Over the last 10 years, it has become increasingly common for adult children to live at home. In some cases, issues like the rising cost of living and student debt lead young adults to a brief stint at home to save money. In other cases, more pressing situations, such as job loss, make it less of a choice. In the wake of the global pandemic, even more adult children are going home, and their unexpected stay is often a one-way ticket.

New York Life worked with Morning Consult to survey Americans who serve as caregivers for loved ones — specifically those helping young or adult children and aging relatives — to get a sense of how they are adjusting their finances and potentially impacting their own financial future to help their family.1

Even before COVID-19, “Sandwich Generation” parents – those who simultaneously care for children and aging parents – were feeling financial pressure.The pandemic has only exacerbated these pressures, with potential changes in household income forcing Sandwich Generation parents to reprioritize their daily budgets, savings, and retirement funds to navigate caregiving and everyday expenses.

Pandemic pressures

More and more often, parents are dealing with the added challenge of financially and emotionally supporting their adult offspring. Known as “Boomerang children,” young adults have long returned home during their struggle to achieve financial independence.3 However, nine percent of adults ages 18 to 29 said they moved back home due to the pandemic.4 The U.S. Census Bureau, Current Population Survey says that’s roughly 2.7 million U.S. adults.5

Younger adults are also most likely to be affected by pandemic-related job losses, which is contributing to this trend. And, as colleges navigated the closing of campus and more virtual approaches to the semester, many students have been taking courses from home rather than on campus.

Unexpected guests

Having unexpected long-term house guests or ‘roommates’ is having a significant effect on Sandwich Generation parents’ finances. Our survey found that 17 percent of parents are spending more money to support their children as a result of the pandemic. Fifty percent of respondents said they have made a sacrifice to their own financial security to care for someone. Seven in ten have paid for the costs of caring by paying out of their own budget; 27 percent have dipped into their rainy day fund. Another 27 percent have taken on more hours at work, while 11 percent have paid out of their own retirement savings.

As parents support their adult children through the current crisis, they need to find a way to do so that balances with their own financial needs, both now and in the future. A key component of this financial strategy is open communication between generations. Parents and adult children should discuss issues such as how long the children will be staying at home, to what extent parents are able to help, and how they can support each other through a pandemic without depleting needed retirement savings and other key assets.

Uncertain expectations

How long parents will need to provide support for their children is uncertain. Some of our survey findings indicate that parents are generally more pessimistic than their children. In fact, seven out of 10 respondents expect to be providing support for at least a year, and one in five for six years or more, while one in five don’t know or, more worryingly, aren’t sure how long they’ll need to provide support for. That said, about one in five children think their parents will have to support them financially for three or more years, which aligns with parental expectations.

It is not just parents who are suffering the hit to their finances; their adult children also want to get their financial strategies back on track. Both generations must navigate the dynamics of (unexpectedly) living together again – for an uncertain amount of time. Families must have honest conversations – not just about who gets the groceries, but about timelines and financial responsibilities.

Opportunity in a crisis

Being under the same roof presents an opportunity for every family member to understand their current financial state, what their long-term goals are, and how the current environment is impacting it.

“Depending on the length of time adult children stay with parents and how parents and their children decide to divide financial responsibility within these new living arrangements, the potential economic impact on parents could be significant,” said Jeff Beligotti, Vice President, Head of Long-Term Care Solutions, New York Life. “Setting clear expectations about shared financial responsibility is critical.”

 “Setting clear expectations about shared financial responsibility is critical.” -Jeff Beligotti, Vice President, Head of Long-Term Care Solutions

In complex financial situations, it often helps to tap into the knowledge and objectivity of professional help. Financial advisors not only have the expertise needed to help create a strategy, they also offer a third-party voice that can help smooth the conversation. They will aid you in devising a strategy that specifically address the steps your family needs to take to protect your financial stability, such as rebalancing your portfolio or re-evaluating your day-to-day budget.

With help from the experts, Sandwich Generation parents and their Boomerang children can navigate the financial and emotional challenges of the COVID-19 environment together – and can bounce back.


1 New York Life whitepaper: ‘The New Sandwich Generation: How COVID-19 is Changing Caregiving in the U.S.’

2 New York Life surveys find members of the sandwich generation facing even more pressure as a result of COVID-19.

3 Fry, Richard et al. “A majority of young adults in the U.S. live with their parents for the first time since the Great Depression”. Pew Research Center. Accessed 08 October 2020. https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/

4 Cohn, D’Vera. “About a fifth of U.S. adults moved due to COVID-19 or know someone who did”. Pew Research Center. Accessed 08 October 2020. https://www.pewresearch.org/fact-tank/2020/07/06/about-a-fifth-of-u-s-adults-moved-due-to-covid-19-or-know-someone-who-did/

5 Manhertz, Treh. “About a fifth of U.S. adults moved due to COVID-19 or know someone who did”. Zillow. Accessed 08 October 2020. https://www.zillow.com/research/coronavirus-adults-moving-home-27271/


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Media contact
Sara Sefcovic
New York Life Insurance Company
(212) 576-4499

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