The More the Merrier: Modern Families Prioritize Unity over Finances
Allianz Study Finds Happiness Comes in Numbers for Multi-Gen and Boomerang Families, but at a Potential Risk to Retirement Savings
Many modern families are feeling financially stressed due to their non-traditional structure, but some welcome the pressure in exchange for closer family ties, according to LoveFamilyMoney. More than a third of Multi-Generational (Multi-Gen) and Boomerang family types (Multi-Gen 41%; Boomerang 34%) said they "often feel financially-burdened by the number of family members living in our household" compared to an average of 22% for other modern families in the study, which includes same-sex couple families, single parent families, blended families and families with older parents with younger children.
For many Multi-Gen and Boomerang families, having an extra adult family member at home was recognized as a positive aspect of their living situation. More than a quarter (27%) of Multi-Gen families noted living with extended family is beneficial for "help with children and/or household responsibilities" and more than half (54%) of Boomerang families said they would "prefer to have my adult child living at home with me as long as he/she wants to."
However, each family type also acknowledged the potential financial issues created by their living arrangements, most notably the significant risk it can create for their retirement readiness. Specifically, having extra family members, sometimes unplanned, can mean more money spent on current expenses and less available for retirement savings.
"The desire for family closeness resonated with many of the modern family types in the study, but especially with Multi-Gen and Boomerang families," said Katie Libbe, Allianz Life vice president of Consumer Insights. "These families may choose togetherness over financial security – however, they shouldn't ignore the effect this could have on limiting their ability to save for retirement."
- 41%Multi-Gen families
- 34%Boomerang families
Generational Support Weighs Heavy
It's clear that Multi-Gen families – defined as three or more generations living in the same household – see several benefits to their living situation. Some benefits noted from having members of the extended family living in the same household include health considerations (49%) and financial reasons (44%). In fact, nearly half (47%) of Multi-Gen respondents said they fully or partially combine financial resources with their extended family living at home.
Yet, Multi-Gen families were significantly more likely than the total of other modern family counterparts to feel a great deal/some stress about covering current financial expenses (72% versus 63% of other modern families), getting out of debt (67% versus 57% of other modern families), and caring for a parent or relative financially (60% versus 31% of other modern families). Even more concerning, nearly six in 10 (59%) Multi-Gen respondents said they currently live paycheck-to-paycheck compared with less than half (47%) of other modern families combined.
Coming Home, Again: The Boomerang Family
Much like Multi-Gen families, many Boomerang families in the survey – defined as parents with an adult child (21-35) who left and later returned to rejoin the family – demonstrate the same sense of togetherness and openness. Nearly half (48%) of Boomerang families said they feel like more of a friend to their children as opposed to an authority, significantly higher than the total of other modern families in the study (31%). Boomerang families also were more open about discussing family finances, with 80% saying they were completely/somewhat open with their children on the topic versus only 71% of other modern families combined.
In addition, Boomerang parents in the survey have done more to teach their children about money than any other modern family type. This includes:
- 71% said they've helped their children to open a savings account or develop a savings plan (versus 59% for other modern families combined);
- 62% said they've talked about their personal financial situation with their children (versus 49% for other modern families combined) and;
- 60% said they've encouraged their children to invest and save for their own long-term financial goals, including retirement (versus 40% for other modern families combined).
The Boomerang Effect
Yet, welcoming an adult child back home and focusing on family unity is not without negative repercussions. Enter the Boomerang effect. More Boomerang parents say they have gone back to work to make ends meet than other modern families (17% versus 12% for other modern families combined) and more have also delayed or considered delaying retirement (16% versus 11% for other modern families combined). As a result, less than half (48%) say they are on track to achieve their financial goals versus 53% of other modern families combined.
"While these family types should be proud of the close-knit atmosphere they've created, they need to understand that financial challenges may result in the future," added Libbe. "It's wise for both Multi-Gen and Boomerang family types to seek out financial professionals that have experience dealing with unique family structures and can provide guidance on how they can balance supporting their family while still planning for tomorrow."