Rising costs for childcare and housing are pushing a growing share of American parents to lean on their own parents and grandparents for financial support right now, rather than waiting years or decades for an eventual inheritance.
According to the BMO Real Financial Progress Index, 37 percent of parents with young children expect to receive some form of financial help from their own parents or grandparents over the coming year. Among those anticipating support, 43 percent said they are counting on grandparents to help with childcare directly, while 26 percent said family members would contribute toward their children's future through a 529 plan or another dedicated savings account.
Childcare Costs Are Outpacing What Families Can Absorb Alone
The reliance on family support reflects just how far childcare costs have climbed relative to household budgets. Parents now spend roughly 20 percent of their annual income on childcare on average, and about one in five parents spend more than 30,000 dollars a year on it. That is well above the benchmark set by the US Department of Health and Human Services, which considers childcare affordable only when it consumes 7 percent or less of family income.
Housing tells a similar story. Roughly 60 percent of Gen Z homeowners and 57 percent of millennial homeowners say they could not have purchased their homes without financial help from family, underscoring how central intergenerational support has become to reaching basic financial milestones that previous generations often managed largely on their own.
Younger Families Cannot Wait for the Great Wealth Transfer
The trend also reflects a shift in how families think about the enormous transfer of wealth expected from baby boomers to younger generations in the coming decades. Cerulli Associates estimates that roughly 124 trillion dollars will change hands through 2048, with nearly 100 trillion of that coming from baby boomers and older generations. But rather than waiting for that wealth to arrive through inheritance, many younger parents are asking for help now, while they are in the thick of raising children and building careers.
That shift places new financial pressure on older generations as well, many of whom are simultaneously trying to fund their own retirements while helping their children and grandchildren manage costs that have outpaced wage growth. The result is a form of wealth transfer happening well before anyone dies, driven less by estate planning than by the day to day math of raising a family in an increasingly expensive economy.
