More than one-third of Multi-Generational (Multi-Gen) and Boomerang families say they often feel financially-burdened by the number of family members living in their household, while 22% of other modern families, including those that have same-sex couples, are blended, have single parents, and have older parents with younger children, say the same.
In a study commissioned by financial service provider Allianz, many Multi-Gen and Boomerang families say having an extra adult family member at home is a positive aspect of their living situation. More than a quarter (27%) of Multi-Gen families, defined as three or more generations living in the same household, reveal that living with extended family is beneficial for help with children and/or household responsibilities. More than half (54%) of Boomerang families, defined as parents with an adult child between the ages of 21 and 35 who left and later returned to the family household, report they would prefer to have their adult child living at home with them as long as he/she wants to.
Allianz Life vice president of consumer insights, Katie Libbe, cautions that these families shouldn’t ignore the effect this could have on limiting their ability to save for retirement. While reporting happiness associated with closer family ties, families also acknowledge the potential risk to retirement savings. The families note their living arrangements create a risk for retirement readiness. Having extra family members, sometimes unplanned, can result in more money spent on current expenses, leaving less available for retirement savings.
Multi-Gen families were more likely to feel a great deal or some stress about the following topics, compared to other modern families:
- Covering financial expenses – 72% vs. 63%
- Getting out of debt – 67% vs. 57%
- Caring for a parent or relative financially – 60% vs. 31%
Additionally, nearly six in 10 (59%) Multi-Gen families say they currently live paycheck-to-paycheck, compared to less than half (47%) of other modern families.
Boomerang families report being more open about discussing family finances, as 80% say they are completely or somewhat open with their children on the topic, compared to 71% of other modern families. Boomerang parents have also done more to teach their children about money, having taken the following initiatives, compared to other modern families:
- Have helped their children to open a savings account or develop a savings plan – 71% vs. 59%
- Have talked about their personal financial situation with their children – 62% vs. 49%
- Have encouraged their children to invest and save for their own long-term financial goals, including retirement – 60% vs. 40%
Despite their openness when discussing finances, welcoming an adult child back home is not without negative consequences. Less than half (48%) of Boomerang parents say they are on track to achieve their financial goals. Another 17% have had to go back to work to make ends meet (17%), and a similar number (16%) have delayed or considered delaying retirement.
Advisers can help modern families address the financial challenges associated with their living situations. Libbe says it’s wise for both Multi-Gen and Boomerang family types to seek out financial professionals that have experience dealing with unique family structures and who can provide guidance on how they can balance supporting their family while still planning for tomorrow.
The Allianz “LoveFamilyMoney” study was conducted with more than 4,500 respondents, ages 35 to 65 with a household income greater than $50,000.