With a recession looming and the cost of essentials like housing and food continuing to rise and remain high, many middle-aged Americans are finding that their finances are tight, not only for themselves, but also for their aging parents.
According to a 2025 survey from LendingTree, nearly one in four Americans (28%) currently gives money to or helps pay bills for their parents, their partner’s parents, or both, while 23% expect to do so in the future (1).
According to the U.S. Census, approximately 2.4 million American parents receive assistance from their adult children, with the median amount being $3,749 per year (2).
A significant portion of these adult children are married themselves, which can create tension when spouses disagree on how much support to provide.
Let’s say you and your spouse are in your early 50s, both of your children are in high school, and you hope to pay for college for each of them – and you still have enough left over to enjoy retirement in a little over a decade.
With $500,000 in savings and a good income between them, you can just about manage it. But then a problem arises: Your spouse’s parents experienced financial difficulties after your father-in-law needed several rounds of cancer treatment.
The low-premium private health insurance plan for seniors they chose—which seemed like a great idea at the time—didn’t cover all the out-of-network specialists, medications, and in-home care he needed, and now they’ve drained much of their savings and are barely able to hold on to their home.
Your wife wants you to dip into your nest egg to help her parents cover their monthly expenses while they get back on their feet. A few thousand dollars won’t break the bank, but you are hesitant to help them in case they come to rely on you.
Let’s look at some numbers to decide what you can afford.
Your goals as a family are to pay for your children’s college education, help keep your in-laws afloat, and retire at age 60 with an adequate nest egg.
The first step, if possible, is to obtain professional advice from a financial advisor or certified financial planner. If you have good credit, you may qualify for loans at a favorable rate, and the expert can advise you to follow this path and not disrupt your investments so that they can continue to grow. But assuming you decide to dip into your savings, let’s see how that would work.
First, consider the cost of college.
By far the most economical option is to have your children live at home and attend a public school or community college. They can still receive a world-class education, but keep their living expenses low. With in-state tuition, books, and college supplies averaging $10,970 per year (compared to $27,146 per year for those living on campus), you’re looking at about $88,000 for both kids — probably a bit more by the time they get to college, as costs continue to climb (3).
If they wish to continue their education or training further, you might consider agreeing to contribute what you would to the local school and asking them to make up the difference. This still represents a significant savings compared to their peers going it alone.
Secondly, you want to help your in-laws after the difficulties they have gone through in recent years. Fortunately, with a paid-off house, they don’t have to pay rent or mortgage payments.
Taking into account the average cost of running a home ($1,072 per month according to the American Housing Survey) (4) and the average retirement household spending of $3,098 per month (not including housing) according to the US Consumer Expenditure Surveys (5), your in-laws’ living expenses could come to about $4,170 – probably more, considering their ongoing medical costs.
Would you be willing to provide them with a little help (say, $500 a month) for the next six months while they get back on their feet? This would give you time to have all the conversations you need before making bigger decisions, like whether it’s time to sell their home, tap into their home equity, or seek long-term care.
Read more: Are you richer than you think? 5 Clear Signs You’re Hitting Well Above the US Average
Even putting aside the fact that you continue to earn an income, contribute to your retirement savings, and see other assets, like your home and investments, appreciate in value, after these two big hits to your nest egg, you would be left with $409,000. This hurts and is a significant setback. But guess what? That’s more than three times the median retirement balance of $115,000 for your 45-54 age group.
Although Americans say the “magic number” needed for a comfortable retirement is $1.4 million in savings, very few people reach that milestone. Average retirement savings peak at around $200,000 between ages 65 and 74 (6).
Remember, because you’ve worked your whole life, you’ll also be eligible for Social Security when the time comes. If you can delay paying benefits until your full retirement age or even beyond (up to age 70), your payments will be higher.
Once you get through this very expensive period of life, you may want to consider making catch-up contributions to your 401(k), which are available to those over age 50, and consider hiring a financial advisor or certified financial planner who can help you make the best retirement planning decisions.
And finally, don’t forget to celebrate the victories! Your children’s grandfather is a cancer survivor, and he’ll soon see them head off to college and make their own paths in the world.
Whatever you and your wife choose to do, make the decision together, as equal partners. Fidelity’s most recent report, Couples and Money, found that 45% of partners at least occasionally have money conflicts and 25% say money conflicts are their biggest relationship challenge (7).
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Loan tree (1); WE. Census (2); Education data (3); Federal Reserve Bank of Minneapolis (4); Smart Asset (5); Federal Reserve (6); Loyalty (7)
This article provides information only and should not be considered advice. It is provided without warranty of any kind.
