Many children grow up and leave home, but some families find themselves living together under one roof again later in life. According to the Pew Research Center, households with three or more generations – for example, a grandparent, an adult child and a grandchild of any age – housed 28.4 million people in 2016.
Two-thirds (67 percent) of North American homeowners between ages 55 and 75 surveyed by Home Instead, Inc., franchisor of the Home Instead Senior Care® network, believe that loneliness or isolation impacts their decision in some way on where to live while aging.
Two considerations come to mind when determining whether families should live under one roof, according to Dan Bawden, founder of the national Certified Aging in Place Specialists (CAPS) program for the National Association of Home Builders:
Make sure your family gets along well, Bawden noted. “You don’t want to be dealing with poisonous personalities.” Even if personalities mesh, you will want to make sure everyone in the family has their own space for privacy. “The best set-up is separate quarters. Another option is an attached or detached apartment off the back of the house, preferably on ground level. One situation I advised on is an 85-year-old widow who was living in a 2,800 square-foot home. The adult child is married with three children, and while Mom wanted them to move into her home, she did not anticipate the chaos of three small children. In that case, we added an apartment on the back of the home that has a door that closes off the house. She can be alone or engage with family.” Building costs will vary by geography.
No budget to remodel or add on? Look for ways to partition off the house, even if it is simply to create private space in the bedroom.
The second consideration is household finances. “Make sure there is enough income between family members so all bills can be paid,” noted Home Instead Senior Care Gerontologist and Caregiver Advocate Lakelyn Hogan. “You must ensure that the needs of mom and dad moving back in or adult children moving in can be taken care of in terms of food and shelter.”
See a financial planner about the best way to set up a budget. Some experts advocate maintaining separate bank accounts, much like you would if you were living with a roommate. For example, write two checks to the mortgage company or alternate paying the mortgage each month. The same for living expenses. Consider creating a common fund for household costs.
Considering your budget
Balancing the financial affairs of a multigenerational household should be approached in much the same way as a college roommate arrangement. That’s the advice of Adriane Berg, author, CEO of the boomer consulting company Generation Bold, and a founder of the National Academy of Elder Law Attorneys. She advises writing two checks to the mortgage company or taking turns paying the mortgage each month.
The same is true of paying for living expenses; consider creating a common fund.
Maintaining separate bank accounts is preferable if your senior loved one is of sound mind, according to Berg. “Seniors who stay in control of their finances thrive,” she says. “Taking care of our own money is something we all want to try to do for as long as possible.”
Berg outlines some financial advantages and disadvantages of sharing a home with your senior loved one:
The financial advantages
Many expenses, such as heating and water, don’t increase significantly when you move a loved one into your home.
You can now buy many food staples in bulk, which can mean added savings.
If grandpa and grandma are willing and in good health they could help care for your young children.
You may also qualify for a dependency deduction for your older loved ones if they’re living with you.
What’s more, the profit from the sale of a senior’s home is no longer a dead asset. It can be invested in safe income such as a Certificate of Deposit.
The financial disadvantages
While adult children can be impacted by tax issues, so can a senior — in a negative way. If a senior sold their home, they could lose a homeowner’s tax deduction.
Capital gains issues should factor into your financial equation as well. Be sure to see a tax adviser before you make a move.
An ill or frail older adult will need care. That can be a disruption of a household as well as loss of work income. You must factor that into your budget.
While money isn’t the primary consideration in deciding whether your loved one should live independently or with you, it’s important to understand both the financial impact and the options available to you in this situation.
Julie Ann Soukoulis is the owner of Home Instead Senior care office in Rohnert Park, mother of two and passionate about healthy living at all ages. Having cared for her own two parents, she understands your struggles and aims, through her website, www.homeinstead.com/sonoma to educate and encourage seniors & caregivers. Have a caregiving or aging concern? She’d love to hear from you at 586-1516 anytime