What if your kids never permanently leave? Yo-yo children can squeeze your retirement. One of the perplexing challenges facing pre-retirees (and even retirees) is the burden of having to continue to look after – in terms of accommodation, financial support and other obligations – adult children who, for whatever reason, are unable or unwilling to permanently leave home.
Such children have been labelled yo-yo or boomerang kids by some commentators, based on the fact that while they depart from the family nest periodically, like a yo-yo they bounce back to the hand that feeds them – much more often than is healthy.
It’s an issue that seems to be increasingly prevalent across the country. Often with a degree, a heavy debt load and poor job prospects, according to Statistics Canada and as also reported in the Toronto Star (January 29, 2017):
- More than one in three (34.7%) young adults aged 20 to 34 were living with at least one parent in 2016, a share that has been increasing since 2001.
- More than two in five (42.1%) young adults in Ontario were living with their parents, by far the largest share observed in the provinces and territories. This proportion has increased by 20.3% since 2001.
- Among the 35 census metropolitan areas (CMAs) in the country, Toronto (47.4%) and Oshawa (47.2%) had the largest shares of young adults living with their parents — almost one in two young adults.
The Example of Christina Newberry
Writing recently in The Globe and Mail (July 1, 2015) Gail Johnson discussed the example of Christina Newberry, self-defined as a boomerang kid. In a nutshell, Gail Johnson reported that after a childhood ‘in White Rock, B.C., Ms. Newberry completed her bachelor’s degree in English and anthropology in Victoria and, like many of her friends, moved back home to figure out what to do next. That was just the first time she returned to her parents’ place. Ms. Newberry went on to study journalism at Vancouver’s Langara College, and bounced back home again at 29 when she was going through a divorce.’
The Hands-on Guide to Surviving Adult Children Living at Home
Christina Newberry is a freelance writer now, aged 37 and living in Vancouver, who has put her own experiences as a boomerang kid to practical use, writing The Hands-on Guide to Surviving Adult Children Living at Home.
Ms. Newberry says in her book that the best piece of advice for parents welcoming a grown child back home is this: Put an agreement in writing beforehand.
Why? Because parents can all too easily run the risk of, as Gail Johnson reports, ‘eroding their retirement funds to support their ever present kids. They may need to delay downsizing to accommodate their children or work longer than they’d planned to cover adult-size expenses.’
How to Say No-No to the Yo-Yo
Ms. Newberry reports that not only financial agreements are important. Agreements related to behaviour and expectations are important, too. She writes: ‘That’s because once you’re living in the situation, if things don’t go as you hoped, it’s very easy for everyone to remember that conversation differently.’
Ms. Newberry adds: ‘If young people have debt, they have their whole working career ahead of them to pay it off. If you’re nearing retirement, that’s not the time in your life to be taking on debt.’
Adult kids should make some sort of regular contribution, Ms. Newberry says, whether it’s called rent or it’s simply a fixed monthly sum for bills and groceries. If grown children haven’t landed a job or are underemployed and don’t have money to chip in, there are other ways they can support the household, such as making a regular contribution to household chores and general maintenance.
Five Final Observations, Tips and Suggestions for Managing Your Yo-Yo Kids
1. Make Them Pay Their Own Way
Performing chores is an educational opportunity.
2. Help Them Understand the True Costs of Running a Household
Paying down a mortgage is only part of the challenge. By understanding the financial realities of home maintenance and day-to-day living expenses, they will come to appreciate the idea of budgeting.
3. Bailing Them Out Is a No-No
If a yo-yo kid is in debt, it should be his or her responsibility to deal with it. Don’t sacrifice your retirement to cover the debts of your children.
4. Set Expectations Around Employment
Your yo-yo child may protest that they are waiting for the ‘perfect’ job. Gently tell them there’s no such thing. Working at whatever they can get – while looking for more suitable employment – is the responsible thing to do.
5. Finally, Staying Out of the Work Force Is Dangerous
It’s, potentially, the start of a self-destructive cycle. Working at a job they don’t like will encourage them either a) to go back to school to get retrained or b) to keep the job hunt up.
A Solvable Problem
While boomerang or yo-yo kids can become a social and personal problem for pre-retirees and retirees, it’s by no means an insurmountable one. Firmness and expectation management are crucial. Looking after number one is not a sign of selfishness when it comes to handling the boomerang or yo-yo kid issue. Not only is it plain common sense, it’s a route to your own financial self-survival.