An increasing number of Americans are moving back in with their parents amid challenging economic conditions.
So called ‘boomerang kids’ - who return home to live with mom and dad - are finding it hard to make ends meet due to the cost of living and significant levels of debt, but their decision may have negative consequences for their long-term finances – and those of their parents.
The Thrivent 2024 Boomerang Kids Survey reveals that 46% of parents who took part have had their adult children return home at some point with rent and housing cited by 50% of them, up from 35% last year.
The burden of student loan debt means many young adults are delaying buying a home (39%), saving for retirement (34%) and saving for emergencies (36%) while 28% say that student loan debt is causing them to live paycheck to paycheck. Only around one fifth of respondents said their first job is helping them pay down debt.
When the kids move back home, the impact on mom and dad’s ability to keep on top of their finances is also clear with 38% saying they are struggling to pay off their own debt (23% said this in 2023) while 37% say it’s harder to save for retirement or buying a home, up from 16% last year.
As for the prospect of adult kids leaving the family home, 55% of parents would give their offspring a C for financial independence readiness and 11% would give them an F.
The report suggests that parents should engage with an advisor to draw up a financial plan to help them understand how much they are able to help their grown up children financially.
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