Staying in the nest has recently become the most common living arrangement for young adults.
According to Pew research, the 32.1% of 18- to 34-year-olds living in a parent’s home now just edges out the 31.6% who have the second most common living arrangement — living as a married partner or co-habitant in one’s own household.
Meanwhile, separate research shows that 29% of the young adults in that same age group are not saving any money month to month.
Living at home as a young adult. Not saving. That’s a bad, bad combo.
You could collect a stiff rent, but that defeats the purpose of coming back to the nest in the first place.
So, here’s a clever arrangement to consider: make your sweet rent deal be contingent on proof of retirement contributions. That means your young adult living at home has to maximize any 401(k) match opportunity at work and max out an IRA to secure your free (or reduced) room and board.
An alternative deal to consider depending on circumstances: require a significant monthly payment toward reducing credit card or student loan debt. Once the debt is paid off, you can switch over to the retirement contribution rule.
The bottom line: If your young adult kids are staying in the nest rent-free now, they better darn well be building up a nest egg for later.
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