Would you delay retirement so your kids can have health insurance until they're 26?

By Beth Pinsker

A surprising number of parents are answering yes to that question

Planning your own retirement date can involve a lot of other people.

This sort of question never came up in retirement planning in years past: Should you consider your children's healthcare-coverage needs in your retirement plan?

Many people would say a knee-jerk "hell no" to that question, even though the law now allows your children to stay on your health plan until they are 26. Of course, you should be able to expect a young adult to be launched enough in their early 20s to have their own health insurance. You've got to cut the cord at some point; you're just coddling them otherwise, creating entitled monsters who won't ever be able to survive on their own.

But then, I do the math on my own situation. My kids will still be in their early 20s when I hit 60. For many parents of my generation, who had kids in their 40s, their kids will turn 26 after they turn 65 and start on Medicare. When I think about the timing of any decision to leave full-time work, it's somewhere in that window.

It might sound crazy to some, but my kids and their medical needs definitely figure into my thinking. Asthma inhalers are not lattes or avocado toast. Insurance on the open market is often more expensive and less comprehensive than a family plan provided by a big corporation. What I do and where I live impacts the whole family, and working a year or two beyond what I might want if I just considered myself is one option on the table.

It turns out, I'm not crazy - I'm actually exactly where half of my fellow parents are right now. A new "Parents & Finances" survey from Ameriprise Financial found that 45% are paying for the health insurance of their children over the age of 21. And it's not just that: 84% are contributing to the purchase of a car, 73% are helping to pay for weddings, and 63% are helping with ongoing expenses like cellphones.

"I think you should factor it in. We have to live in reality," said Bobbi Rebell, author of "Launching Financial Grownups" and "How to be a Financial Grownup" - and parent to several newly launched grown-ups. "Because of the way our employment situation has evolved into more of a gig economy, we have to assume they will not have health insurance."

Rebell, who is also a consumer-finance expert at Cardrates.com, said she looks at the family as an ecosystem, and that there are some expenses worth covering because they turn out cheaper that way. Keeping a young adult on the family cellphone plan, for instance, is probably cheaper than them having their own plan, so you'd only be kicking them off to make a point.

If you're still working anyway, having an adult child on your plan might not cost you extra. That goes especially if you're covering younger children and are on a family plan that charges a flat rate no matter how many dependents you have. Another thing to consider is that you might be able to extend your kids' time on your insurance past age 26 in certain states, noted financial planner Jorie Johnson, who is based in New Jersey. Some of Johnson's clients are able to keep their kids on their plans until age 31. In New York, coverage can extend through age 29.

In the end, adding a kid on your plan may be cheaper than a plan your young adult can get on their own in the insurance marketplace, or might be less than their employer charges as a premium if they are offered insurance at work.

"You don't have to assume that putting them on the health insurance will be a burden," Rebell added.

That said, if you're only working to provide health insurance, then it might be time to rethink your plans. Your need to retire when it's good for you - and you may end up with no choice in that matter anyway, either due to layoffs or your own health issues.

"Then it's time for tough love," Rebell said.

Compromise options

There are also a few solutions other than postponing your own retirement just to work for your kid's health insurance. The provenance of the insurance is often less important than where the money for the coverage comes from. So changing your retirement date doesn't necessarily have to be on the table, but you may want to think ahead about your savings.

"You have to plan intentionally," said Deana Healy, vice president of financial planning and advice at Ameriprise Financial.

Financial adviser Elizabeth Scheiderer, who is based in Ohio, told me about one of her clients, a mother with four children, who faced this dilemma recently. She covered the older three on her insurance until they turned 26, but wanted to retire before her youngest hit that age. She researched if any postretirement benefits were available through work, but there were none. "She decided to 'treat her children equally' by giving her youngest child the premium she incurs at her employer each month now that she is no longer on her mother's plan," Scheiderer said.

You also might want to think ahead to possible other changes that might be coming, especially if you're not thinking about retirement right now. The younger you are now, the more things could change. Twenty years ago, family cellphone plans weren't a consideration. My parents certainly never encountered the choice about healthcare coverage for their kids, because I was 26 long before 2010, when the mandate in the Affordable Care Act to keep children on a parent's health plan went into effect. Also, they were young when they had me; when I was 26, my mom was barely 50. I was never on their cellphone plan either, because I got a cellphone before they did.

"So 20 years from now, there will be some other mammoth change we haven't considered," said Ameriprise's Healy. "You need to build in enough flexibility to adjust over time."

Got a question about investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write to me at beth.pinsker@marketwatch.com. Please put "Fix My Portfolio" in the subject line.

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-Beth Pinsker

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09-26-25 1045ET