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College kid moving stuff back in with parents 

3 tips to protect your retirement from a boomerang kid

More and more parents are finding their empty nests bustling once again due to so-called “boomerang kids” — young adults who move back home after college. In fact, 26 percent of 18- to 34-year-olds shared a household with their parents in 2015 — that’s four percentage points higher than it was in 2007.* And while you might welcome seeing your children more often, it can be costly to continue supporting them through adulthood, putting your retirement in jeopardy. Try these tips to keep your retirement on track even when your adult child lives at home:

1. Set expectations early.

When your children were younger, you may have been responsible for all or most of their finances. Now that they’re adults, it’s time for that responsibility to shift to your children. Agree on what their obligations will be as soon as it’s clear they’ll be moving back in. For example, if your child isn’t earning much income, you might help pay for necessities such as food, as well as tools for finding a job. Any other expenses, such as those related to entertainment, would come out of his pocket. If your boomerang kid has no job, he could earn his stay by doing a fair share of household chores.

2. Create a timeline.

Why is your child living at home? Maybe she’s saving up enough money for a down payment on a house. Or maybe she’s trying to find a full-time job. Whatever the reason, get on the same page regarding her goal, steps she’ll take to reach it and a general deadline for when it will be achieved. You might set a rule that your child can stay at home as long as she’s continuing to work toward this goal.

3. Encourage budgeting and saving.

Show a before and after of how moving back home has affected your household bills. Ask your child to come up with ways to reduce these costs. While you both work at reducing costs, also encourage your kid to save money if it’s not already a habit. Right after college is a great time to start saving for retirement, so encourage your child to start an IRA or participate in his or her employer-sponsored plan, if possible.

By limiting the impact your boomerang kid has on your finances, you can continue saving for your retirement as planned. And by setting her on the path to financial independence and smart financial decisions, your child will be able to start saving for her own retirement. For advice and assistance with retirement funds, schedule a consultation with an Osaic Institutions investment professional located at Macatawa Bank. Learn more about our investment services**.

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* Source: Pew Research Center.
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