By David Wignall

The great majority of wealthy parents are giving their adult children financial support, according to a new report released by Ameriprise Financial. In a survey of 545 parents with an average of roughly $500,000 in investible assets, all of whom had adult children, 76% say they are footing the bill for their children's big-ticket items, like down payments on a home or graduate degrees. Nearly two-thirds (63%) are covering ongoing costs like phone bills and other living costs. And 98% are willing to let adult children live with them after they turn 21.

The results demonstrate the prominent role the "Bank of Mom and Dad" now plays in the everyday life of America's mass affluent class. But that bank may not be making a profit. While 65% of parents believe they have enough money to live comfortably in retirement, 36% worry that supporting adult children could hamper their plans, according to the survey.

Deana Healy, Ameriprise's vice president of financial planning and advice, says poor communication is part of the problem. If parents don't set clear expectations about which expenses are off-limits and when support might end, they can end up on the hook later in life. To make matters worse, their children might not take the appropriate steps to establish financial independence.

Rising costs. Several factors may be contributing to the growing role affluent parents play in their children's financial lives.

First, the cost of living has been rising rapidly in real terms, especially in major U.S. cities. As rents soar and the early-career job market looks increasingly shaky, children are turning to their parents for support.

"There are certainly headwinds in today's environment that perhaps make this more challenging for a young adult entering young adulthood," says Healy.

Young people are also achieving major life milestones -- such as full-time work, marriage, homeownership, and parenthood -- later in life. For example, in 2021, 39% of 21-year-olds were working full time, compared with 64% in 1980, according to Pew Research. About two-thirds (68%) of 25-year-olds were living outside their parents' home, compared with 84% in 1980. Much of the slowdown is due to rising college participation, as college enrollees delay their income-earning years.

But the wealth of older Americans also explains some of the trend. Because today's baby boomers are the richest generation in history, they have more resources to dedicate to their children. Many are therefore choosing to give their children a leg up -- whether that means cosigning for a credit card, paying for medical school, or buying a house.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 26, 2025 06:05 ET (10:05 GMT)

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