Summary
This Issue Brief sheds light on the financial implications and financial wellbeing of those living in multigenerational households, specifically workers ages 25–65 living with their parents. It does this by analyzing asset ownership rates; asset values; and debt longitudinally categorized by race/ethnicity, likelihood of providing care, and whether the individuals were in a three-generation household, often referred to as the “sandwich generation.” The analysis was conducted using data from the Survey of Income and Program Participation (SIPP).
- Between 2020 and 2022, the percentage of workers residing with their parents remained stable at approximately 9 percent. Many of these individuals were young, unmarried, and had lower earnings; specifically, 50 percent were between the ages of 25 and 34, 63 percent had never married, and 40 percent were earning less than $30,000. Asian and Hispanic workers showed a higher concentration of younger individuals. In contrast, Black workers displayed a higher concentration of those with lower earnings and those who had never been married.
- The financial experience of those living with parents varied by racial group. Among workers who lived with their parents during the reference period, Asian workers had the highest percentage of individuals experiencing a decrease in unsecured debt from 2020–2022, at 53 percent, and the highest rates of bank account and retirement asset ownership. In contrast, Black workers had the highest percentage of those with outstanding unsecured debt in 2021 and 2022 and the lowest rates of bank account ownership across all three years. They also reported the lowest median financial assets and the smallest percentage experiencing an increase in financial assets at 46 percent.
- While a multigenerational living arrangement can be convenient, it is crucial to consider the caretaker role and how that can impact workers’ financial situations. Over one-third of workers who lived with their parents each year were found to be solely responsible for housing costs (rent/mortgage and utilities). This could indicate them taking the role of caretaker or at least the role of providing financial assistance to the parents. The analysis shows that although those responsible for housing costs while living with parents had higher retirement asset and bank account ownership rates than those who weren’t responsible for the housing costs, they were more likely to experience a decrease in their financial assets from 2020–2022, with 38 percent reporting a decrease in financial assets compared with 28 percent of those who weren’t responsible for housing costs.
- The analysis indicates that 33 percent of workers living with their parents also had children in the same household (“sandwich generation”). Hispanic workers exhibited the highest prevalence of sandwich-generation households at 41 percent. While individuals in sandwich-generation households tended to have greater retirement asset and bank account ownership, they were also more likely to experience a decrease in financial assets from 2020–2022, with 39 percent facing this situation compared with 29 percent of those in other living arrangements.
While multigenerational living arrangements may offer certain advantages for workers, they can also present significant financial challenges. Understanding the increasing occurrence of this phenomenon and the need to support more generations is a growing necessity in order to assist workers in this situation. By developing resources or benefits for these employees, such as elder care benefits, employers can better support the financial wellbeing of these workers, ensuring that the group with multi-generational care responsibilities is not left behind.