Wealth Wise is Kiplinger’s advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.
Dear Wealth Wise: I have two grown children. Both were self-sufficient until recently. I’m still working, but my small business income has declined. I had a major home maintenance project and a low-mileage car that was totaled in an accident. My son was laid off from his municipal job and my daughter went back to graduate school. My children need help. What can I afford to give them without overly compromising my income needs? My savings are modest and I’m afraid I’ll run out of money. My home is worth $700,000 and I had hoped it would be a legacy vacation home for my family. — The Perfect Storm
Dear Perfect Storm: Today’s economy looks strong on paper. In May, the U.S. labor market added 172,000 nonfarm jobs, and the unemployment rate was only 4.3%. But those numbers don’t tell the whole story.
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The Center for American Progress says that despite a relatively low unemployment rate, a growing number of Americans are underemployed. And the share of workers not currently in the labor force who want a job rose in 2025 and currently sits above pre-pandemic levels.
This could help explain why young adults are increasingly leaning on their parents for financial support, otherwise known as “subsidized adulting.”
As of late 2025, a good 75% of U.S. parents were supporting at least one adult child financially, according to a recent AARP survey. Thrivent’s fifth annual Boomerang Kids Survey, meanwhile, found that 44% of parents with a child aged 18 to 35 had one move back home at some point.
If you find yourself in this reader’s shoes — wanting to help your family but watching your own income slide — you are facing a tough balancing act. You’re clearly hesitant to tap the equity in your home or to downsize, and would rather pass the home down as an inheritance.
It’s a tough situation, but it’s not uncommon today. Here’s what the experts suggest.
Only provide the financial help you can afford
As a parent, it’s natural to want to do what you can for your children, even if they’re old enough to be self-sufficient. But if you’re going to provide help, you need to put your own needs first.
“Helping adult children is one of the most difficult retirement planning decisions because it is a financial and emotional one,” says Doug Carey, CFA, founder and owner of WealthTrace. “The question is not ‘How much do my children need?’ It’s, ‘How much can I give without putting myself in a position where I later need financial help?'”
Carey recommends totaling your required expenses, including housing costs, property taxes, insurance, utilities, food, health care, transportation, debt payments, and taxes. Don’t forget retirement plan contributions. From there, you can see how much money you might have left over to help your children.
To make this exercise easier, Carey suggests using a budgeting app to track your recurring expenses. He also recommends planning for the worst if your business has not been doing particularly well.
“It would also be a good idea to assume your income will be lower in the future as a safety buffer,” he says.
Have money in reserve
The fact that you recently had a major home repair and car loss should serve as a wake-up call, says Carey, that you need cash reserves.
“You don’t want to use any of the money from a reserve fund for children since you might need it soon for emergencies,” he explains.
Given that your business income has been slowing, you may want to set aside at least six months of living expenses in case things get worse and you need to dip into your savings to cover your basic needs. Having that money in a high-yield savings account could help you avoid tapping your IRA or 401(k) prematurely, allowing those investments to keep growing.
Family support should be temporary
If you have limited financial resources, it’s important that any help you give your children not be open-ended, Carey insists.
“Make it very concrete, such as contributing $1,000 per month [toward your kids’ expenses] for three months to start. Then review after that,” he says. “It is also a good idea to pay specific bills if you can rather than just giving money.”
Be very careful with tapping home equity
Your $700,000 home may be your largest financial asset. But Carey says you should be extremely cautious before doing things like taking out a home equity loan or HELOC.
“Home equity is a great source of emergency money for those in retirement,” Carey explains. “If the markets have several bad years or there is a serious medical emergency where you need to use those funds, you might not have enough if you use [that money] for children.”
As it is, only 64% of Americans feel confident they have enough money to retire comfortably, according to recent data from the Employee Benefit Research Institute. If you’re behind on savings, you don’t want to do anything in the near term to reduce the equity you have in your home.
If you have to say no, say no
Saying no to your kids when they need financial help is not easy. But Georgia Bruggeman, Founder and CEO at Meridian Financial Advisors, LLC, says you absolutely need to take care of yourself first.
“Your kids are young and have time on their side to figure things out,” Bruggeman says. “Bailing them out will not help them learn financial resiliency.”
Bruggeman says that if graduate school has become too expensive, you could suggest that your daughter take a break or talk to the school about other options for moving forward. And while you can’t snap your fingers and magically get your son a job offer, government layoffs are often more cushioned than private sector ones. Municipal jobs often come with specific severance packages, unused paid time off payouts, or solid unemployment benefits. Your son shoulde check his civil service options or look into other government agencies that value his experience.
“You need to be an example to your kids and show them that taking care of yourself is not selfish,” Bruggeman insists.
Carey agrees. While you may have some room to offer support, it’s crucial to prioritize your financial well-being.
“Do not compromise your own retirement to solve a temporary problem for your children,” he says. “You can help support them, but make sure you are financially secure first.”
A word from Wealth Wise
Our reader didn’t say whether the $700,000 house is her primary home or if she lives near her adult kids. That’s an important detail; she could invite her children to move in with her temporarily. That solution could provide solid financial help to them without dipping into her savings.
If the house is a second vacation home, she could sell it and invest that money to provide an income stream. At a 4% withdrawal rate, her additional monthly income would be about $2,300. She could also explore renting out the home, though she has said the house has needed repairs. It’s possible that renting might involve more financial stress than she could bear now.
We think it’s wonderful that she wants to hold onto the home as a legacy for her children. But lowering her family’s financial stress by selling could be the best gift of all.
Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts, in this advice column, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.
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