The Rising Trend of Affluent Families Paying Adult Kids’ Bills
The role of wealthy parents in their adult children’s financial lives has become more significant than ever. A new report from Ameriprise Financial highlights just how much support is flowing from one generation to the next—and the concerns that come with it.
In a survey of 554 parents, each holding an average of $750,000 in investible assets, the majority admitted they are paying for major expenses on behalf of their adult children. From home down payments to graduate school tuition, the numbers reveal a growing reliance on parental backing well into adulthood.
How Far the Financial Support Goes
The findings show a wide range of assistance:
76% of parents are helping with large-scale costs such as homes and advanced education.
63% are still covering regular bills like cell phone plans and everyday living expenses.
An overwhelming 98% would allow their children to live at home after age 21.
This support, often referred to as the “Bank of Mom and Dad,” is shaping how young adults manage milestones that once signaled independence. Yet, this generosity carries its own risks.
Balancing Retirement and Family Obligations
Freepik | The lack of clear financial timelines and boundaries can trap families and hinder adult children’s maturity.
While 65% of parents feel confident they have enough to retire comfortably, 36% worry that ongoing support could interfere with their long-term financial security. According to Ameriprise, the real issue often lies in communication.
Deana Healy, vice president of financial planning and advice at Ameriprise, explains that many parents fail to set clear boundaries. Without firm expectations on what expenses are covered—or when support will stop—families may find themselves in difficult positions later. In turn, adult children may postpone building the skills and habits needed for full financial independence.
Why Wealthy Families Are Stepping In
Several factors are fueling this trend of extended support:
1. Rising costs of living – Housing, groceries, and everyday expenses continue to rise, particularly in major U.S. cities.
2. A shifting job market – Early-career roles are less stable, making it harder for young adults to establish a strong financial base.
3. Delayed milestones – According to Pew Research, just 39% of 21-year-olds were working full time in 2021, compared with 64% in 1980. Similarly, 68% of 25-year-olds were living outside their parents’ homes in 2021, down from 84% in 1980. Many of these delays are linked to extended college years, leaving fewer immediate income opportunities.
Healy notes, “There are certainly headwinds in today’s environment that perhaps make this more challenging for a young adult entering young adulthood.”
The Role of Generational Wealth
It’s not just about higher living costs. The wealth of today’s baby boomers also plays a major role. As the richest generation in American history, many boomers have the means to provide extensive financial help. Whether it’s co-signing for a loan, paying tuition for medical school, or even buying a home outright, the resources are there—and many parents are choosing to give their children a boost.
But this generosity raises an important question: how much help is too much? While support can open doors for younger generations, it can also create dependencies that stretch well into adulthood.
A Growing Concern Among the Wealthy
Freepik | Parents must balance loving financial help for their adult kids with ensuring their own secure future.
The Ameriprise survey sheds light on a delicate balance. Parents want to ensure their children succeed, yet they also worry about their own futures. Supporting adult children through big financial milestones may feel like an act of love, but it could also become a long-term burden if expectations remain vague.
Clear communication, realistic boundaries, and proactive financial planning appear to be the keys to preventing problems down the road. Without them, the “Bank of Mom and Dad” may eventually find itself overdrawn.
Generosity Meets Responsibility
The generosity of wealthy parents is shaping the way young adults approach life’s biggest steps, from education to housing. Yet, the Ameriprise findings make it clear that ongoing financial support carries trade-offs. Rising living costs, delayed independence, and the wealth gap between generations all contribute to the trend.
For parents, the challenge lies in striking the right balance—providing meaningful help without sacrificing their own retirement security. For adult children, the responsibility is to build toward independence while recognizing the value and limits of family support.