This might surprise you: according to Pew Research, statistics indicate that almost one in five individuals live in multigenerational housing – where adults from at least two generations share the same home. What’s behind this trend? What are some of the positives that families experience? What are some of the challenges?
Reasons for the resurgence in multigenerational households
Financial need is the common reason adult children move in with their parents – or visa versa. In this economic environment impacted so severely by government actions related to COVID-19, some families are coming together, if only temporarily, until the unemployed family members get back to working full time. This is happening in both directions – it’s not just adult children moving in with their parents. There are older parents that were still working – out of necessity – and job losses have brought some of those parents to their children’s homes.
For some other retirees, often several years into their retirement, it’s the reality that their retirement savings are inadequate that leads to them moving in with their children.
Of course, health – or concerns about health, have long been the reason aging parents move in with their adult children. The financial aspect often comes in to play in these situations – not everyone can afford to move into an assisted living facility, but it’s also true that some families do this only for personal reasons.
What are the positives?
The millennial might think of it as a giant leap backward while for many, it’s a great way to see things from a new perspective. Multigenerational households can provide several solutions and advantages for both parties involved. Be it financial or social, the more the people in the house, the greater the prevailing helping hands available.
Privacy is quintessential for a healthy living household. Privacy ensures that every member of the household gets their own space, but that is not always feasible. Living in a joint family setup with people from different age groups and generations can be difficult. If caregiving is needed for an older family member, other challenges can come up, including scheduling and physical demands.
If you are considering taking the big step to a multigenerational house
To avoid unnecessary conflict, it’s best to have an open conversation. If necessary, set boundaries from the start. This makes life so much easier as both parties refrain from stepping into another’s territorial space. This doesn’t necessarily just mean physical boundaries but includes emotional and social boundaries too. Understanding that you are one unit that functions as a household is pivotal for living success. Communication plays a big role in this component. Voice your opinion over matters you agree or disagree on – and try your best to remember that compromise is sometimes necessary.
Financial hardship is often the reason multigenerational households happen, and even though the family members know that going in, conversations about the expectations and details of shared household budgets can be incredibly difficult. Having said that – those conversations are especially important.
Does your financial plan factor in the possibility of needing to join households?
A comprehensive financial plan touches on a lot of possibilities and maintaining a desired lifestyle in retirement is often the primary concern. Having a conversation with your family about this “what if” might be difficult. Discussing the money aspects of this topic with a financial planner first is likely a good idea. Over the years, several of our clients have joined households for all the reasons we’ve mentioned. Invariably, this has led to financial planning questions involving other family members.
Perhaps it’s time for you to revisit this topic – or to give it serious attention for the first time. In either instance, feel free to give us a call.
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Presented by Clear View Financial Services, LLC. Opinions expressed are that of the author and are not endorsed by the named broker-dealer or its affiliates. All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. The information in this article is not intended as tax or legal advice. You are encouraged to seek tax or legal advice from an independent professional advisor.