Retirement & Financial Planning Report

Over half of under-34's surveyed say they would not be able to afford their current lifestyles without parental support. Image: wavebreakmedia/

Financial support from parents “has become the norm” for young adult children, sometimes to the detriment of the parents’ ability to save for their retirement, according to a report from Merrill Lynch and the Age Wave research firm.

The report, based on a survey of 2,700 adults with an emphasis on those under age 34, cites common factors such as student loan debt, credit card debt and low starting salaries as the main reasons. Eighty-one percent of young adults have some form of debt, with 45 percent each having education and credit card debt, well above the 28 percent with home mortgage debt.


Also, 82 percent of young adults say that making money is the top source of pressure they feel, well above the numbers who feel pressure to buy a home, marry or have children. Similarly, 75 percent define being an adult as being financially independent from their parents, again well above those other life touchstones.

Of those under 34, 70 percent “have received support from their parents in the last year, and more than half of those in their early thirties continue to receive some support. Two-thirds of early adults say they can rely on their parents to help with their expenses, and 58 percent say they would not be able to afford their current lifestyles without parental support.”

Support from parents to children ages 18-34 amounts to more than $500 billion a year, it said, only a quarter of which goes to educational costs. Most of the support takes the form of regular or occasional payments to help with everyday expenses” for costs such as cell phones, food, car expenses, vacations, rent or mortgage payments and student loan repayments. “As the early adult life stage has extended, parents provide their children far more support over a far longer period,” it said.

While such support generally is given willingly—and accepted with gratitude—“it may not work out so well for parents in the long run. That $500 billion spent on adult children represents twice what parents put into their retirement accounts, and nearly three-fourths say they have put their children’s interests ahead of their own need to save for retirement,” the report said.

Also, “Continued support can delay progress toward early adults’ independence, and it can add to their anxiety that they are falling behind their peers.”