FEDweek

Preparing for a Mixed Generation Household

It’s been well documented that the millennial generation has boomerang tendencies—that is, to move back home as a young adult rather than establishing their own residence right away upon passing a life event such as college graduation or completion of military service.

A recent study from the Pew Research Center found that for the first time in at least 130 years—dating to the first Grover Cleveland administration, that is—those in the 18-34 age range are more likely to be living in their parents’ home than to be living with a spouse or partner in their own household.

Specifically, 32.1 percent of those in that age range are living in their parents’ home—that’s up from the 20 percent of 1960, incidentally—31.6 percent were married or living with one or more other persons in a separate household, 14 percent were living alone or as a single parent, and 22 percent had other living arrangements, including for example college housing.

“A variety of factors contribute to the long-run increase in the share of young adults living with their parents. The first is the postponement of, if not retreat from, marriage. The median age of first marriage has risen steadily for decades. In addition, a growing share of young adults may be eschewing marriage altogether,” it said.

“In addition, trends in both employment status and wages have likely contributed to the growing share of young adults who are living in the home of their parent(s), and this is especially true of young men. Employed young men are much less likely to live at home than young men without a job, and employment among young men has fallen significantly in recent decades,” it added.

In other words, not only is your adult child more likely to be living with you, it is more likely that the child will be bringing in little to no money.

As a parent, you might find yourself taking on costs you hadn’t planned on, just as you are approaching or starting retirement. Depending on your financial status, it could mean continuing to work longer, taking part-time or even full-time work as a federal retiree, and cutting back on discretionary expenses in retirement such as travel and entertainment.

Your federal employee benefits package will help, but only to an extent, and it’s important that you understand what it will and won’t do.

Probably most important, you can carry a child on your FEHB family (or self plus one) enrollment until the child turns 26. After that, coverage can be extended for up to three years, but at a much higher cost—that cost would be charged to your offspring as the enrollee but it may be that you’d end up paying for it..

Coverage under the FEDVIP vision-dental program continues only until age 22, and comes with several other restrictions even before that age including that the child be a dependent—probably not a concern for a child living with you. There is no extension of coverage option.

What about if you die? A survivor annuity to a child comes with several important cutoff dates. It will continue only until the child turns 18 unless:

If a full-time student, the child’s annuity may continue until 22, but will end if the child marries; dies; ceases to be a student; transfers to a non-recognized school; begins attending school less than full-time; fails to submit proof, upon request, that he/she is attending school full-time; or enters military service or a government service academy.
If the child has a disability making him or her incapable of self-support and that began before age 18, the annuity will continue lifetime (except if he/she marries, recovers from the disability, or becomes capable of self-support).

In several other programs that have death/survivor benefits, your child’s age and living arrangements don’t matter. That is, you can designate as your FEGLI life insurance beneficiary anyone you choose regardless of living situations (except in the rare case where the insurance was “assigned” to one or more beneficiaries, typically done through a divorce order).

 

Similarly, you can designate beneficiaries for your TSP account regardless of living situations, again unless a court order requires a certain designation.

 

So, Uncle Sam will help only a little. The main responsibility to provide for your children until they provide for themselves will be where it always has been: on you, Mom, and on you, Dad.