Multigenerational households are growing in the United States, according to a 2010 study by the Pew Foundation. Such households were common in the early twentieth century, then they declined, reaching a relative low point around 1980. They have been rising since then, showing a distinct uptick with the recent recession. In a culture that emphasizes independence, multigenerational households generally expand out of necessity, providing further evidence that times are tough. These trends will affect the retirements of millions of Americans.
Some Key Figures
The Pew study brings together data from the Census Bureau and from a Pew Research Center telephone survey. Some of its key findings are these:
- In 1970, there were 26 million (m) multigenerational households; in 2008, there were 49m—nearly double.
- As a percentage of the population, multigenerational families increased from 12.1% in 1980 to 16.1% in 2008.
- Twenty-one percent of persons age 85 and over are living in multigenerational households.
- The upward trend of the last few years is caused mostly by young adults moving in with parents—in 1980, just 11% of 25-34 year olds were in multigenerational households; by 2008, that number was 20%.
- The percentage of adults age 65 and older in multigenerational households is up to 20%, but it was at 17% in 1980 and 1990, meaning the increase is less dramatic than for the younger adults.
Of course conventional households are multigenerational, consisting of parents and minor children, but that is not what is meant by the term in the Pew study. Multigenerational households are defined to be all families in which there are two or more generations, except the conventional family of parents and their children under age 25. Parents living with children 25 and older, families with three or more generations in one household, and grandparents living with grandchildren are all included.
What is Happening Now
Americans between 35 and 54 seem to be providing most of the help to their adult children and to their parents. A recent Wall Street Journal article highlighted stories of people in the older end of the labor force who have lost their jobs, exhausted their savings, and now depend on relatives.
According to Pew, apparent vulnerability varies between gender and age. Among the 25-34 year olds in multigenerational families, 22% are men, and 18% are women; but in the age groups above 55, women outnumber men by about 5% to 7%, depending on the specific 10-year age group. Young men and older women are apparently most vulnerable in today’s economy.
Older, dependent adults present especially troublesome stories—unlike young adults, there is little time to rebuild income and assets. These older parents may be dependent or poor for decades to come, and this will surely affect their retirements and those of the family members supporting them.
Younger members of these new households are also at risk. Employers are eliminating pension plans, and Americans are advised to save and invest for their own retirements. All the models show that saving early in life is key, but a 30-year-old person can hardly save if he is not working.
A Look Ahead
Unfortunately, there is every reason to believe these trends are intensifying. The Pew data stop in 2008, but the United States has had lingering unemployment, many layoffs of older workers, and many news stories of the difficulties facing both young and old workers. Most people will stay independent as long as they can, hoping that a new job may be just around the corner. So when they move in with family, their resources are likely exhausted, their homes are likely lost, and their debt loads are probably substantial.
If and when the economic recovery strengthes, these problems will linger, probably implying a permanent decline in the living standards of millions.
Next week I will address attitudes and adjustments that can help make the best of multigenerational living.