In 1960, just nine percent of adult children lived with parents. Today, that number is closer to 17%, and grows to a whopping 52% when limited to new college grads. While high, the figures make sense when you consider the rather rough circumstances new graduates face when entering the real world. High debt from college loans and few job opportunities make it difficult for young adults to make it on their own, making it increasingly common to move back in with parents for support after graduation.
This phenomenon has long-reaching ramifications that extend well beyond those first few post-college years, however, both for parents and students. We take a look here at some of the secondary effects of the ever expanding Boomerang Generation and what they mean for the finances, attitudes, psychology, and future of parents and grads living through these strange times.
One-third of parents have to remortgage their home to support adult children.
When kids boomerang back home, it often comes at a big financial cost to parents. More and more parents are being forced to refinance their homes (upwards of 28%) to come up with additional funds, as many didn't plan for the costs associated with supporting adult children beyond the college years. Additionally, two-thirds of parents will have to reduce their own daily living costs, sell a car, or be careful to watch utilities and other expenses in order to pay for living expenses or college costs for kids over 18.
The help parents give boomerang kids often affects their own retirement savings.
In a time when it's getting harder and harder to save enough for retirement (health care doesn't come cheap), the plans of many parents are taking another hit. This one often comes by choice, however, with parents tapping into their retirement savings to help bail out young adults struggling to make ends meet. About 30% of baby boomers who've helped out adult children report taking a hit to their own retirement savings as a result. Financial experts caution such kinds of financial support, stating that parents need to consider their own fiscal stability before helping out children.
Two in five parents are giving their adult children financial help.
The costs associated with caring for kids don't end at 18 these days. In fact, many parents spend as much as 10% of their income to support their adult children. While young adults struggling under the weight of student loan debt and high unemployment rates may need help, this support could make it harder for parents to get by, both today and in the future, and may lead to dependence on these same grads later on down the road.
Due to greater acceptance, 85% of college grads plan to move home after graduation.
Once upon a time, an adult child moving back home may have gotten the neighbors talking, but these days, it's pretty common. You might even say it's become the new norm, with more than 85% of grads planning to move home for at least a few months after graduation. For the vast majority, the reasons are financial and may represent a shifting rite of passage in the post-college years, as young adults lean on parents while working at internships and paying off debts.
The millennial generation may be less likely to rebel against the values of their parents.
While not every young adult wants to live at home or gets along swimmingly with mom and dad, a Pew study found that millennials aren't as rebellious as their parents were back in their early twenties. Researchers found that while the boomers may have spent a great deal of time (and effort) rebelling against the values and convictions of their parents, millennials have more admiration for older adults and value their beliefs. These factors make it easier for parents and young adults to develop friendships and may be why many find it easier to move back home than in the past.
Many 20-somethings now put off marriage.
Expectations for adult milestones are different today than they were in the past. Few young adults these days plan to be able to get married, buy a house, or have kids before they're 30. Not only is it hard to date when you're living at home, it's also hard to plan for a future when you're still carrying a great deal of college debt. This debt, which is the main reason young adults move home, is changing how many young people see the progression of their adult lives, which could have some far-reaching and long-lasting effects on American demographics.
Boomers are now supporting both older and younger generations.
Boomers are taking a hit in both directions. Not only are they supporting or caring for their parents, but many are also providing financial support or housing to their children as well. In 2010, about 31% of baby boomers were supporting both their parents and their adult children. While many feel they are fulfilling familial obligations, such support comes at a cost and nearly a quarter have had to stop paying into their own retirement to shoulder these costs. Many more worry about the effects these financial and emotional responsibilities will have on their lifestyle, other relationships, and careers.
Many young adults increasingly rely on advice from adults.
There is no doubt that these are uncertain times, and for many new grads that can mean looking to parents for advice on how to manage careers and finance. While in years past, grads may have plunged forth into the working world without paying much heed to parental nagging, these days, many young adults are actually seeking out their advice. 86% of parents with adult children reported giving their kids advice on their lives over the past month. Compare that to 1988 when the figure was less than 50%. The value of parental advice seems to have gained some cachet with millennials, perhaps seeking help in a world much less easy to enter into than that which their parents faced.
Boomeranging kids may be more likely to care for aging parents.
Adult children who receive help from their parents to get on their feet may be more willing to repay that help by caring for their parents in old age. Relationships forged when children move in with parents may just help pave the way for adult children helping out their parents down the road. Of course, some of this may also stem from parents having to tap into their retirement savings to help out their children, leaving them less financially stable and more in need of help later on.
The phenomenon of boomeranging is changing the young adult demographic not only in the U.S., but also around the world.
Kids aren't just boomeranging here in the U.S. As the economy takes a downturn around the world, college grads are shacking up with mom and dad in higher numbers just about everywhere you look. In the UK they call them "Yuckies," in Italy "Bamboccini". Whatever they're called, boomeranging kids are popping up everywhere, changing how a whole generation of young people are entering their adult and professional lives.
Boomerangers may have spawned a new life stage called emerging adulthood.
In years past, psychologists were doubtful about the legitimacy of the life phase we now call adolescence. Clearly it's gained some acceptance since then, and many see the same happening for the newly coined phase called "emerging adulthood." Psychology professor Jeffery Jensen Arnett is leading the movement to view these years in the early 20s as a distinct life stage. He states that social and economic changes have helped create this stage, as they pursue greater levels of education, put off marriage and kids, and struggle with financial independence.
Many boomerang kids feel like they're stuck in limbo.
Once, graduation from high school or college may have been the rite of passage between the world of an adolescent and a full-fledged adult, but that's no longer the case. Many boomerangers feel trapped in a liminal space that's somewhere in between. Psychologist Arnett studies young adults, and 60% of those he spoke with expressed ambivalence, feeling both like grown-ups and not quite like grown-ups. For many living at home, it can be difficult and sometimes scary to make the transition to adulthood.
Boomeranging only further entrenches the disparities between income.
Moving back home with mom and dad may be more advantageous to those from middle- or upper-class families. Studies show that they're able to give more to struggling kids in college and afterward. They can also afford to send their children to four-year colleges (rather than two-year options) and may be able to offer them help in getting a job. These advantages help these young adults get a leg up and can often reinforce existing income disparities.