When it comes to housing and money, when do parenting obligations end?

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There is no doubt that it’s hard to be a young adult right now. Between the high cost of housing, a challenging job market, and persistent inflation, people in their 20s and 30s are feeling the financial pinch, which means parents are supporting their kids well after graduation.

But while many parents are happy to provide continuing financial support – are they obligated to do so?

Should parents sacrifice their own goals, such as paying off their mortgage, downsizing or living their desired retirement? Once kids reach adulthood, finish school and start working, is it time for parents to assess their continuing support for their kids?

One major thing that kids are depending on their parents for well into adulthood is housing. A 2024 report by The Vanier Institute of the Family shows that 31 per cent of people between the ages of 25 and 29 live with at least one of their parents up, from just 17 per cent 30 years ago.

That’s a big shift and stems from how unaffordable housing has become: the mortgage payment-to-income ratio in many cities is ridiculously high (82 per cent in Toronto) and it can take years to save for a down payment (28 years in Vancouver.)

When planning their own finances, many parents are wondering if they can afford to set aside a chunk of money to give to their kids to help pay for things like a wedding or a down payment. A recent Fidelity Investment survey showed that 59 per cent of retirees are helping their adult kids financially with weddings, down payments and day-to-day living expenses.

For some parents, this isn’t a problem. But the reality is that the majority of parents simply cannot afford it. Supporting adult children puts a strain on their finances, affecting how much they can save in the years before retirement and how much money they will have to live on once they stop working.

Parents are often able to start ramping up their saving pretty aggressively in their 50s as the mortgage gets paid off and their kids leave home. This is a time in their life when people can load up their retirement fund, making up for those years when raising kids and paying a mortgage made it hard to save. But supporting adult kids can scuttle this plan, especially if the kids cannot contribute to household costs.

Then there’s the issues of the family home. Empty nesters might be looking to downsize. Selling their larger family home and renting a smaller condo or apartment can add a big chunk of money to their retirement nest egg.

But having an adult child that might need a place to stay for a while could change things. Parents who are forced to keep their big family home will need to pay all of the related costs – property tax, repairs and maintenance, and maybe a mortgage – and will be able to save less, or not at all.

Some parents like the idea of giving their kids a leg-up by holding on to the family home so they can pass it down, since buying a home is so unaffordable.

This can be a major retirement sacrifice for parents. Keeping a home with plenty of costs can eat up retirement savings faster than necessary. It can also limit the options – moving to a cheaper area or buying a cottage to live in might be impossible while holding on to the family home.

Parents can have more flexibility if they sell the family home. If they feel strongly about leaving the kids a legacy so they too can be homeowners, invest the proceeds of the sale and plan to give it to the kids when they are ready to buy their own home.

No matter what kind of financial help a parent is willing to provide, being upfront about it is crucial. Don’t keep them guessing – make it clear how much they will receive and when. This will help them make important life decisions like buying a home, saving for their kids’ higher education, and deciding whether they can take a chance on a new job.

Of course, everyone’s family situation is unique and deciding whether to help an adult child isn’t cut-and-dried. Things such as disabilities, mental-health issues, or serious illness can make supporting a child a necessity.

But despite the pressure parents feel to help their kids, they need to make sure this financial support won’t derail their retirement years. And it’s crucial to do this before cutting the cheque.

Anita Bruinsma is a Toronto-based financial coach and a parent of two teenage boys. You can find her at Clarity Personal Finance.