A survey reveals that over half of Gen X parents are concerned about providing financial support for their children as they grow up.

• A U.S. Bank survey found that more than half of Gen X parents worry that their children will require financial assistance in adulthood.
• That's compared with 37% of all parents, per the data.
• Gen X is facing unique challenges that can heighten these concerns.

While mapping out her financial future, Adinah Caro-Greene must consider a factor that may have been less significant for previous generations: her child.

The employee benefits broker stated that she has observed the economic difficulties faced by her Gen Z son and his peers due to the increase in education, housing, and healthcare costs. One of her son's long-term financial objectives is to completely pay off an inherited rental property that he may reside in.

"Caro-Greene, 45, stated that it is uniquely challenging for kids today. Witnessing the difficulties faced by her son's generation has motivated her to take action."

A majority of Gen X parents, specifically 53%, are concerned about their child needing financial support in adulthood, compared to 37% of parents across all generations, according to a U.S. Bank survey of approximately 2,500 adults released earlier this year.

Gen X faces financial pressures as they simultaneously support their parents in retirement and their kids as they come of age. This generation is particularly concerned about their children's financial future due to runaway inflation following the pandemic.

A 'worried' generation

Tom Thiegs, a family wealth coach at U.S. Bank's Ascent Private Capital Management, stated that Gen Xers have experienced less-than-ideal economic conditions throughout their lives, which can contribute to feelings of uncertainty. Notably, he emphasized that they have witnessed four of the five largest stock market crashes in history during their lifetime.

Thiegs stated that this group was among the first to primarily rely on 401K plans for retirement instead of pensions. Now, they are also concerned about the longevity of Social Security and Medicare, as they contributed to these systems throughout their adult lives.

Clients that Thiegs talks to are concerned, but not to the point of being paralyzed, he stated. These clients have experienced economic downturns before and have developed a mindset of being prepared to handle any unexpected challenges.

""Although it may seem like all doom and gloom for Gen X, there's an understanding that we'll be able to figure it out," he said."

According to a U.S. Bank survey, 79% of Gen X parents believe their children are capable of managing their finances successfully, regardless of potential consequences.

The economic stress experienced by Gen Z is due to factors beyond their control, such as rising prices for groceries and higher housing costs, according to Thiegs.

The bank of mom and dad

Parents she knows commonly give money to their young-adult children, especially in the San Francisco area where the cost of living is high, according to Caro-Greene. She added that this is an especially challenging time due to a tough job market for those entering the white-collar workforce.

The average monthly expenses for parents providing financial support to their children in corporate America is $1,384. This figure increases to $1,515 when considering only Gen Z offspring.

According to Marguerita Cheng, a mother and certified financial planner, the question of how long parents should continue to pay for their children's expenses into adulthood is a complex one with no one-size-fits-all answer.

""While I would never discourage you from assisting your child, it's crucial to establish boundaries or limitations when providing help," stated Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland."

Cheng advised parents to refrain from assisting their child to the extent that they would deplete their savings and face financial difficulties in retirement. Additionally, she suggested that parents could attempt to eliminate the taboo surrounding discussing money and the embarrassment surrounding choices such as residing at home following college graduation.

A useful tool for finding clear guidelines is setting limits or distributing funds incrementally over a set timeframe.

According to Thiegs, Gen X's experiences have led them to view their money differently and consider how to use it in a way that includes children and other family members.

"Thiegs stated that they have expanded their perspective on money to a more comprehensive approach, which involves not only managing finances but also considering long-term goals for their life."