Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Are Baby Boomer’s Empty Nest Dreams Evaporating?

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Baby boomers, it looks like the empty nest may go the way of retirement.

You’ll be working and the kids will still be home.  Maybe this is the design of our New Plan A thanks to the recession.

 A new survey from reports that 37% of boomer women say they have one or more adult children currently living at home. Almost a third requires the child to pay rent; 16% have set a limit to how long the adult child can stay and – almost half of those have extended the deadline because of the recession.

  Is it a sign of the economic times or a trend that speaks to the end of the empty nest as the generation X and Y “children” bounce back more frequently?  Many of us find it one way to help our kids without a huge financial impact on our own budget—which is probably under its own stress right now.

 “The jury is still out on whether this is a temporary adjustment to tough economic times, or a re-jiggering of multi-generational family models that will have staying power over the long run,” said Dr. Carol Orsborn, Senior Strategist for

 A troubling finding is that one-third of respondents have dipped into their retirement funds to support their adult children.  The survey said 35% reported using funds set aside for their retirement/future to help an adult child or grandchild.  That’s disturbing because unless you have a very healthy retirement fund and pension using your retirement money to help your children is probably putting your financial future at risk. Helping your grandchildren might be a different story depending on your age and your retirement funds.

 Just like they say on the airplane – put your oxygen mask on first, then help your child with theirs.  In the case of money, time is on their side.  Time is not on your side when it comes to your retirement savings.

 If you can provide financial assistance through your regular income, then making the choice to divert your funds to, say helping them rather than adding to your savings is fine.  Though you might want to consider whether this means that you’ll have to work a bit longer or scale back your lifestyle (current or future) a bit.

 But tapping into your retirement savings not only depletes your nest egg, but also may trigger tax consequences for you.

 Then there is the “24-hour Mom ATM” as so accurately calls it.  Almost 30% say they are helping with housing costs, 26% with daily living expenses, 17% with education and 17% with healthcare.

 Okay, personally guilty here as I pick up ‘things” for my struggling young adults.  In fact yesterday I helped support a new checking account minimum balance requirement so she could forgo monthly fees (I hate those bank fees!)  with a promise to payback soon.

 The healthcare issue is a big one since many of the jobs young adults find don’t come with health insurance and they no longer have access to their parent’s insurance.  As the Administration struggles with health care reform, one big benefit for both young adults and their parents would be affordable healthcare.

 It’s hard for most baby boomer parents to know where to draw the line on helping their adult children financially.  One place to start is to draw the line at tapping into your retirement savings and putting your financial future at risk.


Written by Laura Rossman

June 18, 2009 at 3:06 pm

One Response

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  1. Good job Laura. The kids bounce back, which we personally have had and then the elderly parents must move in, which we have now. Praise God that we haven’t had both sides of this sandwich at once. The kids have flown the nest and it’s still nice to spend some time with Mom.


    June 18, 2009 at 4:44 pm

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