This is how much money parents lose supporting their adult children

Leaving the nest doesn’t always mean entering financial independence for kids these days, and parents are paying a high price for it.

Some 80% of parents are covering or have covered basic expenses for their children after they turn 18, which could cost parents $227,000 in lost savings over the course of retirement, a new study from personal finance website NerdWallet found.

It calculated the impact on savings if costs of adult children had been put into a retirement savings account such as a 401(k) or IRA instead.

“As parents, we tend to want to do everything we can to help our children succeed. But sometimes we focus on the present at the expense of the future,” said Andrea Coombes, NerdWallet’s investing expert.

Most adult children live with their parents for more than a year after they turn 18, the survey of 2,000 U.S. adults found, and 3 in 5 parents have a child 18 or older living with them. This comes in part due to rising housing costs and down payments, which keep more young adults from living on their own, noted Mark Hamrick, a senior economic analyst at personal-finance site Bankrate.com.

“Parents and their children are spending prolonged periods of time together,” he said. “One unfortunate unintended result is that many parents are shepherding more of their children’s financial obligations for longer periods of time. This inevitably damages many parents’ ability to save both for the short- and long-term.”

Student debt, which has surpassed $1.4 billion, has also played a role in increasing reliance of young people on parents. Some 28% of parents have paid for part or all of their adult children’s tuition or loans. The average parent now takes out $21,000 in loans for a college education for their child.

They are also paying for many basic, day-to-day costs for their adult children, including groceries (56%), health insurance (40%) and rent or housing outside the family home (21%). Some parents are also covering or have covered their adult child’s cellphone bill (39%) and car insurance (34%).

But the failure to launch for many young people is not for lack of trying, Hamrick notes. “Certainly between the lingering impacts of the financial crisis and Great Recession, and collateral damage from mounting student loan debt, young people have faced more than their fair share of challenges in recent years,” he said.

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