For reasons such as student debt or going through a career transition, your adult children might move back home later in life. "Boomerang kids" living at the family home for a longer period of time can help you tackle debt faster, help you set a good financial foundation for the rest of your life, and accelerate your transition to retirement.
As well as paying rent, your adult children moving home can help you reach your financial goals because they force you to revisit your budget. The exercise of reassessing your spending and savings habits can uncover opportunities to cut expenses. But, as Mike Hennessy, CFA, CFP®, said, “Ideally, those approaching the end of their working lives would be financially independent and not reliant on children to start the transition into retirement." As Forbes notes, as tempting as it might be to think this way, boomerang kids are not boarders — they’re your offspring. Training shouldn’t mimic the teacher-student model of their youth; you should be a team.
This time period could also be a good opportunity for discussing difficult topics with your adult children, such as legacy planning or estate planning. “A more important twist on this question is how to discuss, openly, family finances and the legacy or estate goals of the parents," said Mike Hennessy, founder and CEO of financial advisory firm Harbor Crest Wealth Advisors in Fort Lauderdale, Florida. "This is a tough conversation to have, but much better than foisting it upon your teary-eyed children at the will reading."
Read more in the January 2020 Forbes article "How Can Boomerang Kids Help You Retire Faster?" here.
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