Gen Z says parents should help pay their bills until they're at least 22. Boomers are against it, but giving in.

Parents are sacrificing their savings on their adult kids, study finds.

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• Baby boomers and Gen Z kids are divided on what age adults should start paying their own bills.
• 68% of US parents are sacrificing savings to financially support their adult kids, Bankrate found.
• Financial support can delay parents from retiring, repaying their debts, and reaching their goals

Baby boomers and Gen Z are at odds when it comes to the age of financial independence, a recent study found.

Personal finance site Bankrate commissioned YouGov to survey 2,346 US adults — including 773 parents with kids older than 18 — to discuss financial independence and how children impact their parents' finances.

While baby boomers between the ages of 59 and 77 think people should start paying their own bills for things like cell phones, credit cards, and car insurance at 19 years old, Gen Z thinks they shouldn't shell out on until they turn 21 or 22, per the study.

Part of the reason could be that parents are sick of sacrificing their hard-earned cash to financially support their adult kids.

The study found that 68% of parents have made a "financial sacrifice" to help their adult kids with their finances. 31% of parents said they have made a "significant financial sacrifice." 

In turn, parents have taken hits to their retirement and emergency savings, making it harder to reach their personal financial goals and pay off their own debt. 

The results vary by income bracket. 58% of households making an annual income below $50,000 have made financial sacrifices for their adult children, compared to 46% of households making more than $100,000 a year, according to the study. 

Location may also play a role. Parents living in Midwest states like Illinois and Michigan feel like they sacrifice less of their retirement savings for their kids than those living in other parts of the US, per the study.

Parents may be spending more on their adult kids in part because Gen Z — aged 18 to 26 years — are entering an uncertain job market, and because inflation, interest rates, and rent prices are on the rise, per the study. As a result, adult children may find it harder to achieve financial independence. 

Since the beginning of the COVID-19 pandemic, 18% of men and 12% of women ages 25 to 34 say they live with their parents — rates haven't been this high since 1972, according to 2022 US Census Bureau data. 

While parents may want their kids to feel financially secure, Ted Rossman, a senior industry analyst at Bankrate, said their financial assistance can sometimes go "too far."

"Paying for your child's bills can enable bad behavior or stunt an adult child's development," Rossman told Bankrate. "It can also put your own retirement and other financial goals at risk. You can get loans for a lot of things, but retirement isn't one of them."

In fact, a 2022 NerdWallet survey found that 26% of parents who took out students loans for their kids "won't retire as expected," with some even postponing retirement for years to account for rising inflation. 

To encourage financial independence, Rossman said parents can help their adult children achieve financial independence by creating an agreed-upon budget and setting clear expectations with their kids on how much — and for how long — they can offer their support. He also suggested that parents discuss their finances with their kids as soon as possible, so they can prepare to cover their own expenses. 

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