26-05-2025
How Boomerang Kids Are Becoming the New Roadblock to Retirement
There's something to be said for moving back home to support your parents financially in their later years. Between the high cost of housing and inflation, returning home can be economical for the adult children, as well.
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But many adult children seek financial support from their parents rather than provide it. According to a Thrivent study, 46% of adult children ages 18 to 35 move back home. In 38% of cases, older parents report having their retirement plans and other long-term financial goals impacted by their children living with them.
Boomerang children are those who return home after a period of time living on their own. The biggest reasons this happens are housing affordability (32%), inflation (30%) and major life events, like divorce (20%).
According to the Thrivent survey, parents who've had their adult children move back home with them cite the following areas of their finances as having been most impacted by the change:
Saving for short-term goals: 39%
Saving for long-term goals, including retirement: 38%
Debt payoff: 34%
Savings for future health-related needs: 21%
Ability to support their own aging parents: 8%
While supporting your adult children isn't necessarily a problem, it certainly can be a roadblock to your other financial goals or needs.
'If your adult child is living with you temporarily, then all is well. If they are living with you on a longer or permanent basis and are helping with bills, that actually could be a financial benefit to all parties,' said Cynthia Campos Delgado, founder and financial advisor at Campos Wealth Management in McAllen, Texas.
'However, when it's a no-end-in-sight scenario and they are not helping by contributing financially, then that becomes unbalanced and unhealthy emotionally, as well as financially,' she added.
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The cost of living is high. According to the latest data from the U.S. Bureau of Labor Statistics, the average person spent about $77,280 in 2023, the most recent available data. When adult children move back home, certain costs — like housing — may decline.
But sometimes their parents have to foot the bill for everything else, like increased utility bills or groceries.
'These added costs can directly reduce parents' ability to contribute to their retirement accounts, or even force them to dip into savings prematurely,' said Mindy Yu, a certified investment management analyst (CIMA) and senior director of investing at Betterment at Work.
Yu added that the 'financial strain could cause future retirees to delay their retirement date, and for those already retired, it might mean adjusting their lifestyle, cutting back on travel, hobbies or other desired retirement activities.'
Fortunately, there are ways to make the situation work. Alex Gonzalez, a financial advisor at Thrivent, had the following tips for those with adult children living at home:
Keep the lines of communication open. Approximately 60% of parents don't discuss the financial impacts of having their adult children living with them.
Help the adult children make a savings goal and a plan, so they can strike out on their own again.
Evaluate your own long-term financial goals and make sure providing financial support to your adult kids isn't getting in the way of that.
Check in with your adult children even after they've moved out on their own to make sure they're on track financially.
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This article originally appeared on How Boomerang Kids Are Becoming the New Roadblock to Retirement
