Boomerang kids — adult children who move back home due to financial or career delays or setbacks — can inflict significant damage on your finances, and especially your retirement savings. About half of American adults have sacrificed some of their retirement savings to help their grown children. You should make sure you know exactly how much you are contributing towards your children’s expenses, and ensure that they prepare a written budget. You should also make them pay rent in order to encourage fiscal responsibility.
- About 20 percent of working American adults aren’t saving for retirement, and about half have used retirement savings to help their children.
- Boomerang kids are offspring who move back home because they aren’t making enough money or have had some kind of setback — an increasingly common arrangement.
- Making your kids pay rent can help your children become more disciplined about money.
“While most parents would do almost anything to help their children, knowing where to draw the line and when to withdraw financial support can be critical for both young adults and their parents when it comes to the pursuit of financial security and independence for both parties.”