Retirement is supposed to be a time of relaxation and enjoyment, right? But for many retirees, financial pressures can make it anything but.
One big issue that’s popping up more and more is adult children returning home or not even moving out.
In fact, just over half of young men (54 per cent) and 47 per cent of young women aged 18 to 29 years old are still living under the same roof as their parents.
As of 2022, nearly 60% of retirees are worried that inflation will weaken the economy and further deteriorate their financial situation. This concern is echoed in the increasing costs of healthcare and everyday living, making it difficult for retirees to manage their budgets effectively.
These financial pressures are making what should be a peaceful retirement phase stressful and challenging. As more grown-up children move back in, retirees find their savings depleting faster than anticipated, leaving them anxious about the future and their ability to sustain a comfortable lifestyle.
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Trigger events for adult kids moving back in with mum & dad
As parents, it’s natural to want to support our children, especially when they face tough times. Opening our homes to them can provide the stability they need to get back on their feet.
Here are the most common reasons why adult children move back home with elderly parents:
- Marital breakdown
- Divorce or separation
- Job loss
- Financial difficulties
- Saving for a home deposit
- Cost of living pressures
- Serious illness or accident
Whether they’re dealing with job loss, financial difficulties, or other personal challenges, offering a safe and supportive environment can make a significant difference in their recovery.
How kids moving back home affects parents in retirement
The decision of an adult child to move back home with parents is usually made reluctantly. Afterall, most adults value their independence. Often it’s a short-term arrangement that might last from a few weeks to several months.
However in some cases the arrangement can persist for years. And sometimes it’s not just one child; it can mean the grand kids and even the spouse too. Indeed, when the whole next generation of family moving in can put the retired homeowner parents under real emotional and financial pressure.
Here are the main adverse effects:
- Less space in the house
- Less privacy
- More noise and clutter
- Higher energy bills
- Higher grocery bills
- Arguments and conflict
- Possible home renovation costs
- Higher property maintenance costs
Tapping the Home Equity Help Line
For elderly parents who need extra financial cushion to support their kids, a home equity loan or a Reverse Mortgage might help.
This regulated financial product will allow you to turn a portion of your home equity into cash without selling your home or worrying about monthly mortgage payments.
This gives you immediate access to funds that can help support your adult children or cover other unexpected costs, easing some of that financial stress.
The great thing about a Reverse Mortgage is its flexibility. You can choose to get the funds as a lump sum, in regular payments, or as a line of credit. This means you can tailor the financial support to fit your specific needs and circumstances.
Preserving Savings and Superannuation
By tapping into your home equity, it’s possible to avoid or delay dipping into savings and superannuation. This way, retirement funds stay intact, ready for future needs and emergencies.
Keeping a healthy superannuation balance gives you long-term financial security. It’s a comforting thought, knowing there’s a safety net to fall back on, reducing overall financial stress.
Unlike traditional mortgages, a Reverse Mortgage doesn’t require monthly repayments. This significantly eases the financial burden, allowing you to maintain your current lifestyle without the pressure of additional monthly expenses.
You get to continue living in your beloved home, preserving your independence and avoiding the emotional and physical toll of moving or downsizing.
RELATED POST: [ Reverse Mortgage or Downsizing: Which Option is Best for Your Retirement? ]
Want to learn more about Reverse Mortgage? Find out more about how to use a Reverse Mortgage for debt consolidation or download your FREE REVERSE MORTGAGE GUIDE.
Ready to Apply? You can now check your eligibility online or call Seniors First on 1300 745 745.
*Names have been changed to protect the privacy of Seniors First customers.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before you make any decision.
