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The financial impact of boomerang kids

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Boomers view the world from a boomer-centric world view: Anyone who does things differently than we do, well, they’re the ones who are different, not us. For instance, we marvel at the willingness of today’s young adults to hang around home until they’re 25, 26 years old or even older. “Why, when we were out of school,” we tell our kids, “we got our own apartment as soon as we could! We were just itching to be on our own!”

The implication is that something is just not right about today’s “boomerang” kids, returning to the nest. But now comes a report suggesting that the early independence of boomer youth was the anomaly.

More like their grandparents
In a recent piece in the academic journal The Future of Children, authors Richard Settersten and Barbara Ray contend that millennials have more in common with their grandparents and great-grandparents than we boomers may realize. A century ago, young people were slow to leave their parental homes and start their own families. Becoming an adult entailed a phase of semi-autonomy, in which young people waited until they were self-sufficient before setting up their own households.

The post-World War II economic boom in which the boomers reached adulthood was an exceptional period in history. High-paying jobs were plentiful, with decent wages and benefits, making it possible to support a family. Since then, the downward trend in wages and economic opportunities has driven young people to live at home longer and to postpone marriage and children.

“Having an income that’s adequate to support oneself and a family–or at least the ability to earn one–has always been a precursor to living independently and taking on adult roles, such as
marrying and settling down,” writes Settersten.

A key difference between 1910 and 2010 is that young people today are being supported by their parents financially; a century ago, young people helped support their parents. Another is that the concept of adulthood is changing. Traditionally, key markers of adulthood were finishing school, getting a full-time job, becoming financially independent, getting married and having children. Increasingly, family and parenthood are considered optional. Also, rising levels of education require today’s young adults to defer independence while they earn an education.

Prior generations could develop retirement plans without worrying much about their offspring boomeranging back home. Boomers do not have that luxury.


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