By Janna Herron
June 16, 2025
When Antonio Lugo pursued his master’s degree in business administration in 1993, he moved back in with his mother and got what he called “the family plan rent” to help afford school.
His mother, Brunilda Lugo, was already caring for her elderly mother in her home, ultimately forcing her to retire early. While Brunilda, now 76, doesn’t regret helping her son “start out,” she has different thoughts on him someday returning the favor.
”I wouldn’t want him to go through what I went through,” she said. “Pay someone to take care of me and you can live your life.”
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Multigenerational living is now on the rise. Last year, 17% of home buyers purchased a home where multiple generations will live, according to the National Association of Realtors. That marked a record high going back to 2012.
But to make it work, families must consider the financial, logistical and emotional factors that come with living together. Otherwise, mismatched expectations could strain familial bonds.
”Unfortunately in a large part of the country, this is a forced development, but can be a positive one as long as you have healthy emotional relationships,” said Catherine Valega, a certified financial planner in Boston. “But it’s not without challenges.”
The biggest reasons behind multigenerational purchases were cost savings, needing an adult relative to move in, or children over 18 boomeranging back or never leaving home in the first place, according to the National Association of Realtors.
“Pooling incomes and leaning on each other financially make a lot of sense,” said Jessica Lautz, the association’s deputy chief economist.
One of Dave Demming Sr.’s older clients sold their home in Ohio and relocated to North Carolina to live with their adult daughter. The move was “driven by financials,” said Demming, a certified financial planner in Ohio. Their retirement savings weren’t enough if they stayed put.
A year in, the couple is “ecstatic,” he said, because they see family often and are saving money by sharing expenses.
That’s one of the keys to creating a successful multigenerational setup: having a frank conversation around finances.
For parents welcoming adult children back, both sides should discuss what is expected financially. Will the children pay for their food and part of the utilities? Will they pay rent, like Antonio Lugo did? And how long will the arrangement last?
“Some parents say they’re going to charge rent, but hold that money aside for the child,” said Valega. “And when they’re ready to move on, they’ve saved several thousand dollars.”
When it comes to aging parents, similar financial questions arise, especially if they have their own income from Social Security, a pension, or other retirement savings.
If a new home is purchased or an existing one renovated to accommodate the older parent, who pays for this or how is it split between the two parties?
Another big question: What happens when the aging parent needs more care? It’s important to know if elderly parents are self-funded, Valega said, so their care doesn’t become a “black hole” in the adult child’s financial plan.
The layout of the house is also a big factor. For aging loved ones, modifications may be needed, such as widening doorways for walkers or wheelchairs or installing safety bars in bathrooms.
Providing a separate living space for senior relatives is the ideal setup, but it is expensive to retrofit a basement, add to an existing home, or build an accessory dwelling unit on the property. Adult children may find themselves in their childhood bedrooms because it doesn’t make sense to renovate for a living arrangement that is typically temporary.
Don’t forget the small details of day-to-day living, either, Valega said. You should have ground rules, especially with your adult children. They aren’t guests, but rather a full household member.
“So if you walk into the kitchen and dishes need to go in the dishwasher, you put them in the dishwasher,” said Valega, whose own daughters have boomeranged back to the family home. Set up a monthly check-in to discuss any issues before conflicts arise.
Still, even the best intentions can fail.
Another of Demming’s clients, a divorced senior, bought a duplex several years ago, so he, his adult daughter and her husband could live together. The decision was more emotional than financial, he said, though the arrangement saved his client some money.
Logistically, it seemed prudent. The client, who had lived alone for some time, got a separate space in one half of the duplex. But as his daughter’s family grew with grandchildren, tensions escalated, Demming said.
“It changed the dynamics and he couldn’t stand it,” Demming said. “He ended up demanding a partial payment back of the money he put into the house, so he could buy a home.”
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