than that we didn’t do much.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

From my parents we got $10000 towards the house down payment and they put around $500 per year per child in my children's 529s. My ILs gave us $1000 at the wedding and not a dollar since that.
Just yesterday my parents said that after meeting with a financial advisor they want to give us more money to avoid taxes. They informed me that the first gift will be for a certain home improvement they want me to have, and they have certain stipulations for the work that will be done! I said PLEASE just put the money in the kids' education funds but they don't want to do this for some reason.

You are heading down a slippery slope. I would decline and maybe push back nicely that you’re happy to invest any gifts for the next generation but are uncomfortable having them pay for your adult needs that you can save for.

My mom feels that helping us with kids' education (ie. taking a line item out of our budget) is no good because it will cause my husband to become complacent and not go for promotions/raises. She specifically stated that he hasn't been promoted in a few years and "Where's his drive?" However a discrete gift that is earmarked for something she wants me, as her daughter, to have is ok.
I told her to keep the money.

[Anonymous]

Anonymous wrote:We have four kids, and really the help that we gave depended on the particular needs of each kid. But generally speaking we obviously paid for college leaving all of the kids without loans, and we obviously paid for weddings but not all the kids got married. We also provided down payments to the kids who wanted to get houses. We’ve always funded very nice vacations. And since we retired early we provided the childcare until the each grandkid was 3 or so.

Other than that we didn’t do much.

Are you being ironic? You provided college, weddings, home downpayments, very nice vacations, and childcare until each grandkid was 3! I mean, wow. The childcare alone is huge. My mom watched my kids only when we flew ourselves to her house to visit for a week each year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

From my parents we got $10000 towards the house down payment and they put around $500 per year per child in my children's 529s. My ILs gave us $1000 at the wedding and not a dollar since that.
Just yesterday my parents said that after meeting with a financial advisor they want to give us more money to avoid taxes. They informed me that the first gift will be for a certain home improvement they want me to have, and they have certain stipulations for the work that will be done! I said PLEASE just put the money in the kids' education funds but they don't want to do this for some reason.

You are heading down a slippery slope. I would decline and maybe push back nicely that you’re happy to invest any gifts for the next generation but are uncomfortable having them pay for your adult needs that you can save for.

My mom feels that helping us with kids' education (ie. taking a line item out of our budget) is no good because it will cause my husband to become complacent and not go for promotions/raises. She specifically stated that he hasn't been promoted in a few years and "Where's his drive?" However a discrete gift that is earmarked for something she wants me, as her daughter, to have is ok.
I told her to keep the money.

Why? I would love to get discrete gifts from my mom that are earmarked for only me. In fact, that would be my favorite kind of gift.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

From my parents we got $10000 towards the house down payment and they put around $500 per year per child in my children's 529s. My ILs gave us $1000 at the wedding and not a dollar since that.
Just yesterday my parents said that after meeting with a financial advisor they want to give us more money to avoid taxes. They informed me that the first gift will be for a certain home improvement they want me to have, and they have certain stipulations for the work that will be done! I said PLEASE just put the money in the kids' education funds but they don't want to do this for some reason.

You are heading down a slippery slope. I would decline and maybe push back nicely that you’re happy to invest any gifts for the next generation but are uncomfortable having them pay for your adult needs that you can save for.

My mom feels that helping us with kids' education (ie. taking a line item out of our budget) is no good because it will cause my husband to become complacent and not go for promotions/raises. She specifically stated that he hasn't been promoted in a few years and "Where's his drive?" However a discrete gift that is earmarked for something she wants me, as her daughter, to have is ok.
I told her to keep the money.

Why? I would love to get discrete gifts from my mom that are earmarked for only me. In fact, that would be my favorite kind of gift.

Because she's going to want to oversee the build since "she's paying."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

Because it's really nobody's business. We help our kids. Our approach is "Die with zero" and we firmly believe that slowly gifting them the $$ now, in their 20s will be much more beneficial than them receiving a windfall in their 50s+ (they will get that as well). As long as they in meaningful to them careers and working hard, we will continue to do so. It's really nobody else's business. Our kids recognize their privilege and don't brag about it. One is 26, and knows that their chain of command must know their parents are rich, because they go on at least one very nice vacation yearly with us. But beyond that nobody knows or needs to know. They know most people have student loans and have to do it themselves.

I know you want to die with zero, but how much do you have as a buffer? I think many people read these boards and start comparing what they can do for their kids to what others are doing at their retirement's cost. Is there a number you are holding on to for retirement and end-of-life care? DH and wouldn't feel comfortable making monetary gifts for our adult children if our net worth fell below $5m, for example. We are helping his parents now through their final years, and we see how expensive it is. It also causes some resentment in our marriage that we can't do more for our kids because his parents were irresponsible - they didn't help him with college or anything after he was 18 years old, and now we're funding their retirement years. The most important gift we can give our kids is not to burden them with the cost of our end-of-life care.

We have plenty. We are UHNW. We earn almost 7 figures yearly from just interest/cash alternatives. And we live on that quite easily. That is without using any of the principle, and it does not include the $8M in homes (fully paid off), our retirement accounts, SS (when we take it--hey every little bit helps) and our other investment accounts (invested fully in the market, not the cash alternatives that earn us interest). So I think we will be just fine. We could need round the clock care for 15-20years + (each of us) and still have plenty left for the kids when we die.

But yes, you do want to ensure you are not a burden to your kids. But once you have done that, then gifting them $$$ now is a much better approach (IMO) than waiting until we die (at hopefully 85+ and our kids are 50+)

LOL. So you’re not actually dying with zero.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know people (30 plus) whose parents are paying for their down payment, co signing mortgages, paying for their grandkids braces, daycare, vacations, ivf, co signing on cars etc. a lot of these people would never admit to how much parental help they are getting despite having “good” jobs.

From my parents we got $10000 towards the house down payment and they put around $500 per year per child in my children's 529s. My ILs gave us $1000 at the wedding and not a dollar since that.
Just yesterday my parents said that after meeting with a financial advisor they want to give us more money to avoid taxes. They informed me that the first gift will be for a certain home improvement they want me to have, and they have certain stipulations for the work that will be done! I said PLEASE just put the money in the kids' education funds but they don't want to do this for some reason.

You are heading down a slippery slope. I would decline and maybe push back nicely that you’re happy to invest any gifts for the next generation but are uncomfortable having them pay for your adult needs that you can save for.

My mom feels that helping us with kids' education (ie. taking a line item out of our budget) is no good because it will cause my husband to become complacent and not go for promotions/raises. She specifically stated that he hasn't been promoted in a few years and "Where's his drive?" However a discrete gift that is earmarked for something she wants me, as her daughter, to have is ok.
I told her to keep the money.

Why? I would love to get discrete gifts from my mom that are earmarked for only me. In fact, that would be my favorite kind of gift.

Because she's going to want to oversee the build since "she's paying."

Coming from someone with a distant mother growing up and even more distant now, I see an opportunity here. If your mom is funding the remodel, maybe you two could collaborate on design choices to get things the way you'd like without your husband's input, since she's paying. If she's overbearing and you won't get it done your way, I can see why it's not worth the stress. But if the issue is that she's using her money to improve your life in some nice, targeted way, I'd welcome this from my mom.