Then in December, she finally accepted her parents’ invitation to move into their home - at age 52. “I’m back living in the bedroom that I grew up in,” she said.
Taking shelter with parents isn’t uncommon for young people in their 20s, especially when the job market is poor. But now the slumping economy and the credit crunch are forcing some children to do so later in life - even in middle age.
Financial planners report receiving many calls from parents seeking advice about taking in their grown children following divorces and layoffs.
Kim Foss Erickson, a financial planner in Roseville, Calif., north of Sacramento, said she has never seen older children, even those in their 50s, depending so much on their parents as in the last six months.
“This is not like, ‘OK, my son just graduated from college and needs to move back in’ type of thing,” she said. “These are 40- and 50-year-old children of my clients that they’re helping out.”
Parents “jeopardize their financial freedom by continuing to subsidize their children,” said Karin Maloney Stifler, a financial planner in Hudson, Ohio, and a board member of the Financial Planning Association. “We have a hard time saying no as a culture to our children, and they keep asking for more.”
Bauer’s parents won’t take rent money or let her help much with groceries. She’s trying to save several hundred dollars a month for a house while working as a meetings coordinator.
Bauer would prefer to live on her own, but without her parents’ help would “probably be renting again and trying to stick minimal money in the bank,” she said.
Shirley Smith, 80, said she and her husband didn’t hesitate when they invited Bauer to return to their home in Eden, Wis. Buying groceries for another person isn’t stretching her budget too much, she said.
“I’ve got three kids and any of them can come home if they want,” she said.
But plenty of well-meaning parents must delay retirement or scale back their dreams because they have to help their children, Stifler said.
Some of Erickson’s clients are giving as much as $50,000 at a time to their kids, many of whom have overextended themselves with big houses or lavish lifestyles. And the sliding economy might threaten their jobs.
Parents feel guilty if they don’t offer help, but she warns them to be careful with their savings.
“I almost have to act like a financial therapist if you will,” she said. “‘Here is the line I’m drawing for you. That’s fine. You can do up to this point, but at this point, now you’re starting to erode your own wealth.”’
Anna Maggiore, 27, lost her job as a publicist in Los Angeles about three years ago and moved into her parents’ house in Los Alamos, N.M.
She tried to find jobs, but nothing stuck, so she enrolled full-time at the College of Santa Fe to finish her bachelor’s degree in business.
She figures her parents spend about $1,000 a month on her, including a car payment, car and health insurance, school and other costs. Her father is a retired nuclear physicist and her mother, a guidance counselor, will retire this spring. Now Maggiore is looking for work so she can supplement their income.
“It’s kind of hitting me finally that I need to get out there and find a job,” she said. “Even if it’s just part-time just to help out however I can.”
