Well Into Adulthood and Still Getting Money From Their Parents

Parents have always supported their children into adulthood, from funding weddings to buying a home. Now the financial umbilical cord extends much later into adulthood.

About 59% of parents said they helped their young adult children financially in the past year, according to a report released Thursday by the Pew Research Center that focused on adults under age 35. (This question hadn’t been asked in prior surveys.) More young adults are also living with their parents. Among adults under age 25, 57% live with their parents, up from 53% in 1993.

Parental support is continuing later in life because younger people now take longer to reach many adult milestones—and getting there is more expensive than it has been for past generations, economists and researchers said. There is also a larger wealth gap between older Americans and younger ones, giving some parents more means and reason to help. In short, adulthood no longer means moving off the parental payroll.

“That transition has gotten later and later, for a lot of different reasons. Now it’s age 25, 30, 35, 40,” said Sarah Behr, founder of Simplify Financial Planning in San Francisco.

Kami Loukipoudis, a 39-year-old director of design, and husband Adam Stojanik, a 39-year-old high-school teacher, knew they would need parental assistance to buy in New York’s expensive home market.

“We could pay a mortgage, but that down payment was the absolute crusher,” Stojanik said. “The idea of trying to save up on our own—as long as we were paying rents in NY, would’ve taken 300 years.”

Loukipoudis’s mother gave them the money for a 10% down payment on a two-bedroom apartment in the New York borough of Queens.

The young-adult allowance

Adult children aren’t necessarily getting larger checks from their parents, but they are staying on the parental payroll for longer than previous generations, according to Marla Ripoll, professor of economics at the University of Pittsburgh who studied the trend by analysing payments from parents to adult children over a 20-year span.

Ripoll found that 14% of adult children receive a transfer of money from their parents at least once in any given year, and roughly half get financial help at some point within that period. Those rates have been stable for years. What has changed is that the transfers now continue for much longer, she found. This longer-term help might be a drag on social mobility, as it becomes even harder for young people from lower-income families to catch up, researchers said.

Of the young adult children who said they received financial help from a parent in the past year, most said they put it toward day-to-day household expenses, such as phone bills and subscriptions to streaming services like Netflix, according to the Pew survey.

The amount of money and the frequency of help varies by age; those on the older end of the 18-to-34 cohort are far likelier to say they are completely financially independent from their parents compared with younger adult children, as many in the latter group are completing their education. Nearly a third of young adult children between the ages of 30 and 34 say they still get parental help.

Heather McAfee, a 33-year-old physical therapist in Austin, Texas, said she lived at home between 2019 and 2021; otherwise she wouldn’t have been able to make progress paying down her student loans while rent prices in her area remained so high. The plan worked—she has since reduced her student-debt balance from $83,000 to $15,000.

“It helped tremendously,” she said. “I didn’t have to take out more loans to pay for apartment living or anything like that. That stress was gone.”

Setting limits on financial help

A little more than half of parents surveyed said that having their adult children home brought them closer together or improved their relationship, but nearly 20% said it dented their personal finances.

Financial advisers often find themselves in the tricky position of speaking to both ends of the equation: adult children who need assistance and the parents determined to help children well into middle age, within limits.

Whereas previous generations would step into a greater sense of financial independence in their early 20s, young adult children today are often unable to reach similar markers of such independence—living on their own or buying their first home, for example—without greater financial resources.

Families typically don’t set concrete rules around when financial help will happen and what the money is used for, which can result in surprises down the road, Behr said.

In one case, Behr’s clients received the down payment they needed to purchase a condo from a generous mother-in-law. Years later, that same mother-in-law told them she expected a payout once the couple sold the home.

The hand-me-down payment

Down-payment help from parents—a given for many first-time home buyers—is growing thanks to higher home prices and elevated mortgage rates.

About a fifth of first-time home buyers said they got help from a relative or friend when pulling together the money needed for a down payment, according to a 2023 survey of home buyers and sellers from the National Association of Realtors. And 38% of home buyers under age 30 received help with the down payment from their parents, according to a survey this spring by Redfin.

Wealthy families often go further than helping with the down payment. They become a true bank of mom and dad and write a mortgage. The Internal Revenue Service sets minimum levels of interest for such loans, which remain significantly cheaper than current mortgage rates.

Timothy Burke, chief executive at National Family Mortgage, which facilitates such loans, said parents are often frustrated on behalf of their house-hunting children. High interest rates and the cutthroat housing market are holding their children back from reaching a milestone the parents themselves were more easily able to access.

Mei Chao, a 41-year-old stay-at-home mom, and her husband, William Chao, a 44-year-old information-technology specialist, bought their first house as a couple in 2017. They relied on financial help from her husband’s two sisters and his mother to help them bridge a gap in their house-buying timeline. While they waited to sell William’s Manhattan condo, they used the money from the family to purchase the new house in Queens.

The structure of the agreements got tricky. After selling the condo in Manhattan, Mei and her husband were able to repay his sisters in full. But they didn’t have enough money left over from the sale to do the same for Mei’s mother-in-law. So they kept the mother-in-law’s name on the deed to the house—a concession Mei said they were both more than happy to make.

“Ultimately, it all worked out. I’m glad his mother pushed us,” Mei said. “Without her help, I could not say we would have this home.”

Charities, distant relatives and even pets are benefiting from surprise inheritances. They can thank people without children.

Not having children is becoming more common, both among millennials and older people. A July Pew Research Center analysis found that 20% of U.S. adults age 50 and older hadn’t had children.

And many of these people don’t have wills. An AARP survey found half of childless people age 50-plus who live alone have a will, compared with 57% of others that age. Those without wills have less control over what happens to their money, which often ends up in the hands of people who don’t expect it.

This phenomenon of a surprise inheritance is common enough that it has a name: the laughing heir .

“All they do is get the money and go, ‘Ah ha ha, look at that,’ ” said Michael Ettinger , an estate lawyer in New York.

Kelley Gilpin McKeig, a 64-year-old healthcare-industry consultant in Ridgefield, Wash., received a phone call several years ago saying her cousin Nick Caldwell left behind money in a savings account. They hadn’t been in touch for 20 years.

“I thought it was a scam,” she said. “Nobody else in our family had heard that he had passed.”

She hunted down his death certificate and a news article and learned he had died about a year and a half before in a workplace accident.

Caldwell, who was in his 50s, had died without a will. His estate was split among cousins and an uncle. It took about two years for the money to be distributed because of the paperwork and court approval involved. Gilpin McKeig’s share was $2,300.

Afterward, she updated her will to make sure what she has doesn’t go to “just anybody down the line, or cousins I don’t care about.”

Who inherits

There are trillions of dollars at stake as baby boomers age.

Most people leave their money to spouses and children when they die. A 2021 analysis of Federal Reserve survey data found that 82% of heirs’ inheritances came from parents.

People with no children say they want to leave a greater share of their estates to charity, friends and extended family , according to research by two Yale law professors that surveyed 9,000 U.S. adults.

Rebecca Fornwalt, a 33-year-old writer, created a trust after landing a book deal. While her heirs are her parents, her backup heirs include her sister and about a half-dozen close friends. She set aside $15,000 for the care of each of her two dogs.

Susan Lassiter-Lyons , a financial coach in Florence, Ariz., said one childless client is leaving equal interests in her home to her two nephews. Another is leaving her home to a man she has been friends with for a long time.

“She broke his heart years ago and she feels guilted into leaving him property,” Lassiter-Lyons said.

A client who is a former escort estranged from her family is leaving her estate to two friends and to charity.

Lassiter-Lyons, who doesn’t have children, set up a trust for her two dogs should she and her wife die. The pet guardian, her wife’s sister, would live in their house while taking care of the dogs. When the dogs die, she inherits the house.

In the Yale study, people without descendants—children or grandchildren—intended to give 10% of their estates to charity, on average, more than triple the intended amount of those with descendants.

The Jewish Community Foundation of Los Angeles, which manages $1.3 billion of assets, a few years ago added an “heirless donors” section to its website that profiles donors and talks about building a legacy.

“Fifteen years ago, we never talked about child-free donors at all,” said Lew Groner , the foundation’s vice president for marketing.

In the absence of a will, heirs are determined by state law . Assets can wind up in the state’s hands. In New York, for example, $240 million in unclaimed funds over the past 10 years has arrived from estates of the deceased, not including real estate, according to the state comptroller’s office. In California, it is $54.3 million.

Hard questions

Financial advisers say a far bigger concern than who gets what is making sure there is enough money and support for a comfortable old age, because clients without children can’t call on them for help.

“I hope there is something left to leave,” said Stephanie Maxfield, a 43-year-old therapist in southern Colorado. “But if there isn’t, I think that’s OK, too.”

She said she would like to leave something to her partner’s nieces and nephews, as well as animal shelters and domestic-violence shelters. Her best friend is a beneficiary.

Choosing an estate executor and who would handle money and health decisions on your behalf can be difficult when you don’t have children, financial advisers say. Using a promised inheritance as a reward for taking care of you when you are older isn’t a good solution, said Jay Zigmont , an investment adviser focused on childless people.

“Unfortunately, it is relatively common to see family members who are in the will decide to opt for cheaper medical care (or similar decisions) in order to protect what they will be inheriting,” he said in an email.

Kirsten Tompkins, who is from Birmingham, U.K., and works in consulting, along with her husband divided their estate among their dozen nieces and nephews.

Choosing heirs was the easy part. What is hard is figuring out whom to ask for help as she and her husband get older, she said.

“A lot of us are at an age where we are playing that role for our parents,” the 50-year-old said, referring to tasks such as providing tech support and taking parents to medical appointments. “Who is going to do that for us?”