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Don鈥檛 let boomerang kids derail your retirement

You can help your adult children living at home, but don鈥檛 risk your financial future.

Article published: February 12, 2024

Perhaps your job is safe. Or maybe you鈥檙e already retired and feel financially secure. But what happens if you suddenly inherit a boomerang kid?

What is a boomerang kid?

Let鈥檚 say your 45-year-old son loses his job, gets divorced or suffers a financial setback, and if he has little or no savings, he may lose his home and need to move in with you. And he鈥檒l bring his spouse and children with him. Along with their two dogs.

That鈥檚 called a boomerang kid, an adult child who moves back in with their parents, usually due to financial hardship.

And if this happens, you might also become a member of the sandwich generation, a growing segment of the population who had to care for a child and聽an aging parent. And it鈥檚 a huge responsibility that could impact your financial future.

Of course, you love your children and you鈥檒l welcome them home. But get ready for an immediate increase in your household expenses.

What could this mean for you?

Food costs will rise. Electricity and water bills will increase too. You might also be asked to help pay for their student loans, car payments, auto insurance, cell phone and credit card bills, and subscription services.

And even if your kids aren鈥檛 part of the boomerang generation, with millions of Americans still out of work, it might be your parents, siblings or friends who need you. Although they technically aren鈥檛 boomerang kids, the effect is the same 鈥 and while it is wonderful that they all know you鈥檙e there for them, especially in a crisis like this one, it鈥檚 equally important to soberly and objectively evaluate your financial ability to help. (Emotional ability is another topic!)

Communicate expectations

If helping your boomerang kids financially is jeopardizing your retirement security, here鈥檚 what to do: Set the rules at the start. Have a direct, blunt conversation with them, laying out exactly what you will do and how long you will do it, and what you expect from them.

This is an important step. By establishing up front the type of support that will be provided as well as addressing the elephant in the room 鈥 when should a child move out 鈥 you鈥檒l (hopefully) avoid conflicts down the line.

For example, you might say that you鈥檙e willing to have them live with you for six months, or that you鈥檒l pay their phone bill for three months. And while they鈥檙e under your roof, they must agree to pay for groceries and do certain household chores. Putting all this in writing might prove helpful to everyone.

Having this conversation might be uncomfortable, but failing to talk openly could result in resentment 鈥 by everyone.