Many of my clients are approaching or already in retirement and want to feel confident that their hard-earned savings will support them through both life’s highs and lows. But this goal can sometimes be complicated by the desire to continue supporting adult children financially—whether it’s helping with a down payment on a home, covering grandchildren’s educational expenses, or providing a financial cushion during unexpected setbacks.

It’s completely natural to want to help your children thrive, even after they’ve flown the nest. But what happens when that support starts to strain your own finances?

While your intentions come from a place of love and care, overextending yourself can jeopardize your own financial security, especially as you near retirement. The good news is that with careful planning, clear boundaries, and a thoughtful approach, it’s possible to provide for your adult children while still protecting your own financial future.

The Potential Cost of Supporting Adult Children Financially

As the economic landscape becomes more uncertain, many adult children are turning to their parents for financial support. In fact, a recent survey by Savings.com revealed that 50% of parents with children over 18 provide some financial assistance— the highest percentage in the past three years.

While it’s only natural to want to help your kids succeed, supporting adult children financially can come at a steep price. The same report found that over 60% of parents have compromised their own financial security in the process.

There’s nothing wrong with offering help, as long as it doesn’t come at the expense of your own future. That’s why it’s important to ensure that any help you give won’t require you to delay retirement, reduce your lifestyle, or, in a worst-case scenario, depend on your children for financial support down the road.

6 Practical Steps for Supporting Adult Children Financially Without Sacrificing Your Future

If supporting your adult children financially is a priority, here are some practical steps you can take to help them while protecting your own financial security:

#1: Prioritize Your Retirement Goals

Your financial security should be your top priority, especially as you near retirement. Before offering financial support to your adult children, take a moment to evaluate whether you have enough saved to live comfortably and handle unexpected expenses in the future.

Now is the time to maximize your retirement contributions, particularly if there’s a gap between your current savings and your retirement goals. Here are some actionable steps you can take to strengthen your future:

• Contribute the maximum allowed. In 2025, you can contribute up to $23,500 to a 401(k) or similar plan and $7,000 to a traditional or Roth IRA.
• Secure your employer’s match. Contribute enough to take full advantage of any matching funds your employer offers. This is essentially free money for your future.
• Take advantage of catch-up contributions. If you’re 50 or older, you can contribute an additional $7,500 to your 401(k) or similar plan and an extra $1,000 to an IRA.
• Consider enhanced catch-up contribution limits. For those aged 60 to 63, the SECURE 2.0 Act allows an additional $11,250 in contributions to your 401(k), 403(b), or governmental 457 plan, well above the standard catch-up amount.

It’s perfectly fine to delay supporting your adult children financially until you’re confident in your own future. By prioritizing your financial well-being, you’re building a strong foundation for long-term stability and minimizing the likelihood of needing to depend on your children for support down the road.

#2: Set Clear Financial Boundaries When Supporting Adult Children Financially

Setting clear boundaries is key when supporting adult children financially. Without boundaries, it’s easy to overextend yourself, which can negatively impact your savings and long-term goals.

By defining what you’re willing and able to provide, you protect your own financial future while still offering support. For example, declining to co-sign a loan for your child can be a wise decision. If they default, you’d be responsible not only for the debt but also for any impact on your credit and peace of mind.

Boundaries also help prevent resentment or stress from building up over time and ensure you’re helping in ways that are sustainable. If you do decide to offer financial assistance, consider making one-time gifts instead of ongoing support. This allows you to provide a meaningful benefit without creating long-term dependence.

Remember, offering emotional support or guiding your children to other resources can often be just as valuable as direct financial assistance. Over time, setting these boundaries tends to foster healthier relationships and strengthen financial resilience for everyone involved.

#3: Give Strategically

If supporting your adult children financially is important to you, consider developing a giving strategy that aligns with both your financial goals and your desire to help. This plan can include specific amounts for things like a home down payment or education expenses, as well as the time frame for these contributions.

For those in the later stages of life, strategic giving can help you transfer wealth to your children in a tax-efficient way, while you’re still here to see its impact. In 2025, you can gift up to $19,000 per beneficiary without triggering the federal gift tax, making it easier to share your wealth while minimizing taxes.

You might also consider helping your grandchildren with educational expenses or covering healthcare costs. By paying these expenses directly to the institution or provider, you can support your children while avoiding the tax implications of large financial gifts.

#4: Consider Loans Instead of Gifts When Supporting Adult Children Financially

If your adult children need financial help but you’re concerned about the impact of gifting on your long-term financial security, consider offering a loan instead. This allows you to support them in the short term while still maintaining control over your finances and preserving your retirement goals.

Keep in mind that the IRS has specific guidelines for family loans to ensure they are treated as genuine loans, not disguised gifts. For loans above $10,000, the IRS requires that the interest rate be at least equal to the applicable federal rate (AFR).

Also, be sure to clearly outline the terms of the loan, including repayment schedules and interest rates, to avoid any confusion or potential tax issues. A written agreement helps set expectations and ensure both parties are on the same page, making it a more structured and sustainable way to provide support.

#5: Focus on Building Your Children’s Financial Independence

When supporting your adult children financially, the goal should be to help them achieve financial independence—not to provide ongoing assistance. Instead of simply giving money, focus on offering advice, resources, and guidance that empower them to take charge of their own financial future.

Encourage them to create a budget, start saving, or seek professional financial advice. While it may be tempting to solve their problems with money, teaching them to manage their finances will give them the tools they need for long-term stability and confidence.

Clear communication is also essential. Don’t be afraid to have honest conversations with your children about your own financial situation and retirement goals.

While they may not always agree with your decisions, they will appreciate your transparency. Setting expectations early ensures that everyone understands your limitations and the reasoning behind your approach, fostering a sense of mutual respect and understanding.

#6: Involve Your Financial Advisor When Supporting Adult Children

If supporting your adult children financially is important to you, it’s wise to work with your financial advisor to ensure your generosity doesn’t come at the expense of your long-term goals. Together, you can build this support into your overall financial plan and assess how different levels of assistance may impact your retirement, cash flow, and future security.

Your advisor can also help you explore tax-efficient strategies, such as gifting appreciated assets, using annual gift exclusions, or leveraging tax-advantaged accounts to make your support go further. In some cases, they can even help facilitate family conversations, offering an objective perspective to keep emotions in check and ensure everyone is on the same page.

By involving your advisor early on, you’ll be better equipped to provide meaningful support to your children without compromising your own financial security.

Supporting Your Family Without Compromising Your Future

Supporting your adult children financially doesn’t have to come at the cost of your retirement security. By prioritizing your own financial well-being, you can help set your children up for success while still safeguarding your future.

Remember, you don’t have to navigate these decisions alone. Professional guidance can be incredibly valuable, especially when emotions are involved. By working with an experienced advisor, you can ensure that the support you provide your children stays within the boundaries of your long-term financial plan.

At Align Financial, our mission is to help you use your money to create a life you love—whether that’s strengthening your family’s finances or building a secure and fulfilling retirement. Reach out to learn more about how we help our clients succeed and to see if we’re the right fit for your planning needs.