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

[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.

Omg I love your mom’s approach.

#NoScrubs

[Anonymous]

Very little. I pay for my kid’s cell phone plan.

Even though she is a full time grad student, she pays for everything else (with her small stipend a little left in the 529).

So she pays rent, food, car insurance , clothes.Her graduate program covers health insurance. I am proud of her!

[Anonymous]

Anonymous wrote:We gave our only DS our McLean house, worth about 3M, when he got married at the age of 27. We also set aside 1M for their kids future education, and paid off my DIL 80K in student loan (DS was college’s debt free). DW and I live in a two bedrooms condo. YMMV.

Wow, you're incredibly generous. Hope your DS and DIL appreciate you!

[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.

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.

Nice, but not relatable for most readers. If you have $1m from interest, and you are getting 5% on your interest from cash and cash alternatives, then you probably have~ $20 million invested in cash/cash alternatives paying 5% interest to generate $1,000,000 in annual interest income. Plus, you say you have an $8m home and retirement accounts. And I'm sure you have other private investments. So, in your case, you should be giving money away now because you are probably above the estate tax limit of $27.22m for a married couple, and you have more than you need. Even if you give away a lot of money, you can still afford to do nice things for yourselves.

Many people here reading these posts have $3m or less, and giving away chunks of their relatively little nest egg is foolish because they still have retirement and end-of-life care ahead of them. People should be comparing apples to apples.

[Anonymous]

Anonymous wrote:

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.

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.

Nice, but not relatable for most readers. If you have $1m from interest, and you are getting 5% on your interest from cash and cash alternatives, then you probably have~ $20 million invested in cash/cash alternatives paying 5% interest to generate $1,000,000 in annual interest income. Plus, you say you have an $8m home and retirement accounts. And I'm sure you have other private investments. So, in your case, you should be giving money away now because you are probably above the estate tax limit of $27.22m for a married couple, and you have more than you need. Even if you give away a lot of money, you can still afford to do nice things for yourselves.

Many people here reading these posts have $3m or less, and giving away chunks of their relatively little nest egg is foolish because they still have retirement and end-of-life care ahead of them. People should be comparing apples to apples.

Well yes, I do agree, you should not be giving away money unless you have enough to fund your retirement.

[Anonymous]

Anonymous wrote:

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.

And you're proud of this?

Right.. ICK!

[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.

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.

Curious how you would want them to tell you this? Like what do you mean 'admit it'?

I can buy much more real estate than my income allows due to family help so I am curious at what point I explain this to people? I don't mind people knowing at all, but it seems awkward to bring it up when nobody asks specifically.

[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.

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.

Curious how you would want them to tell you this? Like what do you mean 'admit it'?

I can buy much more real estate than my income allows due to family help so I am curious at what point I explain this to people? I don't mind people knowing at all, but it seems awkward to bring it up when nobody asks specifically.

it's nobody's business, unless you are constantly bragging about it.
So yeah, you have family who can help you. Many people do, it's just at varying levels of "help". Unless you brag about it or judge others who cannot do the same things you can, there shoudlnt' be an issue.

And yes, not sure how a normal person brings this up, because it's not needed and bringing it up would be obnoxious and braggarting.

[Anonymous]

We bought used cars for our kids to drive while they were in HS and starting to work PT. We paid for the car insurance and repairs/maintenance. And kept the same arrangement through college. Upon college graduation we gave them their cars. We also are allowing them to live at home rent free while they work and save money. In return they help out with some of the yard work.

[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.

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.

Curious how you would want them to tell you this? Like what do you mean 'admit it'?

I can buy much more real estate than my income allows due to family help so I am curious at what point I explain this to people? I don't mind people knowing at all, but it seems awkward to bring it up when nobody asks specifically.

it's nobody's business, unless you are constantly bragging about it.
So yeah, you have family who can help you. Many people do, it's just at varying levels of "help". Unless you brag about it or judge others who cannot do the same things you can, there shoudlnt' be an issue.

And yes, not sure how a normal person brings this up, because it's not needed and bringing it up would be obnoxious and braggarting.

Well, I agree. But other posters are insinuating that it should be brought up in some way since they think those they know in this situation won't 'admit' it.

[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.

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.

Curious how you would want them to tell you this? Like what do you mean 'admit it'?

I can buy much more real estate than my income allows due to family help so I am curious at what point I explain this to people? I don't mind people knowing at all, but it seems awkward to bring it up when nobody asks specifically.

it's nobody's business, unless you are constantly bragging about it.
So yeah, you have family who can help you. Many people do, it's just at varying levels of "help". Unless you brag about it or judge others who cannot do the same things you can, there shoudlnt' be an issue.

And yes, not sure how a normal person brings this up, because it's not needed and bringing it up would be obnoxious and braggarting.

Nobody should be bragging about these things regardless of who paid for them!

My friend’s wife is always asking us in front of people about certain luxury spending we do discretely… she doesn’t mean to be obnoxious but it’s annoying!

[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.

You should make her pay rent and put it in a savings account for her future use if you don’t need the cash. Unless those weeks are outliers she is getting into bad spending patterns and needs to learn some financial discipline

[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.

+1. Wealthy people don’t “help” with car or house payments. They give a lump sum so you can reduce or eliminate those payments. Why would they want to give half their gift to the bank every month.

[Anonymous]

Adult child here. DH’s parents give us the tax exempt gift every year. And both sets of parents help with some expensive therapies for one of our children who has special needs. If we needed more help, they would be there.

After I graduated from college, my parents helped me with rent until I could afford it on my own. They also had me on their credit card. I was self sufficient by 26 and budgeted very carefully. Despite all the help they gave me, I don’t think I was entitled about it - I felt grateful, and when I no longer needed the help, I stopped accepting it.

The money we receive now goes towards expenses for our kids. We don’t live lavishly or particularly above our means. We have a kid who has special needs and needs help, and our parents are able and willing to financially contribute.

[Anonymous]

We feed them occasionally. Late 20s. They are independent and manage their money well. They don't need help.