The Job Market for New Grads Is Lousy. How to Help Your Kid Without Ruining Your Retirement.

A tough job market for recent graduates is adding urgency to an age-old question for parents: How can I help my kid without jeopardizing my retirement?

At nearly 6%, the unemployment rate for college graduates ages 22 to 27 exceeds the national average of around 4%. This marks the reversal of a decades-long pattern where college grads fared better than “all workers.”

While the unemployment rate is largely holding steady, many companies have been in a holding pattern, not adding new jobs over uncertainty about President Donald Trump’s tariffs. What’s more, early data show that artificial intelligence might be starting to affect entry-level jobs in technology and finance.

These trends have joined the rising cost of housing and higher education to make it harder for young people to reach financial independence than it was for their parents or grandparents.

“A lot of the discourse assumes the young adults are slackers and the parents don’t have boundaries,” says Monica Johnson, a sociology professor at Washington State University, who studies the transition to adulthood. In reality, she says, “becoming financially self-sufficient just takes longer.”

Some parents worry that giving their adult children money will foster dependence, but overall the research doesn’t bear that out, Johnson says. For most families, the bigger concern is that financial assistance to grown children will cause the parents to save less for their own retirement—potentially risking a situation where the children need to step in to support their elderly parents down the line.

Here’s how to know what you can afford:

Set a “Support Budget”

Investment firms like Fidelity say workers should save 15% of their pretax income for retirement, including any company match. Treat retirement savings as an essential expense like your mortgage and calculate a “support budget” after accounting for that and other non-negotiables, says Alex Gonzalez, an advisor at Thrivent, a financial-services company.

For example, if you bring in $10,000 a month, plan to save $1,500 for retirement. If you need $6,000 for essential expenses, then the maximum amount you can afford to give your children is $2,500 a month. Limit such assistance to your cash flow, reducing dining out and other discretionary expenses if necessary.

Financial gifts above $19,000 per recipient in 2025 may require parents to file a gift tax return and will also count toward your lifetime gift and estate tax exemption of $13.99 million in 2025. There isn’t a clear line beyond which child support becomes a gifting strategy that would require filing a tax form for something like “implied rent” if your child lives at home. But the large exemption means that only the wealthy will owe gift taxes under current law, says Steve Parrish, professor of practice at the American College of Financial Services.

Communicate Your Expectations

Some 38% of parents whose young adult children have come back home to live say the arrangement has impacted their long-term financial goals like retirement, according to Thrivent’s annual Boomerang Kids Survey, released this spring. Yet 60% of young adults say their parents haven’t discussed the financial impact of supporting them.

If your adult child comes home and runs up your grocery and utility bills, tell them how much more you’re paying. Some parents may require a financial contribution toward these expenses, while others might ask their children to save a certain amount of money a month toward a place of their own.

Communicate the conditions you put on your assistance, Johnson says. If your adult child is living with you, rather than giving them a deadline to move out, it’s often better to schedule regular meetings to set goals and check on the progress being made, she says.

If the money you give now reduces the resources that will be left over after your death, communicate that too. It’s fine to decide that “I’d rather plan to help them launch than leave an inheritance,” Johnson says.