Question: I'm retired and want to be mindful about my spending, but my adult son wants to move back home after his divorce. What should I do?
Answer: It’s not an uncommon thing for people to be more mindful of their money once their careers come to an end. It’s one thing to splurge regularly when you’re bringing home a steady paycheck. But when you’re retired and limited to the money in your IRA or 401(k), coupled with a Social Security check, it’s natural to find yourself getting a bit more frugal.
The reality is that even with millions of dollars in retirement savings, the fear of running out of money can be overwhelming. A recent Allianz survey found that 64% of Americans worry more about depleting their nest eggs than passing away.
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Plus, most retirees don’t have millions of dollars in their nest eggs — not even close. The Federal Reserve puts the median retirement savings balance among Americans 65 to 74 at just $200,000, as of 2022, the most recent year for which data is available. And while stock market gains since that point have likely boosted that number, it’s fair to say that the typical retiree may need to watch their spending to avoid running out of funds.
You may be trying your best to preserve your savings while living your best retirement life. But if your adult child asks to move back home following a divorce, it could put a serious wrinkle in your plans. So it’s important to know how to respond to such a request.
Setting ground rules is key
If a grown child of yours is seeking to move back home, you’re in good company. An astounding 46% of parents say their adult children, ages 18 to 35, are moving back home, according to Thrivent.
Given the emotional and financial impact of divorce, it’s easy to see why an adult child would want to return to the nest. And if you have the space, you may be inclined to say yes. But you also don’t want your son’s return to upend your finances, so it’s important to set ground rules, says Ryan McLin, Founder and Lead Financial Advisor at Impact Wealth Group.
“Helping your child is admirable and most of us would do it in a heartbeat, but your retirement nest egg wasn’t built to support extra expenses long-term,” McLin warns. For this reason, he says, setting expectations and boundaries is vital.
Christina Lynn, Director and Wealth Strategist at Mariner, agrees.
“You worked hard for this chapter,” she says. She also suggests asking yourself, “How much can I give without sabotaging my finances?” That should make it easier to have a collaborative talk with your child.
From there, she says, talk numbers. Will your son contribute to groceries, utilities, or chores, and to what extent? Will your son get to live rent-free, and if so, for how long? And how will cleaning and shared spaces be handled?
“These may seem like small details, but over time they’re often what sour relationships if left unspoken,” Lynn insists.
McLin thinks that in a situation like this, “Your child should have some skin in the game. This should look more like a roommate agreement, and not back to the days of taking care of your dependent child.”
McLin also says it’s important to be honest about your need for space and your desire to maintain routines you have.
“Set expectations for quiet hours,” he insists. “Remember, you didn’t help your child launch to watch them throw hot tub parties at 1:00 am.”
Have an exit plan
While it’s a generous thing to welcome an adult child back home to get them back on their feet, you may not want to keep the arrangement open-ended. Instead, establish a time frame for when your child will move out. It could be three months, six months, or longer. But it’s important to have that conversation so an extended stay doesn’t become a permanent one if you don’t want it to be.
As Lynn shares, “I once had a client whose daughter’s family moved in ‘just for six months’ between jobs and building a house. Without clear agreements, six months became three years.”
McLin agrees that it’s best to have an exit plan.
“Set recurring check-in times with a clear move-out date while helping them plan their next step,” he suggests.
Consider alternatives
You may be perfectly open to the idea of your adult child moving back home. But if you aren’t, there may be other solutions, Lynn says.
She suggests asking yourself, “What arrangement would let you support them without losing yourself or straining the relationship?”
Even if you’re trying to be careful with your spending, you may have the wiggle room to support your child by paying their rent for a few months without compromising your long-term financial security.
Of course, this will mean taking a close and honest look at your finances, and perhaps consulting an advisor to make sure you’re making a prudent decision. But if you’re in a reasonably good place financially, it may be feasible to help foot the bill for your son’s attorney fees so that his finances aren’t strained, or cover another cost that allows him to continue living independently.
All told, there are ways to make supporting an adult child work, even when you’re trying to keep your retirement spending in check. The key is to be honest with your child as well as yourself, Lynn insists.
“This isn’t about choosing between your retirement dreams and your family,” she says. “It’s about honoring both.”
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