We have two adult children who have failed to launch and don't appear to be moving out anytime soon. As much we love them, if they live at home for the next five years, I feel it will be to our detriment financially. Should I be asking them to chip in when it comes to living costs?
It wasn't too long ago when children couldn't wait to leave home and find their own place to live. Instead these days adult children prefer to live with their parents well into their 20s. In fact research is forecasting an increase to nearly 1.1 million 18-29-year-olds staying at home by 2021, a staggering 36 per cent of the population in that age group.
While the reason may be their preference to defer marriage, travel or study, more young men than women are inclined to stay at home with the most popular life stage being those young adults who have never married, have not had a de facto relationship and don't have a child or mortgage, making up 42 per cent of the demographic.
Whether you have not left home or have left and returned, living at home with parents is a common occurrence in the lives of today's young adults and while it is nice to have the kids under one roof, the real effect on parents is whether or not they will realise their retirement aspirations. In fact it is likely to be that at the very time when parents should be maximising their retirement funds, they're still supporting, or partially supporting, their children.
If left on their own, parents may well have sold the family home and moved to a smaller property and downsized or focused on repaying more of the home loan or adding to their superannuation than supporting their kids.
If your child has failed to launch and is still living at home, careful planning is important to ensure you still have the resources for a happy retirement. Ask yourself:
Will you be debt free?
Having debt in retirement drains your cash flow. Ensure you know what repayments you need to make to reduce this to nil by retirement.
What retirement income will you require to support your planned lifestyle?
Track your expenses for three months to determine what your current living costs are.
When do you plan to retire and are you on track?
Talk to one of our Financial Planners at Southern Advisory to ensure you are on track and work out how much you will need to save in the meantime if you are currently off track.
If there is a gap between where you are and where you want to be, it might be time for a little tough love with parents opting to ask for some assistance of their adult children. Where the young adults are fully employed, they may contribute to the housekeeping costs and board. If they're at university their parents may well be supporting them or, even if employed, some parents may be reluctant to ask for money.
Remember though that this may be to your own detriment and affect your ability to be able to help your children and grandchildren down the track. You will also be in a better position to help your children for a longer period of time if you first look after yourself financially. Careful planning and good advice will not only help ensure you are on track but might also guide you to help your own kids to be financially independent themselves or even encourage your kids to "fly the nest".
Source: Olivia Maragna for smh.com.au