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Benefits October 21, 2013
Young Adults Affecting Parents' Finances
October 21, 2013 (PLANSPONSOR.com) – Many young adults are living with their parents and it is having an impact on their parents’ finances and ability to save, a survey suggests.
Reported by Kevin McGuinness
Respondents to the survey by Securian Financial Group were given a list of options for compensating their parents for room and board. When asked to select all options that applied to their situation, the majority (82%) said they help with household chores and nearly half (49%) said they contribute to household expenses. Only 10% of respondent said they pay their parents rent.
A small number (4%) of respondents indicated their parents delayed retirement to help cover the cost of their children living at home. Securian believes it is possible this percentage is actually higher, citing the fact that many respondents indicated a lack of knowledge about their parents’ finances.
“Most of these young adults are in the dark about the effect they have on their parents’ finances,” said Michelle Hall, market research manager, Securian Financial Group, St. Paul, Minnesota. “Nearly 45% said their living at home has no financial impact. Yet elsewhere in the survey, nearly half (44%) of those same people said they are unsure of the impact. They simply do not know how living at home affects their parents financially.”
The survey also found Americans are tight-lipped about their personal finances, with some not divulging their incomes, net worth or debt to anyone—not even their financial advisers or their grown children. In addition, few parents make financial demands on their grown children. For example, 8% of respondents said their parents ask for no compensation of any kind, and only 9% said their parents set a deadline for moving out or conditions for how long they may stay.
When asked whether they would return the favor and house their parents if they were unable to live in their own homes, nearly 70% of young adults surveyed said yes. Another one-fifth (21%) said yes, but they would explore other options first.
The survey queried 700 young adults living with their parents, and was conducted by Securian Financial Group in August and September. More information about the survey can be found here.