An Annual Cash Gift Will Not Make Young Adults More Spoiled Than They Already Are
The time when you used to load diapers and baby food onto the conveyor belt in the supermarket checkout line and commiserate with the cashier about how expensive children are seems like ancient history now. Your kids are now adults, and they have been consistently employed for years. You are no longer at the stage where you include their day-to-day expenses in your budget, but if you are being realistic, maybe you should. You still help your children with unexpected expenses, but maybe those expenses are easier to anticipate than you give them credit for being. Think about how much money you gave your children in 2021, and then think about how much you gave them in 2020. If it is below $15,000, then it is within the limits of the annual gift tax exclusion, which means that you could simply write them a check at Christmas this year and be sure that you have given them as much money as you are going to give them, at least until next Christmas. By doing this, you can stop the emergency cash requests from your kids from interfering with your plans to save for retirement. If you are still concerned about whether you will have enough to retire, contact a Tampa estate planning attorney.
The Annual Gift Tax Exclusion Can Help You Budget for Your Adult Children’s Expenses
Money Talks News recently published the sobering results of a survey by Savings.com. For more than a quarter of parents of young adults, their overgrown fledglings represent a serious impediment to saving for retirement. These are some of the highlights of the survey:
- The survey participants were 1,000 people who each have at least one child above the age of 18.
- 26 percent of the survey respondents have given money to their adult son or daughter in the past year.
- The average amount of money that the parents who give money to their children contribute toward their children’s expenses is $1,000 per month, which averages out to $12,000 per year. The money usually goes to the adult children’s health insurance, groceries, college tuition, and transportation. Most of the recipients of this money are below the age of 30.
- About two thirds of young adults who receive financial support from their parents also live with their parents. If this describes your kids and you are not including their expenses in your budget, you are in denial.
- The parents who spend an average of $1,000 per month on their children’s expenses contribute an average of $605 per month toward their own retirement savings.
If you are giving your children money, it is probably because of economic necessity. There is no need to stop helping your adult children in difficult financial times, but you do need a reality check about your own retirement.
Contact David Toback With Questions About Generosity in Every Generation
A Central Florida estate planning lawyer can help you provide as much financial stability for your family as you can with the resources you have. Contact David Toback to set up a consultation.