Many retirees worry about where they will live when they get older and invest significant thought into considering different living arrangements. It’s a special circumstance with a lot of variables to consider: financial concerns, caregiving needs, family relationships, interests, and location. In an effort to remain independent and be close to family, an increasing number of retirees are considering multi-generational living arrangements.
Research suggests that more than 51.4 million - or one in six - Americans live in multi-generational families.[i] A 2012 report by a national homebuilder found that 32 percent of adult children expect to eventually share their home with an elderly parent.[ii] Modern multi-generational households come in many shapes and sizes, often bringing together grandparents, adult children, and grandchildren under one roof. Some retirees spend significant time traveling and only live with family part-time.
The motivations for these household arrangements also vary. Many families live together for financial reasons, while others do so for caregiving or childrearing support. Some families simply enjoy having closer relationships. Whatever the reasons, an increasing number of families are seeking out a more interdependent style of living.
Multi-Generational Living Has Potential Advantages
There are many emotional benefits to living with family. In studies, retirees have cited the joys of spending more time with grandchildren and forming closer relationships with their adult children as major benefits. A 2011 survey found that 82 percent of respondents agreed that multi-generational living had enhanced familial bonds.[iii]
There are also practical reasons for multi-generational living. Many retirees worry about outliving their assets or paying for healthcare later in life. Rising long-term care costs mean that Americans are looking at major expenses for assisted living or nursing home care that can empty their savings. Living with family can help reduce living expenses while allowing you to live independently for longer. A growing cadre of aging-in-place specialists means that elderly Americans have more options for remaining in their homes. Homebuilders are also jumping onto the trend by offering “Next Gen” floor plans that include multiple master bedrooms and flexible living spaces that can change with a family’s needs.[iv]
Living Together Also Presents Challenges
The multi-generational living plan has some definite challenges. Personality types, in-law relationships, and different living styles can all cause friction. Rigid expectations about family routines, childrearing, and housekeeping can also lead to resentment. It’s also not uncommon for parents and adult children to struggle to establish relationships that respect autonomy and personal boundaries.
It’s critical to discuss joint finances and caregiving expectations in detail long before moving in together. Writing down plans and developing budgets can help avoid misunderstandings and regular family meetings can nip problems in the bud. It’s also wise to be flexible and to expect circumstances and needs to change over time.
The financial details of home ownership and estate plans can also create challenges, especially when there are family members outside of the household to consider. For example, if you and a child will jointly own and maintain a house, how does that affect your life insurance and estate plans? A financial representative can help you understand the financial implications of multi-generational living and develop strategies to meet your changing needs.
The challenges of living in a multi-generational house are not insignificant; but the practical, emotional, and financial benefits may make an unconventional household attractive to you and your family. If you think that a multi-generational living situation might work for you, it’s wise to start talking to your family as soon as possible.
By planning ahead, you can have in-depth conversations about expectations, boundaries, and long-term plans. As with so many things in life, communication, clear expectations, and advanced planning can help you avoid a lot of stress and heartache later.
If you’re interested in potentially living in a multi-generational household, here are some questions to guide your discussions:
- What are each family member’s expectations for the living arrangement?
- Who will be responsible for cleaning, childrearing, caregiving, cooking, and other household chores?
- Who will own the house?
- Does purchasing a new house make sense?
- How will you split living expenses?
- What family routines can you create together?
- What are your expectations for time apart or away from home?
- How will shared housing affect your financial and estate plans?
- What are your long-term eldercare plans?
If you have any questions about the implications of multi-generational households or other living arrangements, please give us a call. Part of our job is to help my clients evaluate different lifestyle choices and we would be happy to assist you.
Maureen Hallaran, NSSA
& Steve Kamen, NSSA