What Happens When Your Adult Child Moves Back Home — and How to Protect Your Retirement
Higher living costs and home prices may mean that your household has become a multigenerational one. For many young adults, living with their parents eases the anxiety that can come with high prices and job insecurity.
But retirees may be worried about higher grocery bills and utility bills impacting their savings and monthly budgets when a child moves in with them. Here's how to support your adult kids while keeping your nest egg in check.
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Why adult children are moving back home
High living costs, student debt and a challenging job market can make it difficult for young adults to live on their own. Pew Research found that 18% of adults aged 25 to 34 lived in a parent’s home in 2023, with young men more likely than young women to do so.
While this arrangement can help you create more memories with your adult children, you still have to keep personal financial goals in mind, such as paying off debt and planning for your retirement.
How it can affect your retirement
Having an adult child back in the home will result in some higher costs. Groceries, utilities, insurance, transportation and phone plans can become more expensive. If your adult child is unemployed, you may have to support them even more, which can trim your nest egg.
All of these extra costs can lead to parents reducing their 401(k) and individual retirement account (IRA) contributions and tapping into their emergency savings. Parents without those resources may even have to take on credit card debt, likely delaying retirement in the process.
A 2025 survey from Thrivent found that 38% of parents with adult children back home said their long-term financial goals, including retirement, have been affected by an adult child living at home. The survey also found that 60% of adult children say their parents don’t discuss the financial impact with them.
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How to set boundaries without damaging the relationship
Having a plan in place for how much an adult child will contribute financially to the household can help — and even better if you write it down. (This can help establish non-money-related rules as well, such as around chores, privacy and guests). This clarity can prevent any arguments that can stem from both sides not understanding how to approach the arrangement.
Parents should estimate their new monthly expenses now instead of being caught by surprise. Having your adult child contribute regularly — and pursue side hustles if they are not currently employed — can provide extra cash that can cover some expenses. It may also serve as a good bridge for young adults who are looking for full-time jobs.
While parents can charge rent to their adult kids, they don’t have to set it at market rent. A modest contribution may be sufficient to cover extra costs and ensure that the adult child can save for their own financial future. If your child is hesitant about getting their own place, you may offer to co-sign a loan or lease with them. Just keep in mind that if you do that, you’re on the hook legally and financially.