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Parents Strained By Jobless Kids


The recession hit young men harder than any other age group, the Wall Street Journal reports today, with unemployment rates for male high school grads age 20 to 24 at a whopping 22.4%. But that’s only part of the story: The parents of these 20-somethings often bear the brunt of the cost of their unemployment, as they move back home and depend on mom and dad for money, food and housing.

Some 59% of parents financially support their adult, non-student children (ages 18 to 39), according to a 2011 study by the National Endowment for Financial Education. Nearly half (48%) help their adult kids with living expenses, 41% with transportation costs, and 29% with spending money.  “This is happening more than I’ve ever seen it,” says Benjamin Tobias, the founder of Tobias Financial Advisors in Plantation, Florida. “There have always been some people who had to help out their children, but lately it’s an avalanche.”

The problem with this is that a lot of parents are compromising their retirement to help out the kids. The result: “They may have to retire much later or retire without the same lifestyle they’re used to,” he says.  In fact, in a new study by ING Direct, 27% of people in their 50s say that their children compromised their ability to save for retirement.

Of course, it’s natural to want to help out your kids.  But you need to set limits, Tobias says. Here are his tips on how to do it:

1. Talk to children about their financial needs. “Sit down with your kids and find out how much money they think they need,” he says. Make a list of all of their expenses, from food to entertainment to car payments to student loan bills.  You should also make sure your child understands what a budget is (consider showing him how to use a budgeting site like and how to live on one.

2. Help cut down their expenses to a minimum. Look at his or her list of expenses and see where you can make cuts, he says. So for example, if your child has a fancy car, see if he can trade it in for a significantly less expensive one; if your child goes out to dinner with his friends often, let him know this needs to stop.

3. Only pay for the essentials. Tobias says that parents should only pay for the essentials like food or letting him live under your roof.  “Do not pay for extras like entertainment or vacations,” he says.  Paying for something like grad school is risky as well, he says — especially considering your child can get financial aid or loans to foot that bill.


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    • Catey, Thanks for considering Santa Maria, CA as a good retirement location. I believe your writings have merit.

    • I have two children. One very succesful and currently earning $60,000 base a year with plenty of overtime opportunities. She graduated with a four year degree and is currently working on her Master’s. We paid $60,000 for her first four years of college and could afford to pay. My other child is unapproachable. He went to college for 27 credit hours then decided it wasn’t for him. He got married, divorced, had a child and then asked to move back in with us. Since then he’s done nothing but go from one horrible opportunity to another. My wife and I are raising the granddaughter and it’s expensive. We are somewhat wealthy so we can take it in stride. I started with nothing and amassed a small fortune through opportune investing and hard work. I look at my son and wonder why he turned out the way he did. There is no easy answer. He’s intelligent and good looking but he’s still a child at 23. I’m not sure what the answer is but I keep hoping he will grow up one day. In the meantime we enjoy our grandchild and you take what life gives you.

    • Very much true about the situation today!!!!

      Unemployed young men nowadays are so much to worry about not because they will be there still to be supported but future is at stake!!!

      I hope the government will be able to do something for them!!…

    • We are talking about the same parents who raised irresponsible kids? Don’t you think that is the case of the kettle calling the pot black?

    • When I was young I could not wait to leave home and work. Many children today think just the opposite. I am not sure why. It may be prosperity. Since Vietnam we have been very prosperous and I don’t think we know how to handle it. My parents suffered through wars and the depression. I didn’t go through anything like that. For the most part I had a good life despite the fact I earned everything and paid for everything for 47 years. I retired last year. I would still like to work but not possible now. My kids have no interest in work and they prey upon our compassion to sustain them. Helping them hurts them.And it stops tomorrow .. the end of 99 weeks of unemployment insurance. Work or live in your car.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.