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Retirement Hacks: Is your adult child moving back home? Make sure you have this conversation

Moving back in with Mom and Dad can help adult children lay down a healthy financial foundation, and even their parents could feel the perks — if the parties talk about it. Avoiding those conversations could otherwise be a money — and relationship — disaster. 

Retirement Tip of the Week: If you’re in a situation where your adult children are moving back in, or you are the adult child moving back in, sit down with your relatives and talk about expectations – financially and around the house. 

“The big challenge for a lot of parents whose kids boomerang back is that it takes money and resources,” said Delvin Joyce, a financial planner at Prudential. Those could be assets that would otherwise go toward their retirements. 

See: I want to buy a ‘forever’ home with my son and his wife. How can I protect myself?

Almost six in 10 adults between 18 and 24 years old lived in their parents’ home in 2021, according to the Census Bureau, up from 55% in 2019. The Census Bureau noted the pandemic may have impacted those figures. 

Parents have to list out their priorities, including building a nest egg for the future and supporting their children. Many older Americans are also part of the “sandwich generation,” which is when they’re caring for their children as well as elderly, sick parents of their own. 

Boundaries must be set, including house rules and financial assistance. Parents may want to engage a financial planner, who could help them write out a plan that includes juggling monetary goals with familial obligations or desires. If they don’t have a financial adviser, families should sit down and pore over their cash flow. Ask questions such as how much can we afford to help? And for how long? What can we do to help both parties get ahead monetarily? 

Talking it out can save both parents and children a lot of stress, especially as they may not communicate their financial needs well. Adult children may think their parents are financially capable to take them back into the home, even if that’s not the case, Joyce said. 

Comparatively, not all parents are comfortable talking about finances with their children, no matter the age. 

Also see: Are you bankrolling your adult kids in a crisis?

Expressing expectations about money is key. If the adult children are employed, they and their parents can work out a budget that partially supports the household as well as builds a nest egg for their own futures. “I don’t think it’s unreasonable to ask to contribute to household bills and expenses,” Joyce said. 

Parents and children may have their own system that contributes to the house chores, too. For example, instead of the parents paying for lawn care or a monthly housecleaning service, they can ask their children to chip in with the work to save some money, Joyce said. 

If it’s possible to help adult children get back on their feet, perhaps through networking or also searching for a job opportunity, think over those possibilities too. Sometimes, the best help isn’t handing over money. 

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