The Biggest Threat to Your Retirement Might Be Your Kids

If you’re a parent of adult children, you’ve seen the headlines by now: Grown-up kids are moving back in with their parents at record rates. While there are many important considerations involved in the big picture of why this is happening—including the disparity in how wages and inflation have risen—the core of the decision is often to save money.

With rents and other associated living costs hitting such high marks these days, especially in cities where young adults are seeking and are most likely to find work, the ability to forgo rent is no small leg-up. But what does this decision mean financially for the parents who reopen their doors?

A recent study seems to suggest something similar: the monetary gains are real for the adult children, but the monetary hits to the parents involved are also real—especially when it comes to retirement savings. Since new data from Pew Research Center reveals that 15 percent of adults ages 25 to 35 now live at home (compared to 12 percent in 2010), the toll this takes on parents is increasingly worthy of discussion.

To be fair, Americans are generally grossly underprepared for retirement as it is. This CNBC article from November cites a survey reflecting that 57 percent of Americans have just $1,000 in their savings accounts. The same article also cites a report from the Stanford Center on Longevity, which found that only one-third of Baby Boomers in 2014 had any retirement savings at all. With retirement savings already so fraught and not enough social services in place to fully bridge the gap, it makes sense that any extra stress on those accounts can be enough to break any security for their golden years.

The cost of having an adult child move back in goes beyond a slightly increased utilities bill. Parents often wind up paying for food, gas, and other expenses for their grown-kid roommates. Moreover, many young adults wind up in this position because of other costly life changes, like raising children, going back to college, or even affording rehab treatment.

Most parents aren’t willing to simply watch their adult children struggle and are self-sacrificing by nature; they’re hardwired to give what they have to their child, even to their own detriment. So while we aren’t necessarily discouraging the choice to allow your child to move back in, we are encouraging parents out there to become fully acquainted with the documented strain that the decision is likely to bring.

Perhaps parents who move adult children back in can get it in writing that their kids will reinvest in their retirement down the line as a way to keep it balanced? Kidding… well, kind of.