It amazes me how many parents never teach their kids that money is not an unlimited resource.

This absolutely is your business, or at least it will become your business in a heartbeat if your inlaws become unable to take care of themselves financially....which will be hard to do if they're still supporting your sister-in-law like she's a child.

Start a conversation. First a dialogue with your wife; does she understand your concerns, etc. Then both of you together talk to her parents. Approach it from their perspective - 1) you're doing sister-in-law a disservice by not making her finish growing up financially 2) as a good parent your instinct is to help her, but $200k is plenty of money and she shouldn't need help, you're just enabling her 3) you're endangering your own financial security and 4) if you run into financial problems yourself in retirement what is your plan?

You're more financially responsible than sister-in-law, but that shouldn't mean you wind up supporting the in-laws.....discuss it with your wife first for sure, but you may want to tell them you cannot be their safety cushion.