You’ve heard it over and over: the Holy Grail of retirement security is working longer. By sticking around for a few extra years or phasing into retirement with a part-time job, you can defer Social Security benefits and avoid tapping your nest egg right away—and boost your retirement income by 30% or so.
But what if you can’t work longer? What if you are physically unable or, as many have found since the financial crisis, no one will hire you? The next best thing to the Holy Grail seems to be moving in with the kids, if your resources are lacking and they’ll have you.
More than 51 million Americans—about one in six encompassing 12 million homes—live in a multigenerational household. That is a 10% increase since 2007 and while it includes struggling young adults who have moved in with Mom and Dad, struggling parents moving in with the kids are a big part of the mix, according to a report from Generations United.
In the survey, 66% of those who live in a multigenerational household said economic considerations were part of the reason and 21% said economic considerations were the only reason they live that way. Other findings:
- 40% reported that job loss, change in job status, or underemployment was a reason their family became a multigenerational household.
- 20% reported that health care costs prompted them to form a multigenerational household.
- 14% reported that foreclosure or other housing loss prompted them to form a multigenerational household.
Evidently Robert Frost was correct when he wrote that “home is the place where, when you have to go there, they have to take you in.” Yet the living arrangement may not be as awful as you imagine. Some 72% report that living with multiple generations has improved their finances; 82% say it has forged closer bonds with family; and 75% say it has relieved the hardship of finding elder care or childcare.
Multigenerational living brings occasional stress, 78% in the survey report. But in general they agree that the benefits are significant and make it financially possible, for example, to go back to school or get additional job training.
This is a back to the future trend. When America was primarily an agricultural country, multiple generations routinely lived together on the farm. We may have been headed back this direction even without economic problems. Immigrant populations are growing and, as a matter of culture, often house multiple generations under one roof. Aging and suddenly single boomers, meanwhile, are choosing to take in family or roommates for companionship.
But the biggest driver going forward would seem to be the giant boomer generation now hitting age 66 at a clip of 10,000 a day and, after a lost decade for stocks, looking at retiring with fewer resources than they had planned. According to the report:
“Many boomers may end up turning to their adult children for help—and a place to live in the near future. Even if relatively few baby boomers follow this course, the sheer size of the baby boom population guarantees that their economic struggles will have a significant impact.”
Bunching family under one roof isn’t the Holy Grail of retirement. But for those with few choices, at least it’s an answer with some unexpected benefits.