A new reality: Retirement while supporting young adult children or parents

By Victoria Mejicanos
AFRO Staff Writer
vmejicanos@afro.com

With the rising costs of living, economic pressures and longer life expectancy, many who are preparing to retire must think about what retirement would look like while still financially supporting legal dependents, young adult children or their parents. According to experts who spoke with the AFRO, retiring with dependents has become either a choice or a necessity to help loved ones survive in the current economic climate. 

According to a savings.com report, which surveyed 1,000 parents who had adult children, 50 percent of parents are supporting a child older than 18.

For Rose Faye, a certified financial planner, conversations around retiring with dependents is not new, especially for clients of color, but it has changed in recent years. 

“Children [are] becoming more and more prevalent in the conversations I have with clients,” said Faye. “It’s even not just in the traditional sense that they live with you. Now, it is how do you also give them an economic leg up, for example, help put down payment for homes, or supplement things like one vacation a year so they can have experiences.” 

While financial planning can help people navigate these decisions, Dr. Sherida Santiago, a professor at Coppin State University’s College of Business, says this rising trend is a result of broader economic and structural factors. She noted that not only are more young adults living at home to save money, but older Black adults do not typically save for retirement. 

“I think that when we think about generational oppression, over time,  I would say commonly amongst African-American and Latino populations, that if your family did not have the proper social and economic circumstance, then you’re generationally fighting your way out of that, which also puts a strain on the ability to have the proper retirement structure set up, and then that couple with trying to help others come up, it can be a bit of a challenge,” said Santiago. 

The financial strain of supporting others while preparing for retirement can have long term consequences according to both experts, especially those who are behind on saving. 

Santiago said taking additional financial responsibilities can accelerate how quickly retirees spend down their savings, which can lead to delayed retirement or returning to the workforce later in life–-especially as unexpected expenses, such as healthcare costs, pile up. Additionally, Santiago noted that these trends can limit generational wealth. 

“If you spend it all taking care of others, it increases the risk that you could lose the thing that you would pass on to your children,” said Santiago. Examples she provided included homes or life insurance. 

For Faye, success with retirement planning includes clients being honest and realistic about how much they would need to save to support whoever they choose once they retire, and already adding that into their expenses prior to the transition to help create spending limits. 

The advice is going to be to prioritize themselves,” said Faye. “You have to make sure that your own financial plan is sound, before  you try to help the children’s financial plan. This way, the entire structure doesn’t topple just because you are over-extended.”

Overall, both experts emphasized communication within households about money, especially since the topic is generally avoided. 

“People just assume you have [money],” said Faye. “And then they just expect it for you to give it. When the money conversation is had, most people–who do not want to take advantage of you–will understand that you have that limit and then make the adjustment. But we don’t have the conversations.” 

For Santiago, addressing the issue requires a cultural shift toward better financial education and being more accepting of community support systems. 

Santiago noted that people are taught how to budget, but not invest long term. 

“Financial literacy, and wealth management are not the same thing,” she said. 

As seniors navigate retirement and the financial realities that come with dependents or long-term caretaking, experts say communication, planning and education are crucial. Without a plan, what is meant to be support for family members can quickly turn into a strain on personal resources and a risk to assets already owned.

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