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.
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.
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