Parents’ Dilemma: Kids Who Don’t Launch

Karen James and John Kingrey remember very clearly breaking the news to their Millennial son that they would no longer support him.

After struggling through his first year in college, Michael was sitting on his parents’ bed tossing around whether or not he should join the U.S. Navy. “I said, ‘You don’t have to join the Navy, but you’re not living here. And winter’s coming,’ ” Karen James recalled.

And then she thought, but did not say, what many parents before her have thought about the offspring they love:  “You’re not living here doing nothing.”

Easing their son out the door in the run-up to the couple’s 2014 retirement “was one of the toughest things we ever did,” John Kingrey said. Their son’s story had a happy ending.

But more parents than ever are being torn between supporting adult children who haven’t yet launched and getting ready for their own fast-approaching retirement. Record numbers of 18- to 34-year-olds are living with their parents, a result of later marriages and a tough job market for that age group.

I am not a parent and am unqualified to write this blog from their perspective. But as a cold financial calculation, supporting a 20-something is problematic for older parents at a time that nearly half of U.S. baby boomers are at risk that their standard of living will decline after they retire.

With little time left to prepare, the most effective thing people in their 50s or early 60s can do is plan on delaying retirement, which sharply increases the size of a monthly Social Security check. But paying down a mortgage faster or putting more money into a 401(k) retirement plan is also a good idea.

“You shouldn’t be helping them if you want to put more money into your retirement,” says Minnesota financial planner Mark Zoril. But he’s quick to add that getting tough on offspring isn’t easy for parents – or their advisers. “It’s a pretty difficult [conversation] to have with your client.”

For one thing, many parents enjoy having grown children around the house. For some families, it can make financial sense to have a multigenerational household if the adult offspring pay rent.

Rather than expecting children to suddenly launch, Tim Maurer, a South Carolina financial adviser and speaker, suggests parents encourage them to slowly become airborne by introducing them “to the broader reality of life.”

If the Millennial has a job, even a low-paying one, first require they pay for their cell phone, which is relatively inexpensive. Next might be the car insurance, perhaps a car payment, and finally rent. If they live at home more than a year, he said, the rent should go up quite a bit.

The alternative? “When we allow that pattern of them continuing to rely on us financially, we’re creating a codependent relationship,” he said. This codependency can also come back to haunt offspring if they have to support elderly parents financially, he said.

Zoril said these issues can’t be divorced from the larger one: many baby boomers aren’t yet thinking very hard about what retirement will be like. Indeed, one study shows that parents, rather than save, actually spend more money after their kids leave the roost, creating a more expensive lifestyle that will be even harder to maintain in retirement. Kids who fail to launch, Zoril said, are just “a distraction.”

The ultimatum that the now-retired Minnesota parents gave their son had its hoped-for effect on him. Michael spent two years in the Navy, which made his father, a former career Army JAG officer, proud. He then finished college and an MBA, and now, at age 30, has a real job with benefits at a major U.S. corporation.

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