Why Americans without Retirement Savings are Moving in with their Millennial Children

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Sian-Pierre Regis, 35, is used to living with roommates. For the past 10 years he has split the rent on his apartment with two to three friends. But in June, he’s getting a co-tenant of a different sort: his 78-year-old mother, Rebecca. A situation neither of them ever expected would happen.

Rebecca has been able to live off her slim retirement savings and part-time work, but when the coronavirus pandemic hit, she found herself out of work, and at the end of May the lease on her subsidized housing expired making it impossible for her to pay her rent.

Mr. Regis is one of the growing number of millennials who are supporting their parents financially and, in some cases, giving them a place to live. 

Known as the reverse-boomerang effect, the phenomenon of parents moving in with their adult children, often for financial reasons, is on the rise. According to a Pew Research Center analysis of population data, 14 percent of adults living in someone else’s home in 2017 were a parent of the head of household, up from just 7 percent in 1995. With the trend expected to balloon in the coming decades as baby boomers leave the work force but can’t afford to support themselves.

Expressed in starker terms, the Center for Retirement Research at Boston College has predicted that half of today’s workers will not have enough savings to sustain their standard of living when they retire.

According to the AARP Public Policy Institute, one in five Americans will be over the age of 65 by 2030 (compared with one in seven in 2017), and our nation will face a severe shortage in accessible and affordable housing to meet their needs.

While that trend is largely driven by 20-somethings living with their middle-aged parents, researchers found that older adults were also significantly more likely to be living with their grown children in recent years than they were in the 1990s.

Younger Americans should take this pattern seriously, says Georgia Lee Hussey, a financial planner in Portland, Ore., who has clients across the country. “Most of my clients have at least one parent that needs to be factored into their financial plan,” she said. “What’s tricky is that for some families, it can be unexpected.”

To make room for their parent(s), some millennials have arranged to install what is known as an accessory dwelling unit — a secondary apartment built on a single-family residential lot. For others the aid is simply by way of money, sending money every month to their parents and basically paying double for rent or a mortgage. Many say they find validation in the fact that they can provide for their family and wouldn’t have it any other way. And in some cases the grandparents are taken care of as well.

These early reverse-boomerang pioneers are laying important groundwork, says Rodney Harrell, the vice president of family, home, and community for AARP. “As it becomes more normalized for older adults to live with their grown children, I think it will get easier for everybody,” he said. “If your neighbor builds an accessory dwelling unit, or has their parents living with them, you might realize it’s a viable option for you and your family, too. In our country, the elderly often become invisible. We don’t see them, and we don’t feel like we need to help them. But they have so much to give, and maybe, if they live in our homes with us, people will realize that more.”

(Reposted from a longer article in the NY Times.)
 
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