I Asked ChatGPT If Middle-Class Households Can Afford To Help Adult Kids Without Hurting Their Retirements — Here’s the Tradeoff

In an era of higher costs of living, it’s unsurprising that many middle-class parents are stepping in to help their adult children stay afloat beyond the college years.

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But as retirement looms closer and costs continue rising for parents, too, how much help is generous and how much is financially dangerous? I asked ChatGPT to help me look at the tradeoffs .

Financial support for adult children has become more common in recent years, likely due to higher costs of living and an evolving job market. ChatGPT drew on data from AARP that showed nearly three-quarters of parents are helping their adult children beyond the traditional college ages of 18 to 22 with housing, student loans, insurance premiums and even groceries.

For middle-income households that don’t have significant wealth, even a few hundred dollars per month that go into an adult child’s bank account versus retirement, can mean tens of thousands less invested over time. For parents in their 40s and 50s, that opportunity cost compounds quickly.

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In order to figure out if parents can afford to help their adult kids and still save well for retirement , ChatGPT laid out some simple but enlightening math: If parents redirect just $500 per month away from retirement toward their kids for five years, that’s $30,000 of money that could be earning around 6%(conservatively) on average if invested in traditional retirement accounts over 15 or 20 years.