Don’t Let Supporting Your Adult Children Ruin Your Retirement

Our guide explains why many older New Zealanders are supporting their adult children, the risks and downsides of doing so, must-know facts and frequently asked questions.

Updated 19 June 2025

Summary:

One of the biggest and most controversial questions that many New Zealanders ultimately grapple with is whether to support their adult children financially. Back in the 80s, it was common for almost all New Zealanders to move out of home at around 18 years old, find a job and get on with life - whether that was marriage, buying a house, overseas travel, etc. Often, New Zealanders were largely “on their own” and weren’t expecting their parents to continue supporting them into their 20s and 30s, and never into their 40s and 50s.
However, a cultural shift has taken place. It's far more common for younger generations (Gen Z and Millennials) to be still either living at home, getting financial support (through shared healthcare or subscription plans), or expecting significant sums for their first house deposit (such as expecting "the Bank of Mum and Dad" to provide the 20% deposit needed to buy their first property).
As baby boomers are either in or about to enter retirement age, many will be asking themselves whether they should continue to be as generous as they have been in the past (while needing to adjust to their new way of life and income thanks to NZ Super).
With New Zealanders living longer than ever before, it’s never been more important to clearly plan out how much is reasonable to support adult children and when to ultimately stop supporting adult children and let them stand on their own two feet.
The biggest reason why parents nearing retirement continue to support adult children is that they fear they will fracture the relationship if they "turn off the cash tap". While this might happen, the risk of continuing to fuel their lifestyles indefinitely will have negative consequences all around (for them and you).
The best way to approach this problem is to have an open and honest conversation about the family's financial situation and ensure a transition process. You don't have to go "cold turkey" on them, but you do have to manage their expectations to ensure you don't risk the relationship. Try to set clear boundaries about what you will and won't do moving forward.

This is a complicated subject and one our research team has put a lot of time into. To help you understand everything that's involved with ongoing financial support, our guides covers:

Important: Our trusted guide, How Much Do You Need to Retire Comfortably in New Zealand, explains what you need to know should this be of interest.

MoneyHub Founder Christopher Walsh explains why never saying no to adult children is seriously threatening retirements:

"As a nation, we're facing a retirement crisis partly fueled by parents draining their savings to support adult children with lifestyle and everyday costs. Many parents unwittingly compromise their financial future by prioritising immediate financial help to cover house deposits, weddings, holidays and general 'wants' and 'nice to haves' for their adult children. It's not just about generosity; it's about safeguarding your retirement because it will be miserable if your money runs out.

Adding to that, there's also a healthcare dilemma that will, for many, become an issue. Parents who've excessively funded their children's lifestyles often find themselves struggling to cover their medical costs when they want to avoid long waitlists for things like hip and knee replacements. This can create financial and emotional burdens while waiting months or years for a routine elective surgery that could have been avoided with spare money.

I believe that some parents delay downsizing because they're accommodating regular visits and stays from adult children. This locks up capital in unproductive assets and minimises investment growth. This not only impacts financial flexibility in retirement but also adds unnecessary stress.

We are witnessing a worrying dependency cycle. Ongoing financial support is stunting adult children's financial independence and responsibility. This affects parents' financial well-being and limits the children's ability to be self-sufficient - there's a risk that demands for money go on and on into an adult child's 40s, 50s and even 60s.

This is a serious issue - money devoted to adult children are resources not spent on personal goals, travel, hobbies, or other retirement plans. Many retirees express regret over missed opportunities and unfulfilled dreams due to financial choices made in support of their adult children - life is too short, and it's your money, after all.

It's an emotional subject, but we've published a definitive guide to raise awareness and make it clear that if this applies to you, you're far from alone. However, moving forward requires communication within your family".

Christopher Walsh
MoneyHub Founder

What do the statistics show about the parent and child dynamic?

While most research on statistics of young adults is done overseas, some of these trends will be similar in New Zealand. Recent research includes:

Understanding Why the Phenomenon of New Zealanders Supporting Their Adult Children Happening

Understanding Why the Phenomenon of New Zealanders Supporting Their Adult Children is Happening

The dynamic of financially supporting adult children while ensuring a secure retirement for oneself is an increasingly common scenario for many parents today. This situation reflects broader economic trends, including rising living costs and challenging job markets. The main reasons that parents continue to support their children financially are:

Rising inflation and cost of living (impacting ability to save for a house deposit).
Stagnant wages (leading to difficulties for young Kiwis making ends meet).
Rising house prices (and higher deposits required).
Cultural acceptance (adult children choosing to live at home for longer).

The biggest reason New Zealanders choose to support their adult children is to help jumpstart their wealth-building journey. Due to compounding returns, the earlier adult children can get a foothold on wealth-building, the better off they are. However, what starts as a house deposit can, for some parents, lead to buying cars, paying for daycare, taking adult children on holiday, paying for services like HelloFresh - the list goes on, and the demands can become endless.

What’s the flow-on psychological impact on parents and children?

The decision to financially support adult children is not purely economic but deeply emotional. Parents may feel a sense of duty or a desire to prevent their children from experiencing hardship. However, this support can also bring frustration or disappointment in the parents' financial sacrifices and their children's seeming lack of progress.

For adult children, relying on parents can lead to mixed emotions, including gratitude, guilt, and a hit to their self-esteem. The comfort of a safety net can sometimes reduce the urgency to attain financial independence, potentially leading to a cycle of dependency that is hard to break.

Where are the most common places where New Zealand parents nearing retirement support their adult children?

Typical examples include:

House Deposit (“Bank of Mum and Dad”)
Free Rent/Board/Food/Utilities (letting adult children live at home)
Free Childcare/Nannying (taking care of grandkids)
Paying for weddings
University and course fees
Paying for family holidays (travel with parents and adult kids)
Paying for adult children to travel/take a holiday (without parents)
Paying for or gifting cars
Pet-sitting (while adult children go on holiday)
Sending adult children money or paying their bills (even after they’ve left home)
Delegated responsibilities (e.g. paying off debts, paying rent, gifting meals and food, making car payments)
Acting as a safety net should there be urgent bills to pay

If you want to support your adult children, what’s the best way to do it?

1. Communicating About Finances
One critical component in navigating the support of adult children is open and honest communication about finances. Discussions should cover the current support and long-term financial goals, expectations, and the steps necessary to achieve independence. These conversations can be challenging but essential for setting boundaries and creating a plan that supports the parents' retirement goals and the children's journey to financial autonomy.

2. Educating on Financial Literacy.
A pivotal aspect of supporting adult children in a way that does not jeopardise one's retirement is providing them with the tools and knowledge to manage their finances effectively. Financial literacy, often not taught in traditional education systems, is crucial for young adults to navigate economic realities. Parents can play a significant role in this education through direct teaching or facilitating access to financial planning resources and professionals.

3. Creating a Strategic Support Plan
For parents, creating a strategic plan for supporting adult children is vital. This plan should consider the parents' retirement goals, the specific needs of their children, and the most effective ways to provide support without enabling dependency. This might include setting up a structured financial assistance plan with clear expectations and deadlines, encouraging adult children to contribute to household expenses if they live at home, or matching their savings towards specific goals to encourage financial responsibility.

The Downsides of Supporting Adult Children

Supporting adult children, whether financially or non-financially, can have profound and lasting impacts on the parents' retirement plans and overall financial health. While it's natural for parents to want to help their children succeed, ongoing support can lead to significant consequences that may compromise the quality and security of their retirement years. The impacts of this are outlined below:

Delayed Retirement/Staying in Employment Longer

One of the most immediate impacts of supporting adult children is the potential delay in retirement. Parents may need to work additional years to replenish savings that they’re gifting (or maintain a higher income level rather than semi retire) to support their adult children. This postpones the freedom and lifestyle changes anticipated with retirement and adds additional years of stress and work-related pressures.

Diminished Retirement Savings

Consistently diverting funds to support adult children can significantly diminish retirement savings. Money that could have been invested and compounded over time is instead used for immediate expenses, reducing the overall nest egg available for retirement. This reduction in savings can limit retirement lifestyle choices and may necessitate cuts in spending during retirement years.

Increased Financial Risk

Supporting adult children often involves assuming additional financial risk. Parents may guarantee mortgages, take on debt, or withdraw from KiwiSaver funds (if over 65) or other investments, actions that can have long-term financial repercussions. These decisions affect parents' financial stability and expose them to legal and financial liabilities should their children fail to meet their financial obligations.

Emotional Stress and Relationship Strain

Beyond financial impacts, supporting adult children can lead to emotional stress and strain relationships. Parents may feel resentment or frustration over their children's dependency, while children may feel guilt or inadequacy. These dynamics can lead to tension within the family, affecting the quality of relationships and overall family harmony.

Opportunity Costs

The resources devoted to supporting adult children represent significant opportunity costs. Money, time, and energy spent on adult children are resources not used for personal goals, travel, hobbies, or other retirement plans. As parents reflect on their retirement years, this can lead to feelings of regret or missed opportunities given the amount of time and money that may be invested.

Health Impacts

The financial and emotional stress associated with supporting adult children can have adverse effects on parents' health. Stress can lead to a range of health issues, including heart disease, anxiety, depression, and sleep disturbances. These health concerns can complicate retirement further, potentially leading to higher medical costs and a reduced quality of life.

Increased Dependency

Continued financial or non-financial support can inadvertently encourage a cycle of dependency, making it challenging for adult children to become fully independent. This dependency can persist even as parents enter retirement, potentially leading to a situation where adult children are still reliant on their parents' support during their most vulnerable years.

Significant Impacts on Inheritance and Estate Planning

Supporting adult children can also impact estate planning and asset distribution. Money intended for retirement or inheritance may be depleted, leading to adjustments in how assets are allocated among children and other beneficiaries. This can complicate estate planning and may lead to unintended consequences for the distribution of assets after death.

Psychological Impacts on Adult Children

One of the biggest downsides of enabling your adult children financially is that you create a safety net that turns into a hammock. Adult children who are too reliant on parental support may not learn to navigate life's routine challenges independently, which can lead to various psychological issues, including anxiety, depression, and addiction.

For anyone still financially aiding their adult children, consider if your support is truly helping them progress or simply making them comfortable. Is your assistance fostering their independence or hindering it?

If adult children live with you, they should contribute a fair share to household expenses. Accepting money from them teaches the real-world lesson that nothing is free and creates a similar mechanism that they’ll need to get used to (e.g. paying rent to a landlord or making mortgage payments to a bank). While it’s common in some cultures to not charge rent or board, instilling some of these financial habits or expectations can still be useful (even if it’s a nominal amount - like $50 a week to contribute towards food costs).

A safety net is necessary in certain cases, but ensure your child doesn't mistake your support for a permanent comfort zone. Job-seeking adult children should contribute to the household in any way they can.

Must-Know Facts For Anyone Considering or Currently Supporting Adult Children

It's an emotional subject, and everyone is different. However, adult children can get greedy if there's a constant flow from the money tap. If you're considering financing your adult children, there are a lot of risks. Before reading our must-know facts below, we suggest the following course of action.

Establish clear financial boundaries with your children: The earlier you have a serious conversation about financial boundaries, the better your relationship with your adult children will be in the long run.
Understand that a sense of entitlement is not good for kids in the long run: You're not an unlimited piggy bank for your adult kids - the sooner they recognise this, the better. If you can't reset expectations early, they may bring this mindset to other relationships or circumstances, harming their future lives.
Your influence is either going to be helpful financial support, family welfare or enable destructive behaviour: There is good support and bad support. If you support your adult kids financially and they aren't grateful, don't fuel their behaviour or bad habits - it's a zero-sum game. We suggest cutting them off financially if they refuse to help themselves (like not getting a job or continuing to spend frivolously).

Our must-know facts help plan what is best for your needs while considering adult children:

If you do continue supporting your adult children financially, make sure your retirement numbers are rock solid.

Parents must evaluate their financial status and retirement projections and discuss financial boundaries with their children. Adjusting their retirement to meet their adult children's financial demands isn't a sustainable solution for most people as there is going to be a certain point when the money runs out. When that happens, anyone retired or close to it will find themselves relying on NZ Super which struggles to provide anything more than the basics.

Be wary not to gaslight yourself into overly sacrificing for your child.

Your children are now fully grown adults. They’re no longer kids, and they’ll be fine without your support. Don't feel pressured to support your adult children if you don't want to. You've likely done so much for your children already, and while parents will always have a strong affiliation to try and support their kids, don't feel you have to keep supporting them indefinitely. Know that you've equipped them with the mental and financial tools to succeed, and try to prioritise your happiness and financial security.

Any adult child wants the best for their parents and would not want their parents to sacrifice their remaining happiness and time on this earth to continue supporting their children. Try to live your life and know that your kids will be fine - they likely have jobs, they likely married or have a partner, it is time for them to live within their means and appreciate that.

If you want to help, consider financial support as an early inheritance.

As covered in Bill Perkins's book Die with Zero, there is an argument that you should give any inheritance to your children when they can use it the best (e.g., in their 20s and 30s rather than their 50s and 60s). For example, $300,000 to your adult kids at age 30 would be extremely valuable for a 20% deposit today. Still, $900,000 in 20 years when they're 50 may not be as useful (given they will have already paid down the bulk of their mortgage and may have built up a reasonable net worth).

Giving inheritance when it makes the most sense in their lives for them is a unique way to view inheritances, but it can be much more effective for everyone if the parents can afford to give it. Too often, adult children get inheritances when they are near retirement age, and they either don't have the health or desire to spend that money (but they absolutely would have been able to spend that money when they were younger).

Funding non-essential education (e.g. private schools) will, for many, delay retirement plans.

Some New Zealand parents question whether to send their kids to a state school or a private school. While obvious, the cost of private school is immense (especially if you're sending them to a private school from Year 1 or Year 7 onwards). Private schools in New Zealand can cost anywhere from $20,000 to $40,000+ per year.

Supporting adult children can be great in some contexts.

Thinking back to when you were in your 20s, it's likely that if your parents gave you 20% of the house deposit as soon as you left high school or got your first job, you would be far further ahead financially (both in a net worth context but also a stress reduction context) than you would have been without that. Often, many New Zealanders have to spend a decade saving in the first portion of their careers (usually earning lower wages) to save up for a 10% or 20% deposit.

Lucky New Zealanders who are able to get on the property ladder earlier thanks to financial support from their parents are usually far wealthier than those who have had to go at it alone. As a result, supporting adult children can absolutely accelerate their wealth-building journey and put them in a far better position 30 years down the line.

However, whether or not this is a good decision for them is very different to whether it will make financial sense for you (as the parents) and will heavily depend on where they are in their life (and where you are in your life/retirement).

Consider non-financial ways to support adult children that aren’t a burden to you.

There are many non-financial ways to support your adult children (that don't harm your retirement). Whether that's being a Guarantor for their mortgage, providing emotional support or babysitting, using a family offset bank account to minimise mortgage interest, there are many ways that you can help your adult children without it impacting your retirement.

You won’t live forever.

Adult children need to learn these core financial (non-financial) skills sooner rather than later, as none of us live forever. If adult children continue to rely on their parents for everything, it will be much more difficult for them to continue with their lives once these parents pass away.

We’re not all guaranteed to live to 100 (and in fact, life expectancy in New Zealand is just over 80), so we need to instil a sense of independence in our adult children as early as possible.

Reaffirm that you are still there to support them (just in changing ways).

There's a narrative shift that happens when children go from young adult (18 - 25) to fully responsible adult (25+). While this line has been blurred recently, there is still a natural shift in expectations between what's expected once children become full-grown adults.

Just because you set healthy limits on supporting your children financially doesn't mean you don't love them. It also doesn't mean you can't support them in other ways (such as emotional support, babysitting if they have young kids of their own, or always having a spare room for them to come visit whenever they like).

Frequently Asked Questions

Who should be supporting their adult children when you're close to retirement?

You can provide your adult children with different levels or tiers of support. If you're close to retirement and are still concerned about not having enough to last your full retirement period, maybe the type of support you provide changes (focusing on more non-financial support).

If you have significantly more than you need for retirement, providing financial support to your adult children (e.g., gifting them a house deposit or paying for their wedding) will not significantly impact your retirement. Whatever you decide, make sure the extent of support you give is appropriate for where you are on your retirement journey.

When is it okay to financially support my adult children?

Whenever you feel comfortable, you need no minimum net worth to support your adult children, nor are there any guidelines on how much is too much. Just support your adult children in whatever way feels most appropriate for you.

When is it NOT okay to financially support my adult children?

Generally, if you're significantly behind on retirement savings or your adult children are in a strong financial position already (or they're extremely ungrateful and/or continually expect funds from you), it's okay not to continue supporting them.

Do I need to support my adult children forever financially? What happens if I don't support them?

No. Don't ever feel like you have to financially support your adult children financially, even if your friends and peers are doing the same. Everyone is living their own lives, and we each have different goals and aspirations that we're working towards (particularly in retirement).

Is it bad to support my adult children?

No - in fact, it's quite common. Today, significantly more parents are supporting their adult children than in the past. It's about supporting your adult children in the right way that doesn't impact their lives or your retirement.

How much should I support my adult children in retirement?

It depends. For some wealthier New Zealanders who might be able to financially support their children to get into first homes or pay for weddings (preventing people from having to get into deep credit card debt), it will fast-track their children's wealth-building journey and have a minimum impact on their retirement. For others, it might not be feasible. Ultimately, how much you "should" support your children depends entirely on your comfort and wealth levels.

Will financially supporting my adult children mean I have to work longer?

Not always, but in some cases, yes. If you're significantly supporting your kids (such as paying for house deposits, weddings, cars, etc.) and you are far behind your retirement savings goals, then any shortfall created from money going towards your kids will need to be funded through other means (for which work is one way to plug that gap).

Having said that, if you’re getting other sources of wealth (such as inheritance) or you’re already at your retirement savings target, you may not need to work any longer (as you’ll be giving the “additional funds” above and beyond what you need for retirement to your kids.

Will supporting my adult children enable their bad spending behaviours and harm their independence?

Potentially, the more you give, the more this will become their baseline expectation. Be careful not to continually provide more and more to your children unrestrained. Assure them this is for a specific time period, and there are limits to your generosity. Try to encourage independence, gradually reduce financial support, and set clear timelines for independence.

Know This First: What is the “Failure to Launch” Syndrome?

"Failure to launch" syndrome is when a young adult struggles to transition into the expected roles and responsibilities of adulthood, leading to a delay or failure in leaving their parental home and achieving independence. This syndrome is not an official medical or psychological diagnosis but is used colloquially to describe a pattern of behaviour seen in some individuals.

Characteristics of "failure to launch" syndrome can include:

Lack of motivation or drive to pursue employment or education (and potentially sit on the MSD jobseeker support benefit for extended periods of time).
Difficulty in managing responsibilities such as chores, financial obligations, or personal care.
Reliance on parents for financial support and housing.
Struggles with decision-making and taking initiative.
Avoidance of responsibilities and challenges associated with adulthood.

Various factors can contribute to this syndrome, including economic challenges (can’t find a job), overprotective parenting, lack of preparedness for adult responsibilities, and mental health issues.

Related guides: