As I write about often in my posts, the Baby-boom Generation are right in the midst of making the transition toward retirement. As they do so, they must come to grips with the unique risks associated with this transition. But a recent phenomenon is adding a new complexity to the boomers ability to plan for the retirement financial goal. One of the realities in the era Post-Great Recession is that more adult children are expecting financial help from their parents.—in the form of a down-payment for a home, tuition payments, or in many cases a roof over their head.
There were some interesting statistics in a recent Harper's magazine article. 85% of this year's college graduates were planning to head back to live with parents for at least some time. Columbia University conducted a study in 2010 that showed 52.8% of 18- to 24-year-olds were living at home, up from 47.3% in 1970. That means that it is now more common for this age group to be living with their parents. Some of this can be attributed to the protracted unemployment we are facing on a national level. Others are trying to super-charge their savings to attempt to get ahead in saving for a home. Still others help parents in meeting monthly expenses.
The challenge (and danger) to the Boomers, is in the cases where a child living with them (or using funds ) is a significant drain on funds that were earmarked for use in retirement. While some folks may have a goal to leave a financial legacy, this is not to be focused on at the expense of running out of money in retirement. This creates a difficult psychological position for parents and is another side-effect of stutter-step recovery to the global financial crisis of 2008.
There were some interesting statistics in a recent Harper's magazine article. 85% of this year's college graduates were planning to head back to live with parents for at least some time. Columbia University conducted a study in 2010 that showed 52.8% of 18- to 24-year-olds were living at home, up from 47.3% in 1970. That means that it is now more common for this age group to be living with their parents. Some of this can be attributed to the protracted unemployment we are facing on a national level. Others are trying to super-charge their savings to attempt to get ahead in saving for a home. Still others help parents in meeting monthly expenses.
The challenge (and danger) to the Boomers, is in the cases where a child living with them (or using funds ) is a significant drain on funds that were earmarked for use in retirement. While some folks may have a goal to leave a financial legacy, this is not to be focused on at the expense of running out of money in retirement. This creates a difficult psychological position for parents and is another side-effect of stutter-step recovery to the global financial crisis of 2008.
