Introduction & Hosts

Madison: Hello everyone, and welcome to Not Just Numbers, Honest Conversations with a Financial Advisor and Lawyer. I am Madison Demora and I’m here with Mike Garry. Mike is a financial advisor and a CFP practitioner and the founder and the CEO of Yardley Wealth Management. He is also an estate planning lawyer and his law firm is Yardley Estate Planning. Hey, Mike.

Mike: Hey, Maddie. How are you today?

Madison: I’m good. How are you?

Mike: Good.

When Tuition Disappears: A Major Expense Is About to End

Madison: All righty. So graduation season gets a lot of attention for the obvious reasons, caps, gowns and celebrations. But there’s something happening financially underneath all of that which almost never gets talked about.

Mike: Yeah. For families who’ve been paying college tuition, a major recurring expense is about to disappear. And let me tell you, it’s fantastic when that happens. You know, but anywhere from 27 to 57, maybe $87,000 a year, depending on the school, it’s gone.

Where Does That Money Go Next?

Madison: And the question is where that money goes next. Because if there’s no plan for it, it doesn’t sit there waiting. It gets absorbed into lifestyle or quietly redirects towards continued for the same kid who just graduated.

Mike: And that’s really what we’re talking about today. Right? Like from our perspective, the families who are intentional about this moment come out ahead. The ones who aren’t tend to look up a year later and wonder where the money went.

Graduation Is a Starting Line, Not a Finish Line

Madison: Graduation is one of the biggest financial inflection points a family can go through. Most families treat it like a finish line. It’s actually a starting line for the parents especially. So most people assume financial support for adult children is a short-term bridge. A few months while the kid finds their footing.

The Data on Parents Supporting Adult Children

Mike: And the data says otherwise. Right. Half of all parents with adult children are now providing regular financial support. And average monthly contributions are almost $1,500. That’s a three year high, up from 45% just two years ago.

Madison: So it’s accelerating.

What Parents Are Actually Paying For

Mike: Yes. Groceries, 83% of supporting parents. Cell phone bills, 65%. Vacations, 46%. You know, one of the things that’s funny, you know, we’ve talked about cell phone bills with clients for 20 years just because clients are always like, well, it’s only a little bit to keep them on, if they need their own plan, it’s going to be like more than a hundred dollars a month, so they do. Well, that never goes away. For parents of Gen Z adults, those like 18 to 28, average monthly support climbs to $1,813. And AARP data is worth paying attention to. 75% of adults 45 and older are financially supporting at least one adult child. An average annual contribution around $7,000. And 53% of those adult children can reportedly meet their own basic needs with money left over.

Madison: So it’s not purely a need situation?

The Real Cost to Parents

Mike: No, it’s not. A lot of it’s just habit. Or nobody wants to have the conversation. And the cost of the parents is real. You know, 42% report financial stress. 9% have already adjusted their retirement plans. That’s crazy adjusting your retirement plan for your adult child who can actually take care of themselves. Working parents are contributing more than twice as much to their grown kids each month as they are to their own retirement accounts. $1,589 to their children. And only 673 to their retirement.

Madison: That gap is what graduation gives you a real chance to address. So what do you actually say? Because a lot of parents know they should have this conversation and just don’t know how to start it.

How to Start the Conversation

Mike: Right. It’s real. It is. But graduation makes it natural, right? Both generations expect things to change. You’re not blindsiding anyone, you’re just naming what was already going to happen.

What to Put on the Table

Madison: So what’s worth putting on the table?

Mike: So when does regular support shift from expected to optional? Which expenses move to the graduate’s responsibility and on what timeline? What does the graduate need to understand about employer benefits, health insurance, retirement plan enrollment, and what can the parents realistically continue to provide without putting their own retirement at risk? It’s the one most families never actually answer out loud.

Madison: Because it’s uncomfortable. But not answering it is its own answer.

Mike: Yep. If you don’t answer, it’s an answer.

How a Financial Professional Can Help

Mike: And honestly, having a financial professional in that conversation changes things. You know, Ameriprise Financial’s 2025 research found that 78% of parents said their financial professional help guide decisions related to their adult children. It takes the personal charge out of it. The conversation becomes about the plan, not about the relationship. And look, I will tell you, I have no problem being the bad guy. Like if a client and their child come in and you know, there’s this sticky situation because the client is providing hundreds or thousands of dollars a month in support and it’s not something that the parent can afford to do. You know, if the parent gives us permission to like share details, we would tell them straight out, like why it’s a problem for the client and also like why it is something that the child needs to start to take control of. They need to take control of their own life. You know, you need to have some skin in the game and you need to start making those decisions. And some of it stinks. You know, I remember the first time I had to pay rent. It stunk. Or go out and pay for like a couple bags of groceries. It is not fun. But then, you know, you get used to it pretty fast. And it’s really just part of growing up. And so we could have that conversation, with the clients. It becomes about the plan, not about the relationship.

Retirement Contributions: The First Place That Cash Flow Should Go

Madison: Okay. Tuition payments end. What should parents actually do with that cash flow?

Mike: Well, retirement contributions first. The 2026 limit is $24,500. If you’re 50 or older, you have $8,000 catch-up that brings it to $32,500. And SECURE 2.0 provision for a super catch-up for those 60 to 63 brings a total of $35,750. Both spouses are working, contributing, you’re looking at a combined opportunity that for a lot of families is only now realistic. The tuition was just eating it before. But you know, if you could do that and both of you could do that, that could be a huge jump into your retirement planning.

Madison: Yeah. This might be the first time those limits have actually felt achievable.

The Roth Conversion Window

Mike: Exactly. And there’s another window we’re thinking about. The years between the end of college payments and the start of Social Security and required minimum distributions can create a real opportunity for Roth conversions.

Madison: Can you walk me through that?

Mike: Sure. Once you reach age 73, if you’re born in the 50s or 75 if you’re born in the 60s or younger, you’re generally required to begin taking distributions from traditional IRAs and 401(k)s, and those are taxed as ordinary income. So converting to Roth before that can help with tax management and estate planning.

Roth Qualification Requirements

Madison: And there are qualification requirements on the Roth side of it too, right?

Mike: Right, right. Roth earnings need to meet a five-year holding requirement and occur after age 59 and a half to qualify for tax-free treatment. So the window between tuition ending and those requirements matters. And it doesn’t last forever.

Other Financial Priorities: Emergency Reserves, Insurance & Estate Documents

Madison: So retirement contributions and Roth conversions are the obvious places to start. But there are a few other things worth looking at while you have the opportunity.

Mike: Emergency reserves. A lot of families draw that cushion down during the college years and never rebuild it. You know, three to six months of essential expenses in accessible savings. Once tuition ends, that’s worth addressing before anything else gets allocated. Insurance is another one. If a graduate is still on a parent’s health plan, they can remain on it until they’re 26. But this is also a good time for parents to look at their own coverage. Long-term care specifically. Parents in their 50s and early 60s are still in a good position to explore those options. But the window narrows each year. Graduation is a natural trigger. And estate documents. Wills, powers of attorney, beneficiary designations, healthcare directives. If the last child graduating means an empty nest, a lot can change in four years. Worth of review. I also threw that in there because people don’t review them enough. Right. Like that always needs to be reviewed. Check all those beneficiaries, check those documents, make sure they’re still what you want them to be.

Setting the Next Generation Up Well

Madison: That’s right. And while we’re at it, graduation is also a real opportunity to set the next generation up well.

Mike: Yep. Benefits enrollment is the one worth flagging first. Health insurance, retirement plans, employer matching. Graduates are making these choices fast, often without really understanding what they’re signing up for. You remember doing that, right? Signing up for your benefits? Like, what is all this crap?

Benefits Enrollment: What New Graduates Need to Know

Mike: If they contribute nothing from the start, they may have to wait until open enrollment the following year to get into retirement plan at all. Even small initial contributions keep that option open.

Health Insurance Options for Graduates

Mike: Health insurance is worth a specific conversation, too. They can stay on a parent’s plan until 26 regardless of marital status, employment or living situation. But if their employer offers coverage, you know, it’s actually worth exploring the options.

The Basics: Credit and Emergency Funds

Mike: And then the basics. You know, building credit. Starting emergency fund. Nothing complicated. Just easy to skip when everything else feels more urgent. So if you’re listening to this and a graduation is coming up in your family, this is the moment. Have that conversation about support. Look hard at the retirement contribution limits. Don’t let the estate documents slide another year.

Madison: And you don’t have to solve everything at once. But starting before that last tuition check clears makes all the difference.

Final Thoughts

Mike: And if you want help thinking through what this transition looks like for your family, that’s exactly what we’re here for.

Madison: Thanks so much, Mike.

Mike: Thank you, Maddie. This was great.

Closing & Contact Information

Madison: For more information on Yardley Wealth Management or Yardley Estate Planning, you can visit our websites, at yardleywealth.net and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management. Don’t forget to subscribe to our YouTube channel. This podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.