Boomerang Kids Delaying Retirement

It’s estimated that about a third of baby boomers are providing financial support for their adult children or other family members. And it’s not just unemployed kids living in the basement. Many parents also fund their children’s vacations, cars, auto insurance and credit card debt. This trend is draining savings and often preventing boomers from retiring by age 65.

The “boomerang generation” that returns home in adulthood, is not due only to a lack of job growth since the recession. It is part of a larger trend among youth who are failing to start careers, buy their first home, get married and have children. This adds to the burden of high debt, reduced pensions and inadequate retirement savings facing many boomers.

A survey conducted by Environics Research for TD Canada Trust shows that the majority of the baby boomer generation has provided financial assistance to their grown children and about one in five said they would be prepared to put their own financial security at risk to help out.

Doing too much not only throws a wrench in retirement plans, it may make it more difficult for our kids to grown up and become responsible adults. The impact is felt in the larger economy as well when college graduates return home instead of starting off on their own, buying a house and spending money on furnishings. It is an important time in life to gain independence and learn to budget and become confident, capable adults.

Instead of a bail-out or assistance, parents of adult children might want to consider an offer of financial advise rather than cold, hard cash. There’s some truth to the saying that “there is no growth without struggle”.