What Is Kids in Parents' Pockets Eroding Retirement Savings (KIPPERS)?
Let me explain to you what KIPPERS means—it's a slang term for adult children who keep living at home with their parents even after they've finished school and hit working age. As a parent, you're dealing with your own financial management and retirement planning, but now you've got the extra burden of housing and feeding these grown kids.
Key Insights on KIPPERS
You might hear KIPPERS called boomerang children, and that's spot on because they come back home after venturing out. Sure, you as a parent might enjoy having them around, but it hits your wallet hard with the costs of keeping them housed and fed. This setup can push back your major life choices, like downsizing your home, moving to a warmer spot, or even retiring when you planned. To handle this, you need to guide your KIPPERS toward independence—set some house rules, start charging them rent, and help them tackle their costs and debts.
Understanding KIPPERS in Depth
From what studies tell us, most parents actually find it rewarding to have their adult kids at home; it builds stronger bonds now that everyone's grown up. That extra time together often strengthens family ties. But here's the reality: it means you're spending more and saving less as retirement looms. Think about the added groceries for more people, sticking with a bigger house instead of downsizing, maybe even covering an extra car or pocket money. In some cases, you might end up working years longer just to support them. Compare that to a dual-income couple without kids at home—they've got more disposable income and find it easier to save for retirement. Those folks are often called DINKs, for Dual Income No Kids.
Millennials Staying Put
A 2016 Pew Research study showed that about one-third of 18- to 34-year-olds were living with at least one parent, a jump from 20% back in 1960. For the first time in over a century, living with parents became the top arrangement for young adults, beating out marriage, living alone, or rooming with others. By 2020, Pew found 52% of young adults in the U.S. were with their parents, spiked by the COVID-19 pandemic, though it was already at 47% before that. If you're a parent trying to save for retirement and cut costs, consider these approaches: don't let them freeload—set financial goals, talk about household expenses, and make them cover their share, even if it's gradual. Discuss when they'll move out and teach them about real living costs. Push them to build their own credit for future independence, and yes, think about charging rent.
Practical Tips for Parents Dealing with KIPPERS
- Don't allow freeloading—ensure your adult children take financial responsibility by setting goals, discussing costs, and assigning their share.
- Talk about timelines for moving out and educate them on living expenses.
- Encourage building their own credit to qualify for independent housing.
- Consider charging rent to promote accountability.
Why Adult Children Stay Home
Several factors lead to adult kids sticking with their parents. Millennials got slammed by the 2008 financial crisis and then the COVID-19 pandemic, leading to layoffs and lost chances to save. Many jobs available to young people just don't pay enough for solo living. Add in massive student debt levels in the U.S., and it makes economic sense to stay home, especially in high-rent cities like New York where costs have soared over the past two decades.
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