Boomerang children—twenty-and thirtysomethings who move back in with their parents--is a phenomenon born of the 2008 economic collapse. The still-challenging job market and deliberately-paced recovery have forced many to return home or, in the case of those who never left, to delay their departure. Census date show that between 2007-2009, the share of Americans living in multi-generational households increased more among adults ages 25-34 than among any other age group.
And that’s cool with them, according to a new Pew Research Center study that found that among the 29 percent of these young adults, 78 percent are satisfied with their living arrangements and 77 percent are upbeat about their future finances. On the plus side, nearly half (48 percent) of boomerang children report contributing rent payments and 89 percent say they are helping with their household expenses.
They believe there is not as much of a stigma attached to moving back home as there once was. Among this age group, 61 percent said they have friends or family members in a similar situation due to economic conditions, while 29 percent of parents of adult children report that a child of theirs has moved back in with them in the past few years.
And how’s that working out for them? For nearly half, the multi-generational living hasn’t impacted the family dynamic, while 25 percent admit the living arrangement has impacted their relationship with their parents for the worse, and 24 percent say it’s been good.
Not that they are living it up. Nearly eight-in-ten of these boomerang children say they currently do not have enough money to lead the kind of life they want, compared with 55 percent of their peers who are not living at home. Still, 77 percent of the former vs. 90 percent of the latter say they do have enough money now to lead the kind of life they want or expect they will in the future.
The phenomenon of boomerang children plays into several financial issues of concern to parents, according to wealth level studies conducted by Millionaire Corner. In households with a net worth between $100,000 and $1 million, 59 percent are concerned about the financial situation of their children and grandchildren, while 62 percent are concerned about their own current financial conditions. These issues is of particular importance to baby boomers ages 55 to 64, 62 percent of whom are concerned about their children and grandchildren’s financial futures, and 64 percent of whom are concerned about their own.
Depending on how long their children opt to live at home, it could ease concerns of the 50 percent who said that they are concerned about having someone to care for them in their senior years.
The unemployment rate in February for 25 to 34-year-olds is 8.7 percent, a decrease, but still above the national average. But while boomeranging may give young adults a temporary(?) safe haven, it does have an adverse impact on the economy. Young adults living at home are not contributing as much to the economy as they would if living alone. They’re not paying rent, shopping for groceries or dwelling furnishings, or starting households of their own. Each new household adds about $145,000 to output that year as the spending ripples through the economy, Mark Zandi, chief economist at Moody’s Analytics, told The New York Times.
How can boomers and boomerangs co-exist in their renewed living situation? The My Dollar Plan blog offers some suggestions to ease the transition into multi-generational householding:
· Set some ground rules
· Work out space issues
· Set up financial arrangements ahead of time
· Have an end-date in mind
· Do what works best for you
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.