'Boomerang' Kids Eat Into Expenses, Retirement Savings

Summary

Bloomberg's Suzanne Woolley discusses the financial impact of adult children moving back home, noting average added expenses of $1,500 a month and the risk to parents' retirement savings. She shares advice from financial planners on setting expectations, charging below-market rent with gradual increases, and protecting one's nest egg to avoid delaying retirement.

• Adult children returning home cost parents an estimated $1,500 per month on average.
• The trend is not limited to recent graduates; divorcing adults with children and pets are also moving back.
• A Thrivent survey found half of those supporting an adult child say it affects their finances, and one in five would reduce retirement savings if needed.
• Financial planners recommend setting clear expectations around rent, privacy, and household rules from the start.
• Charging below-market rent that increases over time can create an incentive for adult children to eventually leave.
• Parents are warned against raiding retirement accounts or delaying retirement to subsidize adult children.