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

[Anonymous]

We pay for health insurance, car insurance, travel home, phones, and family vacations. And paid for college tuition. Groceries and dinner out now and then.

One is in grad school, one is just starting out.

We don’t have a lot but trying to help them get on their feet with all the inflation etc.

[Anonymous]

Anonymous wrote:My 27 year old lives at home and pays for all her own expenses but by allowing her to live with us and not pay any housing expenses she is able to travel 3 times a year, shop/eat out weekly etc.. She recently said she spent $475 in 2 weeks eating out.

My 30 year old dd we help out by buying things for our grandsons. We will buy them school clothes, Jordan sneakers, pay for cell phones etc.

Pathetic

[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.

Agree. Never take money with strings.

[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.

Agree. Never take money with strings.

It sounds more like a gift earmarked for a specific purpose than "money with strings." I have no problem receiving either. My parents bought me my first car, but if they had given me $20,000 instead to go out and buy my first car, I would have been equally grateful. My parents also bribed me to get good grades (so money with strings) because I was a lazy, inattentive teen. It worked. And by college, I cared and got good grades without a financial incentive, partly because I had the study skills I had built when I was younger.

I'm sure there are examples where taking money with strings is a bad idea, but I think those need to be evaluated on a case by case basis.

[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.

Yeah that is a good plan!

[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.

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.

No, we are taking the approach from that book of starting to gift while we are still alive. So we can also see the benefits and watch our family enjoy while alive.

And our kids won't be getting it all, a lot will eventually go to charity, but not until we die, as we want to keep enough if we need major care in our later years.

[Anonymous]

Anonymous wrote:

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).

You can give anyone any amount, it’s just that over $19k you have to count it toward your lifetime exemption, which is currently about $14m.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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).

You can give anyone any amount, it’s just that over $19k you have to count it toward your lifetime exemption, which is currently about $14m.

Ok, that is technically correct.

And for those of us who will have estates over $14M each ($28M as a couple), one key part of financial planning is to find ways to Spend down your wealth without having tax implications. Gifting the yearly Max that doesn't count towards your lifetime exemption is one key way to do that.

Once a kid has a spouse and 2 kids, that is $152K per year we can technically give each of our kid's and their families without any tax implications (now or later).

So we can clear $304K per year out of our estate potentially in the future without any tax implications for any one involved. It only helps a little bit, but will save our kids from having to pay 50% on taxes when our estates are settled

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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).

You can give anyone any amount, it’s just that over $19k you have to count it toward your lifetime exemption, which is currently about $14m.

Ok, that is technically correct.

And for those of us who will have estates over $14M each ($28M as a couple), one key part of financial planning is to find ways to Spend down your wealth without having tax implications. Gifting the yearly Max that doesn't count towards your lifetime exemption is one key way to do that.

Once a kid has a spouse and 2 kids, that is $152K per year we can technically give each of our kid's and their families without any tax implications (now or later).

So we can clear $304K per year out of our estate potentially in the future without any tax implications for any one involved. It only helps a little bit, but will save our kids from having to pay 50% on taxes when our estates are settled

you can also pay any amount on behalf of anyone to an educational or medical facility

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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).

You can give anyone any amount, it’s just that over $19k you have to count it toward your lifetime exemption, which is currently about $14m.

Ok, that is technically correct.

And for those of us who will have estates over $14M each ($28M as a couple), one key part of financial planning is to find ways to Spend down your wealth without having tax implications. Gifting the yearly Max that doesn't count towards your lifetime exemption is one key way to do that.

Once a kid has a spouse and 2 kids, that is $152K per year we can technically give each of our kid's and their families without any tax implications (now or later).

So we can clear $304K per year out of our estate potentially in the future without any tax implications for any one involved. It only helps a little bit, but will save our kids from having to pay 50% on taxes when our estates are settled

you can also pay any amount on behalf of anyone to an educational or medical facility

Yes, have done that for parents (retirement home counts as a medical facility). And plan to do it for grand kids, as well as our own kids if they decide to pursue more than a BA/BS

[Anonymous]

Anonymous wrote:How much financial help are you really giving your adult (out of college) children? If they didn’t have your help what would their life look like?

NONE. Zero.

They are adults. They are always welcome to live at home, should they want or need to do so. But they are on their own financially.

They live in pleasant apartments with roommates. They have professional jobs and enough money to travel and go out to eat and buy the things they need. Their lives are just fine, and if I gave them money, I would ruin their lives.

[Anonymous]

^^we paid for our children's education, so they have no debt. But we will not help them with grad school. They are on their own.

[Anonymous]

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.

Yup, that’s the reality of living in any large metro area with lots of wealth. As a young adult trying to make my way through life I’ve run into a number of people where it was extremely obvious they had some kind of significant help from relatives. They were usually pretty reluctant to admit this but sometimes there’s no denying it like when someone buys a $1.5M house at 25 with less than a year of work experience and a single income that’s probably $150k at most.

[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.

Wait, all of these people don’t “admit it” how do you know this?

Much of my life is funded by the wealth of previous generations. If anyone asked I would readily admit it, but it’s not like I volunteer that information because that is weird if nobody asked.

They’ll brag about their career success and buying a house but if you check records you’ll see their parents as a co-signer on their mortgage.

Yeah this is super annoying. I know someone exactly like this, very cocky individual and likes to flash money to feel superior. But he comes from 9-10 figure family wealth and works a very average job.

[Anonymous]

I paid for all their college expenses and a good used car. I gave them each a trip for high school and college graduation.

Once they graduated from college I pay for health insurance till they're 26. After that they're on their own. They do have savings from summer jobs and money they saved on their own.