With a recession looming and the costs of essentials like housing and food continuing to rise and remain high, many middle-aged Americans are finding that finances are tight not only for themselves, but for their aging parents as well.
According to a 2025 survey from LendingTree, nearly 1 in 4 Americans (28%) currently donate money or help cover bills for their parents, their partner’s parents, or both, while another 23% hope to do so in the future (1).
According to the US Census, about 2.4 million American parents receive support from their adult children, with an average amount of $3,749 per year (2).
A significant portion of those adult children are married, and this can create tension when spouses disagree about how much to help.
Let’s say you and your spouse are in your early 50s, your two children are in high school and you hope to pay for college for each of them, and you still have enough left to enjoy your retirement in a little over a decade.
With $500,000 in savings and a good income between you, you can pretty much manage it. But then a snag arises: Your spouse’s parents have fallen on tough financial times after their father-in-law needed multiple rounds of cancer treatment.
The low-premium private senior health insurance plan they chose (which seemed like a great idea at the time) didn’t cover all the out-of-network specialists, medications, and home care they needed, and now they’ve exhausted a lot of their savings and can barely keep their house.
His wife wants him to tap into his savings to help his parents cover their monthly expenses while they get back on their feet. A few thousand dollars won’t break the bank, but you don’t dare help in case they trust you.
Let’s look at some numbers to decide how much you can afford.
Their goals as a family are to pay for their children’s college, help keep their in-laws afloat, and retire at age 60 with adequate savings.
The first step is, if possible, to obtain professional advice from a financial advisor or certified financial planner. If you have good credit, you can qualify for loans at a favorable rate, and the expert can advise you to go that route and leave your investments alone so they can continue to grow. But assuming you decide to tap into your savings, let’s see how it would work.
First, let’s consider the cost of college.
By far the most affordable option is for your children to live at home and attend a state school or community college. They can still receive a top-notch education, but keep their living expenses low. With in-state tuition, books, and college supplies averaging $10,970 per year (compared to total costs of $27,146 per year for those living on campus), we’re looking at about $88,000 for both kids, probably a little more when they go to college, as costs continue to rise (3).
If they want to continue their education or training abroad, perhaps you can consider agreeing to contribute what you would do for the local school and have them make up the difference. It’s still a significant savings compared to peers doing it alone.
Secondly, you want to help your in-laws after the difficulties they have been through in recent years. Fortunately, with a house paid for, they don’t have to pay rent or mortgage.
Taking into account the average operating cost of a home ($1,072 per month according to the American Housing Survey) (4), and the average retired household’s spending of $3,098 per month (not including housing) according to the U.S. Consumer Expenditure Surveys (5), your in-laws’ living expenses could be around $4,170, probably more, given their ongoing medical costs.
Could you agree to give them a little help (say, $500 a month) for the next six months while they regain their footing? That would give you time to have all the conversations you need before making important decisions, like whether it’s time to sell your home, tap into your home equity, or seek long-term care.
Read more: Are you richer than you think? 5 clear signs that you are head and shoulders above the average American
Even setting aside that you’re still earning income, contributing to retirement savings, and watching other assets, like your home and investments, increase in value, after those two big hits to your savings, you’d be left with $409,000. That hurts and is a major setback. But guess what? That’s more than three times the median retirement balance of $115,000 for their 45- to 54-year-old age group.
Although the “magic number” that Americans say is necessary for a comfortable retirement is $1.4 million in savings, very few people reach that milestone. The average retirement savings peaks at around $200,000 between ages 65 and 74 (6).
Don’t forget that since you have worked all your life, you will also be entitled to social security when the time comes. If you can delay collecting benefits until your full retirement age or even beyond (up to age 70), your payments will be higher.
Once you’re past this costly stage of life, you may want to consider making catch-up contributions to your 401(k), which are available to people over age 50, and consider finding a financial advisor or certified financial planner who can help you make the best retirement planning decisions.
And lastly, remember to celebrate the victories! Her children’s grandfather survived cancer and will soon see them fly off to college and make their way in the world.
Whatever you and your wife decide to do, make the decision together, as equal partners. Fidelity’s most recent report, Couples and Money, found that 45% of couples have at least occasional money fights and 25% say money conflicts are their biggest relationship challenge (7).
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Loan Tree (1); US. Census (2); Education data (3); Federal Reserve Bank of Minneapolis (4); smart asset (5); Federal Reserve (6); Fidelity (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
