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How to prepare for retirement with adult children living at home

You hoped to be empty nesters by this stage of your life, when retirement rests on your doorstep. However, there’s just one glitch – you have grown children still living under your roof.

Don’t fret. There’s hope. Many parents have figured out ways to support and encourage smart financial habits in their adult children living at home without neglecting (or draining) their retirement savings. Learn steps you can take to make this happen.

Adult children living at home: the facts

Many young adults are hesitant to launch the nest. One in three adults ages 18 to 34 live in their parents’ home. And more male young adults in this age group (36%) live with a parent than their female counterparts (30%).1

Over the years, the number of young adults who call their parents’ home “home” well into adulthood has increased. In 1980, 17.5% of young adults ages 25 to 34 lived with a parent while 31% of young adults in the same age group shared a home with a parent in 2022.2

Coming back to the nest

There are many reasons why young adults are boomeranging back to live with their parents — or don’t leave at all.

Two big events — the 2008 financial crisis and Great Recession and the 2020 coronavirus pandemic — caused many young adults to be laid off, which cut into the time they had to build up their savings. The resulting economic effects set off a new wave of young adults returning home.3

This age group is faced with high rent and interest rates, increased inflation, and student loan debt, which they pay on average $503 a month. For many people, it’s takes 20 years to repay their loans.4

Many young people’s first jobs just don’t pay enough to cover all of their financial needs, especially if they carry student debt. That said, your grown child’s financial expenses don’t have to become your burden to bear.

Be open and honest about your goals and expectations

You and your child find yourselves living under the same roof again. But this time you’re both a little older. And with age comes wisdom.

This means you understand the importance of communication — in both the big-picture and day-to-day stuff. Ask them about both their long-term and short-term plans and goals. It doesn’t need to be an inquisition, but rather a conversation.

Let’s say your child has a job, but doesn’t earn enough money to live on their own. Financial goals might include:

  1. Putting money into an emergency fund for when they are on their own.
  2. Taking full advantage of their employer’s retirement benefits.
  3. Saving enough money to put toward a security deposit on an apartment or a down payment on a house.

Consider scheduling a meeting with a financial professional to help your child establish a budget and some basic financial goals. A one-time session may be all that’s needed.

Develop an exit strategy

You’re happy to help your child by opening your home. But you do eventually want them to fly the nest — for good. So, be sure to agree upon an end date when your child should strive to be flying solo.

Whether it’s a year, 18 months or three years, openly communicate an agreed-upon date, and be open to making any needed adjustments if circumstances change.

Everyone contributes

Many American adults believe a 20-year-old should at least pay their own car payment, car insurance, and cell phone bill, and a 23-year-old should pay for their health insurance and student loans. While living at home, your adult child should also contribute to household expenses by paying rent, for groceries, and perhaps even utilities.4

They can also contribute to household chores. Maybe you can save some money by canceling your lawn or snow removal service since you have an extra set of hands to help with these tasks.

Don’t put your retirement at risk

Here’s a concerning fact: To provide financial help to their children, 43% of the adults surveyed in a recent study say they have sacrificed their retirement savings and 51% say they have sacrificed their emergency savings.5

This may seem like your only option for helping out, but it’s important that you stay the course for retirement. Sacrificing your retirement savings to provide temporary financial support to your children can make a serious impact on your future that you may not have time to recover from.

Remember to put your oxygen mask on first.

If your children move back in with you, keep contributing the same amount to your retirement as you do now. Try to fund their needs out of your normal budget or cash savings — and avoid withdrawing or taking loans from your retirement account. You don’t want to delay your retirement and work longer than you planned.

Encourage good financial habits in your children

Financial habits your child develops now can last a lifetime. And they have a great opportunity to develop good ones while living at home with you.

If you’re subsidizing your child’s living expenses, he or she can skip purchasing those “must-have” luxuries.

Also make sure he or she understands to use credit wisely. Encourage them to pay off any current debt and not take on new debt. This means not opening a credit card (no matter how much money you can “save” by doing so!) at a favorite retail store.

Make your wishes known

You are determined to not let anything stop you from enjoying your empty nest once again. However, unforeseen events can happen at any time.

It’s a good idea to review your will and any directives  and beneficiary  information to ensure everything is up to date, in case anything should happen to you while your child needs to live under your roof.

And remember that this new living situation won’t last forever — so take advantage of and enjoy your family time together.

A positive aspect of your child returning home is that you get to reconnect. You’ll have the opportunity of spending time with the child you raised — and getting to know them in a different light.

The experiences you share with your adult child(ren) will last you well into the future.

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1. Hatfield, Jenn. “Young adults in the U.S. are less likely than those in most of Europe to live in their parents’ home,” May 3, 2023,

2. “Historical Living Arrangements of Adults,” Nov. 15, 2022,

3. Hussain, Ali. “Kids in Parents’ Pockets Eroding Retirement Savings (KIPPERS),” Jan. 26, 2022,

4. Hanson, Melanie. “Average Student Loan Payment,” May 30, 2023,

5. Gillespie, Lane. “Survey: 68% of Parents Have Made a Financial Sacrifice to Help Their Adult Children with Money,” April 10, 2023,

DOFU 9-2023