Boomerang Generation
The “Boomerang Generation” – The Return of the Children
Middle age is usually considered to
be a life stage where you experience the “empty nest” as children leave home.
For many people in their 50s, this has not been the reality; a growing number
of “returnees” dubbed the “boomerang generation” are postponing the traditional
expectations of leaving home and returning to their childhood bedrooms.
Why do they return?
The “boomerang generation” is largely back home as a matter of necessity. In the current economic climate, most have little choice but to turn to relations or friends for somewhere to live on the cheap. The job market is bleak, with unemployment on the increase, low salaries for entry-level jobs and the increasing cost of accommodation, make it difficult for young people to be able to rent, let alone own their own property soon after they graduate.
The implications
This change in the pattern of life’s
stages can lead to delayed independence. Indeed, parents may actually be
holding their children back from success and a fulfilling life by overindulging
them. Naturally, many young people would rather keep their options open and
are not willing to compromise and accept just any first job. Unfortunately,
they tend to ignore the need for saving and investing but are often more
pre-occupied about the now and instant gratification.
Obviously there are also significant
financial implications for parents who themselves have retired or are
approaching retirement. The limited funds they have accumulated to be able to
enjoy a secure and comfortable retirement after several years of sacrifice for
their children are now being spent on grown up children.
Plan Ahead
There is the very real possibility that one or more of your children may return home for a while, so as you make projections as to the level of income you may require to sustain your retirement, keep this in mind; this will inevitably raise your monthly costs or could even delay your retirement plans. In your 40s or 50s, it is likely that you simultaneously have to bear the costs of caring for aging parents, continue to support your children and fund your own retirement.
Do not jeopardize your retirement
Although you may feel somewhat cash strapped from paying off your mortgage, raising and educating children, and perhaps shouldering some of the costs of care for your parents, be careful not to jeopardize your retirement savings; try to continue to budget, save and keep any debt under control so that you can retain your independence in your retirement years.
Set some parameters
If you have “boomerang” children, have a conversation to lay out terms or a broad understanding with clear parameters set. In some cultures, parents go as far as to draw up a formal contract to outline expectations and financial responsibilities. It is easy for children to slip back into the routine they had before they left home several years ago, but you should encourage them to contribute in some way towards the upkeep of the house; this might include contributing towards weekly groceries, petrol and utilities such as diesel, and cable TV if they are employed.
Encourage your children to have a clear financial plan to
help them develop sound financial habits that will last them a life- time. Even
whilst they are still under your wing, they can learn some strong lessons about
the real world as they navigate the transition from young adulthood to
financial independence.