Nowadays, many parents are extending financial support to their children far beyond their childhood years. A 2025 AARP survey found that nearly 75 percent of parents are providing financial assistance to their adult children. According to the study, on average, parents are providing about $7,000 annually, with a median contribution of $1,400.
Adding to this trend is the fact that many recent college graduates are struggling to find employment. The unemployment rate for recent graduates during the second quarter of 2025 averaged around 5 percent, according to the New York Federal Reserve.
So, what’s a parent to do? We spoke with area financial experts about the best ways parents can assist their children without compromising their own financial futures.
A Perfect Storm
Curo Private Wealth CEO and partner Anne McCabe estimates that “25 to 30 percent of our clients are helping their adult children in some form or fashion financially. … Perhaps the kids are back at home, living with the parents, and so obviously they’re helping with housing expenses. We have some clients who are helping to pay off their kids’ student loans. … So those are probably the two biggest areas that we’re seeing [parents] help with. But it’s definitely very common.”
McCabe, who is based in Reston, says part of the issue is how expensive it is to live in Northern Virginia. “And then you throw on top of that the hard time that recent grads are having with finding a job, and I think it’s kind of a perfect storm.” For some perspective on the current landscape, the median monthly rental price of a one-bedroom apartment in Tysons was $2,335 in October, according to Apartment List.
“I’m seeing a lot more kids who are not in a position to take care of themselves financially,” says Kristan Anderson, director of retirement plan services and financial planning at West Financial Services in McLean. “It’s really hard around here. … Even [with] two people making six figures, depending on your lifestyle, it’s a tough place to live. And it wasn’t always that way.”
Bryan Beatty, a partner at Egan, Berger & Weiner in Vienna, says he’s seen an increase in the past two or three years of parents helping their adult children “more in the area of getting started.” This includes helping them buy a home or fund a Roth IRA after college. “They want them to develop good habits.”
Setting a Support Budget
Advisers caution parents to establish their own retirement plans before giving to adult children. “We tell our clients all the time they need to make sure that their retirement is taken care of. And also that they’ve planned for a long-term care event, because the likelihood that all of us will need some sort of long-term care expense in our lives is extremely high, and it is extremely expensive. So if you don’t take that into your own calculations, that can really dramatically impact your financial plan in a negative way,” McCabe says.
She also advises that you carefully budget for how much support you’re willing to offer. “One of the things we always say to clients is you can’t take a loan for retirement. … I really think it makes sense for them to crunch their own numbers and to really think about the family support bucket as one of their discretionary spending items. So just like you think about how much you’re going to spend on travel or shopping or eating out — you should also think of the family support bucket as one of those discretionary spending buckets.”
Anderson says, “You have to look at what your expenses are, what your savings for yourself is, and then if there’s money left over, then obviously you can help out. The other way of doing that is if you have assets that maybe you’ve inherited yourself that you can pass along down to kids. I think parents need to look into the future and ask themselves: Can they weather a storm like a really low market or a long-term care event or something and still have the resources to be able to support kids?”
Beatty works with clients to “make a line item in the plan, an actual spending goal, to give money away.” He talks with clients about how much they’re planning to give. “We have that active conversation. We put it in their financial plan … [and] if it doesn’t harm their plan, we like to encourage them to make it part of their plan.”
Thinking Beyond Cash
Financial planners say parents don’t always need to give cash to help adult children. One strategy is to transfer investment assets — particularly those with a low-cost basis — to children who are in a lower tax bracket. They can either keep the assets to start building their own portfolio or sell them and potentially owe less in capital gains taxes, giving them more usable funds.
“It’s a win-win for everybody,” Anderson says. She also recommends co-signing on a rental agreement or home purchase “if you know that your child is responsible” or adding them as an authorized user on your credit card to help them build credit. “I think those are low-cost ways to help out and build that foundation for them for the longer term, without having to generate cash flow.”
McCabe recalls a family that wanted to help their adult child with IVF treatments. One strategy she recommended was for the parents to pay some of the medical bills directly to the provider, since direct payments for medical or educational expenses don’t count toward the annual $19,000 gift-tax limit.
To offer additional support, they recommended transferring some of the father’s appreciated stock shares to the daughter. “Originally, they were thinking about just gifting cash, and we said, ‘No, you know, you’re sitting on this very highly appreciated stock. Let’s gift her some of these shares,’” McCabe says.
The Next Generation
Advisers also emphasize the importance of making cost-conscious college decisions, since up to $35,000 of leftover 529 funds can now be rolled into a Roth IRA. This can give young adults a strong early boost in retirement savings.
They also highlight a new tax-advantaged savings option known as “Trump Accounts” as part of the One Big Beautiful Bill Act, which are especially powerful when opened for newborns. Parents can contribute to these accounts for their grandchildren, much like the longstanding practice of grandparents funding 529 plans. These approaches can be a practical way to help the next generation while making the most of available tax benefits.
Encouraging Independence
The goal for most parents is ultimately for their children to thrive on their own. “The sooner we can get them to be independent, successful members of society and able to take care of themselves, the better it’s going to be for them in the long run,” McCabe says.
This means making sure their education includes a financial one. “I think one of the greatest things a parent can do for a college graduate is to take them in to see their financial adviser and get a plan from the start so they don’t live on more than they can afford to live on,” Beatty says. “I think it’s a great idea for you to make sure your kids have a plan when they first get out of school.”
Feature image, stock.adobe.com
This story originally ran in our January issue. For more stories like this, subscribe to Northern Virginia Magazine.
