Multigenerational families are more likely to say they have trouble covering expenses.

In recent decades, the definition of “family” has expanded well beyond the traditional married heterosexual couple with at least one child.

Today, American families include multigenerational families (three or more generations living in the same household) and boomerang families (in which a child age 21 to 35 left and later rejoined the household), among other family structures.

A new study by Allianz Life, released Wednesday, finds that many modern families are experiencing financial stress because of their nontraditional structure, though some accept this as a tradeoff for closer family ties.

Forty-one percent of multigenerational families in the study and 34% of boomerang families said they often felt financially burdened because of their household makeup.

This compared with 22% of other modern families in the study: same-sex couple families, single-parent families, blended families and ones with older parents with younger children.

Twenty-seven percent of multigenerational families said living with extended family was beneficial for “help with children and/or household responsibilities,” and 54% of boomerang families said they would “prefer to have my adult child living at home with me as long as he/she wants to.”

However, both family types acknowledged the potential financial issues of these living arrangements, notably the significant risk it can create for their retirement readiness.

“The desire for family closeness resonated with many of the modern family types in the study, but especially with Multi-Gen and Boomerang families,” Katie Libbe, Allianz Life vice president of consumer insights, said in a statement.

“These families may choose togetherness over financial security — however, they shouldn’t ignore the effect this could have on limiting their ability to save for retirement.”

The new report is based on a January 2014 online survey of 4,500 respondents, 35 to 65 years old, with household income of $50,000 or more.

In an initial finding from that survey released in May, Allianz Life reported that modern families felt less financially secure than their traditional counterparts.

Tradeoffs

In the new report, 49% of multigenerational families cited health considerations as a benefit of having members of the extended family living in the same household, and 44% cited financial reasons as the upside of this arrangement.

Forty-seven percent of multigenerational respondents said they had fully or partially combined financial resources with their extended family living at home.

At the same time, multigenerational families were significantly more likely that the total of other modern families to feel stress about meeting these financial challenges:

  • Covering current expenses — 72% of multigenerational families vs. 63% of other modern families
  • Getting out of debt — 67% vs. 57%
  • Caring for a parent or relative financially — 60% vs. 31%

Even more concerning, the report said, was that 59% of multigenerational-family respondents said they lived paycheck to paycheck, compared with 47% of other modern families combined. In boomerang families, 48% of parents said they felt more like a friend than an authority figure to their children, compared with 31% of the total of other modern families in the study who said this.

Moreover, 80% of boomerang respondents said they completely or somewhat openly discussed family finances with their children, compared with 71% of other modern families combined.

Indeed, researchers found that boomerang families had taken more steps than any other modern family type to educate their children about money.

They had helped them open a savings account or develop a savings plan, talked about their personal financial situation with their children and encouraged them to invest and save for their own long-term financial goals.

Still, boomerang parents reported negative repercussions from welcoming an adult child back home and focusing on family unity.

Seventeen percent said they had returned to work to make ends meet, versus 12% for other modern families combined, and 16% had delayed or considered delaying retirement, compared with 11% for other modern families combined.

As a result, 48% of boomerang respondents said they were on track to meet their financial goals versus 53% of other modern families combined.

“While these family types should be proud of the close-knit atmosphere they’ve created, they need to understand that financial challenges may result in the future,” Libbe said.

“It’s wise for both Multi-Gen and Boomerang family types to seek out financial professionals that have experience dealing with unique family structures and can provide guidance on how they can balance supporting their family while still planning for tomorrow.”

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