NYT: 30 somethings still being bankrolled by their parents

[Anonymous]

My siblings and I are all doing well financially but my parents are incredibly generous to all of us. Each grandchild had a very large 529 set up soon after being born and they give us big checks at Christmas which goes into savings. My Dad, now retired, was very successful and the gifts are part of my parents estate planning. I know we are incredibly lucky and I hope I can do the same thing for my children in 30 years.

[Anonymous]

People who are “enraged” by this: I hope you remember your rage at the voting booth when you consider the tax policies that make this so advantageous.

[Anonymous]

I'm going to pay for college. After that they are on their own. I would not recommend that they stay in this area.

[Anonymous]

Our son lives at home and buys his own food and pays the cable bill. His field does pay well and we will allow him to stay home for no more than two more years.
Our daughter makes $70,000 and we pay her monthly garage fee of $250. She has a student loan of $400 she will pay for the next year. Once the loan is paid we won’t pay for the garage. At some point, hubby wants to give them $20,000 each for a deposit on a home.

[Anonymous]

Anonymous wrote:I think the real story here is how well Boomers have done as a generation. I don't think the premise that previous generations were "emancipated" from their families because of some moral choice is right. Rich people gonna rich, and that means passing money to their children throughout their lives. It always has! There are just more of those families. These examples aren't of boomer parents eating canned soup so they can pay grandson's NYC private school tuition. These are boomer parents who can afford it.

Most of these examples are directly related to the tax code. If you are a rich boomer and you're trying to minimize your/your heirs tax burden, it makes sense to max out the cash gift every year (I think it's $14k?) and pay any tuition or medical expense you can, because it avoids the gift tax. I think the Times is really irresponsible for writing this story without pointing out the estate planning angle - not that it's not still a huge and arguably unfair boost for the millennials, but it is only logical that affluent boomers would do that.

I agree with you. Especially in the DCUM demographic there are lots of rich boomer parents who have more money than they know what to do with in retirement. Most people don't have enough money that the gift tax is going to matter, but, it certainly is a smart way to transfer wealth when your adult kids could actually use it (school tuition or enrichment activities for grandkids, nicer vacations, downpayment on house, unexpected medical expenses etc.). I wish my parents would follow this lead, but they are just hoarding their money and complaining about paying taxes!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think the real story here is how well Boomers have done as a generation. I don't think the premise that previous generations were "emancipated" from their families because of some moral choice is right. Rich people gonna rich, and that means passing money to their children throughout their lives. It always has! There are just more of those families. These examples aren't of boomer parents eating canned soup so they can pay grandson's NYC private school tuition. These are boomer parents who can afford it.

Most of these examples are directly related to the tax code. If you are a rich boomer and you're trying to minimize your/your heirs tax burden, it makes sense to max out the cash gift every year (I think it's $14k?) and pay any tuition or medical expense you can, because it avoids the gift tax. I think the Times is really irresponsible for writing this story without pointing out the estate planning angle - not that it's not still a huge and arguably unfair boost for the millennials, but it is only logical that affluent boomers would do that.

I agree with you. Especially in the DCUM demographic there are lots of rich boomer parents who have more money than they know what to do with in retirement. Most people don't have enough money that the gift tax is going to matter, but, it certainly is a smart way to transfer wealth when your adult kids could actually use it (school tuition or enrichment activities for grandkids, nicer vacations, downpayment on house, unexpected medical expenses etc.). I wish my parents would follow this lead, but they are just hoarding their money and complaining about paying taxes!

THERE IS NO SUCH THING AS THE GIFT TAX!!!!

There is an estate tax and the exclusion is $11 million. So unless your parents networth is greater than $11 million, they do not need to concern themselves with writing $15k checks each year to kids, grandchildren, etc. Your typical rich boomer does NOT have an $11 million estate.

[Anonymous]

Anonymous wrote:Our son lives at home and buys his own food and pays the cable bill. His field does pay well and we will allow him to stay home for no more than two more years.
Our daughter makes $70,000 and we pay her monthly garage fee of $250. She has a student loan of $400 she will pay for the next year. Once the loan is paid we won’t pay for the garage. At some point, hubby wants to give them $20,000 each for a deposit on a home.

I feel like this is the perfect amount of helping. A little but still generous kickstart, & not enabling them to slack off on finances.

[Anonymous]

The survey for these results is very odd:

More than half (53 percent) of Americans ages 21 to 37 have received some form of financial assistance from a parent, guardian or family member since turning 21, according to a 2018 report by Country Financial, a financial services firm in Bloomington, Ill. This may include paying bills for a cellphone (41 percent), groceries and gas (32 percent), rent (40 percent) or health insurance (32 percent).

First, as others have noted the age range is 21 to 37. People at the lower end of that age range are still in college, a time when parents typically do pay a lot of expenses.

The inclusion of health insurance is also odd--under the law parents' health insurance covers children until age 26 and in many cases that coverage is superior and often cheaper than what what young people could get on their own.

Finally, as many have pointed out, children's cell expenses can be very cheap on the margin under their parents' family plan and it would make little sense for parents to drop them and have the child get much more expensive single service.

While the article may be capturing a true trend, it needs much better numbers to document it.

[Anonymous]

Seems to me this is mostly relevant for privileged NYT subscribers in large cities. I frankly doubt it's a window into millenials in the Mid West.

This.

[Anonymous]

Anonymous wrote:The survey for these results is very odd:

More than half (53 percent) of Americans ages 21 to 37 have received some form of financial assistance from a parent, guardian or family member since turning 21, according to a 2018 report by Country Financial, a financial services firm in Bloomington, Ill. This may include paying bills for a cellphone (41 percent), groceries and gas (32 percent), rent (40 percent) or health insurance (32 percent).

First, as others have noted the age range is 21 to 37. People at the lower end of that age range are still in college, a time when parents typically do pay a lot of expenses.

The inclusion of health insurance is also odd--under the law parents' health insurance covers children until age 26 and in many cases that coverage is superior and often cheaper than what what young people could get on their own.

Finally, as many have pointed out, children's cell expenses can be very cheap on the margin under their parents' family plan and it would make little sense for parents to drop them and have the child get much more expensive single service.

While the article may be capturing a true trend, it needs much better numbers to document it.

Yeah. I'm at the top end of that age window. I haven't received financial gifts from my parents in many, many years. But, my parents did cover my car insurance during undergrad, and I lived at home rent-free for a four months between graduation and getting married, so I guess I would be part of the 53% who said "yes."

[Anonymous]

Anonymous wrote:People who are “enraged” by this: I hope you remember your rage at the voting booth when you consider the tax policies that make this so advantageous.

Yep yep yep.

[Anonymous]

Anonymous wrote:Our son lives at home and buys his own food and pays the cable bill. His field does pay well and we will allow him to stay home for no more than two more years.
Our daughter makes $70,000 and we pay her monthly garage fee of $250. She has a student loan of $400 she will pay for the next year. Once the loan is paid we won’t pay for the garage. At some point, hubby wants to give them $20,000 each for a deposit on a home.

Just curious why you do these things for someone making $70k/year??

[Anonymous]

I’ve been thinking about this thread today. I told both sets of parents we aren’t going on their trips with them anymore recently and they were upset. But they don’t pay anything and we don’t like the places they go. We want to save towards our own trips and not Ocean Shitty. We have two kids and don’t make anywhere near what our parents make (300-5000k).

Dh and I haven’t had a dime since we graduated college. We’re proud to be self sufficient but on the flip side of that, you don’t get to demand things of self sufficient people.

[Anonymous]

Pay for play. Money comes with strings attached

[Anonymous]

Anonymous wrote:I think the real story here is how well Boomers have done as a generation. I don't think the premise that previous generations were "emancipated" from their families because of some moral choice is right. Rich people gonna rich, and that means passing money to their children throughout their lives. It always has! There are just more of those families. These examples aren't of boomer parents eating canned soup so they can pay grandson's NYC private school tuition. These are boomer parents who can afford it.

Most of these examples are directly related to the tax code. If you are a rich boomer and you're trying to minimize your/your heirs tax burden, it makes sense to max out the cash gift every year (I think it's $14k?) and pay any tuition or medical expense you can, because it avoids the gift tax. I think the Times is really irresponsible for writing this story without pointing out the estate planning angle - not that it's not still a huge and arguably unfair boost for the millennials, but it is only logical that affluent boomers would do that.

The current estate tax exemption is $22.8 million for a couple (and it's portable, so the last spouse to die can use the whole amount). There aren't that many people who will exceed that. They're certainly out there, but as a percentage of the population, it's very small. It may be that some are concerned that the exemption will be lowered (pretty sure it will be if the Dems take control of the Senate and White House), but I really think it's more that there are quite a few well-off people who are living longer, and who realize that the extra $$ can make a big difference in their kid's lives now vs. 20-30 years from now when they would otherwise inherit. There are some tax advantages for a grandparent to put $$ in a 529, for example, but it's not huge, and I think the incentive is really to relieve financial stress for their kids while they're just getting established (vs. add to their retirement fund later).