Back-to-school season used to mean backpacks and school supply lists. For many families, it now means a very different kind of preparation: tuition payments, rent for an apartment near campus, or a monthly transfer to a 24-year-old who's still finding their footing. The kids got older. The financial responsibility didn't necessarily go with them.
This isn't a fringe situation. Roughly half of parents provide regular financial assistance to their adult children, averaging nearly $1,500 per month. That support is starting later in life and lasting longer than it used to. If you're one of them, the back-to-school season is a good moment to look at that support with the same intentionality you'd apply to any other line item in your financial plan.
Ongoing Support Is More Common Than It Used to Be
The cost side of this hasn't gotten any easier. A public four-year university now runs roughly $27,000 a year in-state and closer to $46,000 out-of-state, and private nonprofit schools average closer to $57,000 annually. For families who've been absorbing some or all of that, the number doesn't disappear when a diploma gets handed out. It often just changes shape: rent, a car payment, health insurance, help furnishing a first apartment, or general cash-flow support while a young adult finds stable work.
None of that is inherently a problem. Helping adult children get established is a completely reasonable use of family resources. The issue isn't the support itself. It's when that support continues by default rather than by plan, with no endpoint and no clear sense of how it fits into everything else you're funding, including your own retirement.
Where This Shows Up: Your Own Financial Plan
Ongoing support for adult children rarely stays contained to its own line item. It affects retirement contributions, since money going out the door each month isn't going into an IRA or workplace plan. For 2026, the contribution limit for workplace retirement plans is $24,500, and it's worth asking whether ongoing family support is quietly capping how much of that limit you're able to use.
It also touches your timeline. A support arrangement that made sense for a year while a young adult transitioned out of school can become a much longer commitment if there's never been a conversation about what happens next.
And it touches leftover education savings. If a 529 plan has money left in it after tuition and expenses are covered, that balance doesn't have to sit idle or trigger a penalty. Section 126 of the SECURE 2.0 Act created a path to roll unused 529 funds into a Roth IRA for the same beneficiary, tax-free and penalty-free, up to a $35,000 lifetime cap. The rules are specific. The 529 account needs to have been open for at least 15 years, the funds being moved need to have been in the account for at least 5 years, and the beneficiary needs earned income for the year to receive the rollover. The annual amount moved is also capped at the regular Roth IRA contribution limit of $7,500 for 2026. It's a narrow provision, not a blanket solution for large leftover balances. Still, for families who overfunded a 529 and are now watching a young adult finish school, it's a legitimate way to redirect that money toward a head start on retirement savings instead of letting it sit idle.
Building a Plan Instead of an Open-Ended Arrangement
None of this means support for adult children needs to stop. It means it benefits from the same structure you'd apply to anything else in your financial life: a purpose, a timeline, and a clear sense of how it interacts with your other goals.
A few things worth thinking through:
- What is this support actually for? A bridge while a young adult finds their first job looks different, financially and emotionally, than ongoing help with everyday living expenses years into a career.
- Does it have a natural endpoint? Even an informal one, tied to a milestone like finishing a degree, landing a first full-time role, or reaching a certain income level, gives both sides something to plan around.
- What is it costing your own plan? It's worth knowing, in real terms, what a few years of consistent support means for your own retirement contributions and timeline, rather than treating it as background noise in the budget.
- Is there a smarter way to structure it? Direct payments to a school or medical provider, contributions to an account with a specific purpose, or a 529 rollover into a Roth IRA can sometimes accomplish more than an unstructured monthly transfer.
Back to School Is a Reasonable Time to Revisit This
Late summer already puts financial decisions on your radar: tuition bills, housing deposits, insurance changes. That makes it a natural time to also ask the bigger question, not just what you're paying this semester, but what your overall approach to supporting adult children looks like, and whether it's still serving both them and your own long-term plan.
This is exactly the kind of decision that benefits from being looked at alongside your full financial picture rather than on its own. Supporting the next generation and staying on track for your own retirement aren't competing goals when they're planned for together. They only start to compete when one of them is left unexamined.
Reach out to IM Wealth Partners to think through how ongoing family support fits into your broader financial plan.