Struggling to Manage Finances After Retirement As My Adult Son Desires to Move Back Home Following His Divorce, I'm At a Loss
In the wake of a divorce, many retired parents find themselves in a unique situation when their adult children choose to move back home. A recent survey reveals that 46% of parents are accommodating their children, ages 18 to 35, who are returning to the family nest[1]. This shift can raise concerns, particularly when it comes to financial security, as the retiree's primary focus is often on preserving limited income from IRA, 401(k), and Social Security.
Ryan McLin, Founder and Lead Financial Advisor at Impact Wealth Group, advises treating the arrangement as a roommate agreement, not a situation of taking care of a dependent child. To ensure a smooth transition, it's essential to set ground rules to avoid upending finances.
One of the first steps is to create an exit plan with a definite time frame. Agree on how long the adult child can stay (e.g., three or six months) and set a clear move-out date to prevent the situation from becoming indefinite, as lengthy stays can strain both finances and relationships[1].
Another crucial aspect is to have scheduled conversations to review progress toward independence and discuss next steps, helping ensure accountability and shared understanding[1]. These check-ins can provide an opportunity to discuss financial contributions, such as contributions to groceries, utilities, or chores, and the extent of these contributions.
Christina Lynn, Director and Wealth Strategist at Mariner, suggests asking oneself "How much can I give without sabotaging my finances?"[1] It's important to establish a time frame for when the adult child will move out and consider alternatives to moving in, such as temporarily helping with rent or legal fees, enabling the child to maintain independent living without long-term impact on the parent's finances[1].
Lynn warns about open-ended arrangements potentially becoming permanent without clear agreements. She insists that supporting an adult child doesn't have to be a choice between retirement dreams and family, but about honoring both[1]. Leaving small details unspoken can potentially sour relationships over time.
In essence, balancing generosity with prudence through defined limits, financial agreements, and an agreed-upon timeline can help retired parents support an adult child after divorce without compromising their financial security[1]. The length of the adult child's rent-free stay and the handling of cleaning and shared spaces should also be discussed.
Related content includes discussions on the pros and cons of moving in with an adult child, ways to help adult children without spoiling them, and potential risks of financially supporting adult kids. It's a delicate balance, but with clear communication and well-defined boundaries, both parties can find a way to support each other without jeopardizing their financial futures.
- In light of the post-divorce living arrangement, it's crucial for parents to consider their lifestyle and family dynamics, as well as their personal finance, while accommodating their adult children who return home.
- Ryan McLin and Christina Lynn emphasize the importance of establishing financial agreements and setting timelines when an adult child moves back in, ensuring the balance between generosity and prudence, and preserving the financial security of the retired parents, while maintaining positive relationships with the returning family member.
