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Plan Well, Retire Well

Saving and investing your money
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Who Do You Live With? Why?


Do you live alone or with others? How has this changed for you over your life? In my life, who is under the rooftop has been a story of change: people moving in and out during life transitions.

I am not alone. Many people today live in households with adults from different generations (multigenerational). In fact, in 2016 a record 64 million people – 20% of the U.S. population – lived with multiple generations under one roof.

People choose to live with family members for a variety of reasons. For some families, it's a cultural expectation. For others, it's a way to help with:

  • raising children,
  • caring for aging parents,
  • or other ways of providing support.

Of course, for many it's economics; the big costs of housing (rent, mortgage, real estate taxes, etc.) tend to be fixed costs and dividing these costs among more adults lowers the per person cost.

While much is written about the increases recently seen in multigenerational households, it's not a new situation. In 1950, 21% of Americans lived in a multigenerational household. However, between 1940 and 1980, the share of individuals living in multigenerational homes fell from 25% to 12%. More elderly, unmarried women living alone drove much of this change. (I was surprised to learn this!) According to Wiemers et al. (2017), the expansion of Social Security and work-related retirement plans changed the share of elderly women living with their children from 60% to 20%.

However, we are seeing a shift in that trend. According to the Pew Research Center (January 31, 2018), it has become increasingly common for parents to live in their adult children's homes. In 1995, 7% of US households had an older parent living in their adult child's home; by 2017, this percentage increased to 14%.

While we now have many housing options for older adults such as assisted living and continuing care retirement communities, these are not inexpensive options. Families may find that having older family members live with their adult children to be beneficial both socially and financially.

On the flip side, we also see more young adults in multigenerational homes. In 2014, more 18-34 year olds were living with their parents than in other type of living arrangements (e.g. living alone or with a partner/roommates).

One of the big factors driving this is that young adults are postponing when they marry. In 1960, 62% of young adults were married or cohabiting and living in their own household; in 2014, only 32%.

Income level clearly has an impact too. In 1970, wages for men 18-34 years old peaked, and after that, we began to see the increasing trend of young men living with their parents. For more details see the Pew Research Center Report, "For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-Olds" (May 2016).

When I think back to different living arrangements in my life, I have experienced many scenarios. Some have been very short such as the summer between college and beginning a new job, while others have been longer but still transitional. I can't say what my living arrangements will look like in the future as I age. However, it helps me to know that there is no "norm" and to be reminded that while it can be challenging to live in a multigenerational household, it also has many benefits.



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