Multigenerational family

Multigenerational living is on the rise: what to consider before combining households

Everything old is new again…especially when it comes to multigenerational households.

That’s because in the U.S., several generations living under one roof was the norm throughout the 19th century. Then, in the 20th century, separate living for elderly parents accelerated through the 1980s. But since the 80s, Americans have been shifting back toward the historic trend, with a dramatic increase in multigenerational living recently happening in response to the pandemic.

In fact, Generations United found that more than 1 in 4 Americans live in a household with three or more generations, and nearly 6 in 10 say they started or are continuing to live with multiple generations because of the pandemic.

According to the United States Census Bureau, the official marker of a multigenerational household is three or more generations under one roof. However, many dual-generation households would also consider themselves as fitting the bill. For example, baby boomer empty nesters are combining households with their silent generation or greatest generation parents to save money and make caregiving easier.

So, are you considering taking the leap into multigenerational living? Let’s explore some financial considerations, thoughts on how to keep life harmonious, and ways families are physically adapting their properties to welcome new additions.

Financial considerations of multigenerational living

In many cases, multigenerational living can help all parties involved save money. For example, the sale of one party’s property could help pay off another party’s property and free everyone from a mortgage. However, these decisions require frank conversations, a lot of transparency and the involvement lawyers.

In addition, families entering a multigenerational living arrangement need to openly discuss how finances will work within the home. Who will contribute to the household income? Who will pay for property upkeep, utilities and groceries? If there’s childcare or eldercare being provided by family members, how will the value of that be factored into the equation? Decisions about who pays for what should be finalized before anyone starts packing.

How to harmoniously live among multiple generations

Merging generations and households can naturally produce some friction. Everyone has different habits and tendencies, and it’s important to consider if everyone can get along as roommates. Here are some questions to consider before joining households: How will common areas be shared? Will everyone eat together as a family? How will household chores be divvied up? What happens if someone has messy living habits? How can everyone’s personal space be respected?

Establishing house rules at the beginning of the living arrangement can help stop problems before they have a chance to develop. Then, checking in during regular family meetings can help identify and resolve simmering issues before they become big.

How families are adapting properties for multigenerational living

Many families are adapting their current properties to accommodate multigenerational households. From add-ons to renovations to accessory dwelling units (a second small dwelling on the same grounds or attached to a regular single-family house), here’s what some families are doing:

  • Building an apartment over a garage
  • Creating a basement apartment
  • Transforming a garage into a living space
  • Building a tiny house or cottage on a foundation in the backyard
  • Turning an outbuilding into a livable space
  • Reimagining and renovating a house to create a second living space
  • Setting up a mobile accessory dwelling unit (such as an RV)

Before you start knocking down walls or breaking ground, be sure to check your area’s regulations for permanent and mobile accessory dwelling units and home additions. You also may need to check with your homeowner’s association, if applicable. Going through all the proper channels helps ensure you don’t run into potential consequences down the road, such as penalties and fines.

Keep reading: A Primer for Living in a Multigenerational Household

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Bankers Life is proud to provide multigenerational planning to our customers. We understand the needs and concerns of each generation and are equipped with the right solutions to help families protect, grow and pass on wealth. Learn more about us here.