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Don’t let the big kids rule

By Jennie L. Phipps · Bankrate.com
Wednesday, August 1, 2012
Posted: 2 pm ET

My husband just emailed me about a job possibility for one of our children. While it is undoubtedly a good idea, my guess is that there's a snowball's chance in the hot place that our child will follow up and land the position.

We have five kids and all of them are self-supporting, but none of them are as far along in their careers as my husband and I were at the same age. I don't think it's a genetic character flaw. There are millions of people from the same generation who look at life and work in the same way our adult children do. They also have launched their careers at a time when salaries are stagnant and opportunities are not as plentiful as they were when I was hired for my first job -- sight unseen on the recommendation of my journalism professor. That doesn't happen anymore.

BMO Financial Group points to a University of Michigan study that says parents of adult children, regardless of their own age or income, are, on average, spending 10 percent of their household income supporting their grown-up offspring. At the same time, among this group of aging post-adolescents age 35 and younger, 35 percent told BMO in a separate study that they want to retire by age 60. Of those wishful thinkers, 25 percent haven't saved anything at all.

So, what should a parent do?

Don't be so generous, advises Tina Di Vito, head of the BMO Retirement Institute. "Remember the oxygen mask advice we are given when flying. Apply your own oxygen mask first," she says.

She also suggests these steps.

  • Talk it up. Provide young adults with  retirement planning information. Urge them to consider a Roth 401(k). Introduce them to your own financial adviser.
  • Don't be a doormat. Insist that adult children who are living at home pay rent. If asking for rent makes you feel guilty, consider investing the "rent" money in a retirement account for your child.
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