Intergenerational financial support doesn’t flow only from parent to child. According to a new Urban Institute brief, more adult children are providing financial assistance and elder care to aging parents—a phenomenon known as “reverse transfers.”
In an analysis of the Health and Retirement Study (HRS) supported by AARP, we find that about 13 percent of adult children provided financial support to aging parents between 2010 and 2022. That’s more than double the share that provided support before 2010 (5 percent).
These transfers can help older adults meet their basic needs as public safety nets and retirement savings fall short in a time of heightened affordability pressures. But they may simultaneously limit younger adults’ ability to save, invest, or support their own children, potentially hindering upward mobility and wealth building across generations.
Older adults of color are more likely to receive assistance from a child, reflecting systemic barriers to wealth building
Our analysis of HRS data reveals that older adults of color were more likely to receive financial assistance from a child than white older adults.
Across the US, an average of 13 percent of older adults—and 12 percent of white older adults—received more than $500 from a child in the two years before death. By comparison, 18 percent of Black older adults, 16 percent of Hispanic older adults, and 21 percent of older adults who are American Indian and Alaska Native, Asian American and Pacific Islander, or multiracial received this assistance from a child.
This support was primarily used to cover essential expenses, such as bills, rent, and medical costs and insurance.
The higher share of older adults of color receiving financial support from a child reflects several systemic challenges facing families of color, including barriers to wealth building, higher debt in retirement, smaller inheritances, and greater vulnerability to economic volatility. These factors, combined with inadequate safety net supports, often lead older adults to rely on family for support.
How federal policymakers can better support the financial stability of older adults and their adult children
Ensuring older adults with low incomes have the resources they need to thrive doesn’t just help them age with dignity; it also supports the financial resilience and upward mobility of their children and community.
To ease the challenges facing both generations, federal policymakers can strengthen retirement income supports by:
- Ensuring Social Security is solvent while protecting older adults with low and moderate incomes. Based on the Social Security Administration's June report, Social Security trust funds are projected to reach exhaustion within the next 10 years, which would trigger a 22 percent Social Security benefit cut. Previous Urban research has identified a blueprint for bipartisan solutions that could achieve 75-year solvency and make the system more progressive without cutting benefits for current beneficiaries. Key improvements for older adults with low incomes include stronger child, disability, and survivor benefits. Helping Social Security remain solvent could reduce the need for adult children to subsidize their parents’ basic needs.
- Modernizing Social Security Disability Insurance and Supplemental Security Income. Many older adults and older adults with disabilities rely on these programs to pay their bills and buy groceries. But outdated occupational data, chronic understaffing, and asset limits that haven't been changed in decades leave vulnerable adults without support.
To prevent hundreds of thousands of older adults from losing benefits and reduce adult children’s need to subsidize their aging parents’ expenses, policymakers could avoid reducing eligibility and instead update disability rules using modern data. They could also increase Social Security Administration staffing levels to reduce processing delays and raise Supplemental Security Income’s asset caps above $2,000. - Creating more opportunities for early wealth building through programs like baby bonds or 530As (Trump accounts). When adult children support their aging parents financially, it can constrain their ability to save for or support their own children, hindering mobility across generations. Early wealth building programs like Trump accounts and baby bonds can help break this cycle by ensuring every child has access to a modest nest egg, regardless of family wealth. They could also help narrow the racial wealth gap.
- Enhancing tax credits for caregivers who support older relatives. Millions of adult children currently provide unpaid care to aging parents, often at significant cost to their own careers, savings, and retirement contributions. A more robust caregiver tax credit could help defray out-of-pocket costs for care-related expenses, such as home modifications, medical supplies, and transportation. This would not only ease the immediate financial strain on caregivers but also support their long-term financial futures, reducing the cascading wealth effects of reverse transfers across generations.
In addition to these supports, federal policymakers and regulators could explore how the current fraud crisis has led seniors to lose billions in retirement savings and personal assets. According to the Federal Trade Commission, as much as $81.5 billion was stolen (PDF) from adults ages 60 and over in 2024 alone. When seniors lose money to fraud, they may turn to adult children for help with basic expenses, increasing the reverse transfer burden. Preventing elder fraud could help protect both generations.
By updating and reinforcing retirement income supports, policymakers can help ensure America’s older adults, and their children and communities, can thrive.
Let’s help communities build more secure, hopeful futures.
Today’s complex challenges demand smarter solutions. Urban brings decades of expertise to understanding the forces shaping people’s lives and the systems that support them. With rigorous analysis and hands-on guidance, we help leaders across the country design, test, and scale solutions that build pathways for greater opportunity.
Your support makes this possible.
