The bank surveyed more than 2,500 American parents and found that 79% of parents continue to provide financial support to their adult children — contributing to an estimated $500 billion annually. That’s twice the amount they save for retirement — $250 billion annually — according to the report. There are 173 million parents in the US, according to Merrill Lynch.
Of the $500 billion total amount parents are spending on adult children, college education comprises about one-fourth, according to the report; groceries and food cost $54 billion annually and cell phone service costs $18 billion, with many parents covering the full cost, not just handing over a few dollars.
But that total doesn’t count big-ticket items — about 60% of parents help pay for their adult child’s wedding and 25% help pay for their child’s first home. Asian parents are most likely to provide financial support for their adult children, especially when it comes to education expenses, according to the report.