What is multigenerational living? Simply put, it’s the term used to describe several generations of the same family living together under the same roof. This can often mean that grandma and grandpa have moved in with mom, dad, and the kids.

Choosing to merge generations under one roof reflects a number of changes, some cultural and some financial. Millennials have led the movement toward multigenerational households, with the Census finding about one in three people between the ages of 18 to 34 lived with their parents in 2015. While some adults move home to save money –such as the case of millennials, many of whom are saddled with student loans – others are drawn by benefits that reach far beyond the financial.

Outside the US, multigenerational living is commonplace. According to the United Nations, in Africa, Asia and Latin America and the Caribbean, it is common for aging parents 65 and over to live with their children. In the United States, until recently, most individuals 65 and over lived only with their spouse. 

A 2018 article on pewresearch.org states that, based on census data, a record 64 million people, or 20% of the U.S. population, lived with multiple generations under one roof in 2016. 

Let’s explore the advantages and challenges of multigenerational living, so you can determine if it is the right choice for you…

Advantages of Multigenerational Living

Saving money: Households with two or more adult generations are economical in many ways. When shared by more adults, mortgage payments or rent are lower per person than if they live apart. Other household expenses can also be shared, including utilities, food, maintenance costs, decorating costs, property taxes, homeowners’ insurance, and homeowners’ association fees. Sharing expenses gives young adults the opportunity to build savings or pay down debt.  Living with their families temporarily gives young adults time to reduce debt, improve their credit and save for a down payment.

Easier home financing: Having more adults with financial assets and incomes will increase the chances of having a purchase mortgage or refinancing approved. However, lenders will use the lowest credit score when underwriting the mortgage. Before applying, be sure everyone’s credit is in good shape.

Help with child care: Having additional adults at home, particularly grandparents, helps parents with young children. Grandparents help grandchildren survive their parents’ divorce by giving grandchildren undivided attention and helping when single parents are overwhelmed.

Strengthen family bonds: When three generations live together, for example, family bonds may be strengthened. When grandparents are involved in their lives, children have fewer behavioral and emotional problems. Grandparents can be critically important in the lives of children with divorced parents. Living with their children and grandchildren relieves grandparent’s loneliness and enriches their daily lives.

Sharing home equity: The longer you make mortgage payments, the more equity you gain. Equity is the difference between a home’s value and what is owed to the lender. Refinancing or selling allows access to that equity. All household members who make mortgage payments should have a written agreement with the borrower who is listed on the title and mortgage to share in a prorated amount of the equity at the time the house is sold or refinanced.

Live Longer: A recent study found that healthy members of multigenerational families tend to have lower premature mortality rates and are likely to live longer.  One reason may be because, in a multigenerational household, there are more adults to provide emotional support for each other.  Family support encourages feelings of wellness and stability for each person.

Shared household chores:  Splitting up household chores among adults and older children can result In less burden and stress. For example, grandparents can pick up children from school and babysit when the parents are out. Parents can use their computer skills to pay bills and keep the family budget. Children can be responsible for cleaning and helping with outdoor tasks like mowing the lawn, raking leaves, and shoveling snow.

Possible tax advantage home interest deduction. All who are listed on the deed/mortgage, provided they paid interest on a mortgage for the home, can deduct the amount of interest they paid. See IRS Publication 936, Home Mortgage Interest Deduction for more information.

Improved security: Grandparents may feel more secure living with family, and their presence ensures that there will be someone at home during the day when many break-ins or other crimes against empty homes, can occur.

Disadvantages of Multigenerational Living

Less privacy: With more people living together, each will have less personal space than if they lived separately. Living with others may be more difficult for grandparents and young adults who are accustomed to living alone. The transition can be eased by allocating private space for each person where they can retreat when they need to and simple rules, like knocking on bedroom doors before entering.

More noise: Adults who are unaccustomed to being around children may need some adjustment time. Household rules can limit loud play by place and time.

More housework: More people means more dishes to wash, floors to clean more frequently and larger laundry loads. House rules may include putting toys away, cleaning up after cooking, which means more household cleaning and maintenance. Household chores might be rotated for jobs like bathrooms, kitchens, and heavily used family spaces. Some of this may be eliminated when the aging parents have their own living space separate from the rest of the family. 

Family tensions: Relationships among friends and family can fester when living together. Potential friction should be considered and addressed before finalizing the move-in plan. Disagreements are bound to occur between friends and family members in a multigenerational household. Common issues that can cause tensions include financial disagreements, parenting differences, and household responsibilities. Rules and procedures for addressing problems like these should be discussed and agreed to before they become problems.

Upgrades and remodeling: Even a new house will require attention after a few years. A new baby or new resident might require renovation or adding new space. This includes, but isn’t limited to, separate living space (like an “in-law” apartment, or finished basement). The costs may be able to be shared between the family members in the home and those moving in.

Home modifications to accommodate disabilities: If parents of aging parents or a disabled child haven’t planned for the costs of retrofitting a home for walk-in tubs, stair lifts, and other needs, the costs could be quite extensive. If the money isn’t readily available, financing options may need to be explored, like a second mortgage, which is additional monthly expenses.

Summary

For seniors contemplating their retirement options, the opportunity to join their family in a multigenerational household can be a welcome option. They can save money, live more comfortably and enjoy their children and grandchildren as they age. Young adults might find rejoining their family to be a temporary solution that allows them to save money as they get started in their careers. Multigenerational living may be the first choice for adult singles, younger parents, and grandparents, especially those with an ethnic tradition of two, three, or even four generations living together.

The economics of modern real estate markets make multigenerational households an attractive option for families who have not considered them. In today’s markets, families that can afford a larger home, including one with a separate living space for the aging family members. With today’s uncertain climate, we may find multigenerational living quickly becoming the new normal as we navigate the ever-changing times both during and post pandemic.

If you would like to discuss your unique family situation, give us a call or send us an email. We are happy to have a no-cost, no-obligation conversation to help you make sense of what can be an overwhelming, and stressful time as parents age and their needs change. You can call (678) 494-8129 or email info@SilverCompanionsGA.com, and we’ll be happy to schedule time to talk.