Helping adult children financially should not hinder their path to independence

The traditional advice for parents is to cut off the financial relationship with their young children as soon as possible.

We are being asked to push them out to make ends meet or risk raising irresponsible adults – lazily living in their childhood bedroom or downstairs – unable to manage their money.

But this advice is outdated in reality The economy is still struggling repercussions of the epidemic. Helping adult children doesn’t have to get in the way of independence.

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Our children now face monthly rent payments that can be more than 50 percent of their household wage. inflation It causes food prices to rise. energy costs above. If your offspring need to buy a new or used car, they will face it expensive.

I have long advocated that parents encourage young people to live in the home as long as possible, especially if they need to repay Huge student loan debt. Even if they don’t have debt, a few years of their rent forgiveness can help them tremendously when they finally get fired. So, my three 20-year-olds, after exploring the cost of renting in the metropolitan area, are happily living in the house.

It really is common and acceptable For teens to stay on a family mobile phone plan. over hereAnother way to help your young adult children that can have a lasting impact: keep them in your health insurance plan. If you can continue to hold your child on your policy even after they get their first full-time job, it will give them several years of savings that they can use to pay down debt or increase retirement contributions.

with pass Affordable Care Actalso known as Obama CareYoung adults can stay on the parental plan until they are 26 years old. But you may not realize that they can stay on the plan even if they work for a company that provides health coverage.

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The ACA requires plans that offer dependent child coverage to provide coverage until the child turns 26. Coverage is mandatory even if they are married or have children. In general, they can stay on the plan even if they are not living in the house. It also does not have to be claimed as a dependent tax to maintain coverage.

Sit down with your child and review the cost of getting their coverage through their employer, because the financial case for continuing their pregnancy until the age of 26 is compelling if you can afford it.

Even when employees have coverage, the total cost of premiums, deductibles, and other out-of-pocket expenses can be significant.

Annual premiums for employer-sponsored family health insurance were $22,221 for families and $7,739 for individual insurance last year, according to 2021 Employer Health Benefits Survey by the Kaiser Family Foundation.

Most covered workers contribute to the cost of their coverage. On average, workers contribute 17 percent of premiums for individual coverage and 28 percent for family coverage. The average annual amount contributed by covered workers was $1,299 for individual coverage and $5,969 for family coverage.

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The financial burden of the discount is steadily increasing. Last year, 85 percent of workers covered had a discount in their plan, up from 74 percent a decade ago, according to the King Faisal Foundation report.

The smaller the company, the higher the deductible. Workers at companies with fewer than 200 employees face on average discounts 70 percent more than those at companies with at least 200 employees ($2,379 versus $1,397), according to KFF.

While many employers pay a large portion of health insurance premiums, some workers face relatively High contributions to recording coverageAccording to a separate health system tracker Report By Peterson Health Care Center and KFF. People with employer coverage often face a deduction, which may require the affiliate to spend thousands of dollars Before the plan covered most services.”

The report found that workers in low-income households with employer coverage spend a greater share of their income on health costs than those with higher incomes.

There are many challenges for 26-year-olds who fall off the cliff of parental insurance

The key word in my argument is affordability. It may not be cheaper to stay on a parent’s plan. For us, the cost hasn’t changed since then, as a couple, we still need a family plan.

This may not be possible if you are looking to get rid of dependent care coverage because you need to save money. It may also be that your child has moved to an area where it doesn’t make sense to stay in your plan if he or she has to see medical professionals outside of your coverage network.

If you’re struggling, your child can share expenses, help with deductions or co-pays. It doesn’t have to be an all-or-nothing agreement.

Soon enough, they’ll get old and be on their own. But a gap between you and you paying for all of their healthcare costs can make all the difference in raising a large amount of money in your emergency fund and retirement account.

At the start of a full-time adult child working, letting him stay on your health plan gives him room to catch his financial breath.

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