As baby boomers age, many are turning to their adult children for financial help. Nearly a third of millennials (29%) and members of Generation X (32%) reported providing some financial support to their parents, according to a new survey from health insurance marketplace GoHealth.
But as consumers help aging parents with everything from health care costs to everyday expenses, many are also putting their own financial futures at risk.
Medical bills a top financial concern
For many, helping a parent out financially is linked with a medical issue of some kind. The survey found that of those offering financial help to their parents, 59% of millennials and 69% of Gen Xers were paying some or all of their parents’ health care bills.
The resulting financial obligations can be large. Of those respondents helping with medical bills, 37% of millennials and 45% of Gen Xers said they provided more than $10,000 of their own funds in the past year to do so.
At the same time, some other, less-expensive forms of assistance are more common among those millennials and Gen Xers helping an elderly parent. The survey found that…
- 84% of both millennials and Gen Xers help pay parents’ monthly utility bills
- 83% of both millennials and Gen Xers help pay grocery and food bills
- 58% of millennials and 66% of Gen Xers help pay car or transportation expenses
- 53% of millennials and 50% of Gen Xers help pay entertainment or fitness costs
The genders differ in terms of providing financial support to their parents, with millennial men twice as likely to help out than women, and Gen X men 2.5 times more likely to do so. One reason for this discrepancy could be the gender wage gap making such assistance more affordable for men.
The survey also found that adult children who live with their parents were 3 times more likely to provide financial support than those who do not.
Gen Xers, millennials worry about their own financial futures
While their intentions may be good, some of those supporting their parents in this way are making choices that may have an adverse impact on their own finances. For example, of those who currently give or who plan to offer financial assistance to their parents, 44% of millennials and 55% of Gen Xers said such help would likely involve taking on debt.
Although some strategies, such as debt consolidation, could save money for those helping their mother or father with the bills, these acts of kindness can also jeopardize long-term financial security. Among respondents helping their parents…
- 23% of millennials and 23% of Gen Xers said they would not be able to save enough money for their retirement
- 56% of millennials and 73% of Gen Xers said they would at least need to delay their retirement
Approximately two-thirds of millennials (66%) and Gen Xers (67%) who are helping their parents (or who plan to do so) said it has already impacted their own financial planning or will do so at some point.
On top of that, 82% of millennials and 86% of Gen Xers giving this assistance said they worried about whether they would have enough money to simultaneously support their parents and themselves.
Methodology: GoHealth surveyed 2,000 adults who have a relationship with living parents during Aug. 27-31, 2020. Of the survey sample, 1,000 were millennials and 1,000 were members of Generation X. GoHealth defined millennials as those between 24 and 39, and Generation X as those aged 40-55. GoHealth defined baby boomers as those aged 56 to 74.