Many parents open their homes to adult children during periods of financial hardship or major life transitions. About 44% of parents with children ages 18 to 35 have had a child move back home after living independently, Thrivent’s fifth annual Boomerang Kids Survey found.Most parents willingly cover the extra grocery bills, higher utility costs, and general financial strain that a fuller household creates.Suze Orman, the bestselling personal finance author and host of the “Women & Money” podcast, has a warning for those families. One specific response to the financial pressure of a returning child, she argues, threatens far more than a monthly budget.The financial risk is not in welcoming an adult child home, but in the long-term financial decisions parents often make afterward.Nearly 20% of parents are willing to pause retirement contributionsThe financial sacrifices parents make to support adult children who return home extend far beyond cutting a few discretionary expenses from the household budget.About 43% of parents said they would cut personal spending to support an adult child living at home, the Thrivent survey reported.Close to one in five parents said they would go further, reducing their savings or retirement contributions to provide financial support, the survey found. That is the line Orman drew in a July 16 blog post on her personal site, separating acceptable trade-offs from dangerous ones.Trimming discretionary spending on nonessential purchases to help a child is reasonable for most families, she acknowledged in the post. Pulling back on retirement savings, however, crosses a critical financial boundary that no parent can afford to ignore, Orman warned.The compounding penalty that builds in silence over decadesOrman’s concern centers on a cost that most parents never calculate when they decide to reduce or pause their contributions. Every dollar that stops flowing into a retirement account eliminates the original deposit and all of the compounding growth that follows.To illustrate the scale of that penalty: a parent who pauses $500 in monthly 401(k) contributions for two years misses $12,000 in principal deposits. More Retirement:Vanguard drops playbook on retirement incomeVanguard warns workers losing thousands in 401(k)sFidelity’s wake-up call on Social Security, IRAs, and 401(k)sAssuming a 7% average annual return over the following 20 years, that $12,000 would have grown to roughly $46,000 in retirement wealth, based on standard compound-growth calculations.Workers aged 50 and older can contribute up to $32,500 to a 401(k) plan in 2026, and those aged 60 to 63 can contribute up to $35,750 under the SECURE 2.0 super catch-up rule, the Internal Revenue Service confirmed in its annual update.Under IRS rules, 401(k) contribution limits reset each year, and any unused portion cannot be carried forward to future tax years.
Skipping retirement contributions today may cost tens of thousands tomorrow, as missed compounding quietly erodes long-term wealth over decades.fizkes / Getty Images
Housing costs and job losses are pushing young adults back homeThe economic pressures behind the boomerang trend are significant enough that dismissing returning children as financially irresponsible misses the broader picture entirely. Housing affordability was the top factor cited by 45% of young adults who moved home, up sharply from 32% the prior year, Thrivent reported.About 30% of adults ages 27 to 35 who have not purchased a home said they never expect to afford one, the survey found. Job loss and reduced income ranked second, cited by 36% of respondents as a primary driver of the return home.Nearly half of all boomerang parents, about 47%, reported a measurable financial impact from having an adult child back in the household.Orman’s warning exposes a generational cost that reverses directionThe bigger risk Orman identified reaches well past the parent’s own retirement balance and lands squarely on the next generation. She argued that parents who underfund their retirement today are building a financial crisis that their children will inherit at the worst possible time.In her July 16, 2026, blog post, Orman described a scenario in which a parent retires 10 or 15 years from now and realizes their savings may not last, warning that the shortfall becomes a burden their adult children must eventually shoulder.Don’t you dare stop saving for retirement. That is the opposite of being a good parent.Ameriprise Parents & Finances study reinforces that concern, with 36% of parents in a survey of more than 3,000 American parents with children from newborn to age 30 worrying that supporting adult children could interfere with retirement plans.”Parents should be mindful of how the choices they’re making to support adult children today and into the future impact their own goals, particularly for retirement,” Deana Healy, vice president of financial planning and advice at Ameriprise, said in a statement.Parents, boomerang kids are not having the financial conversation that mattersOne of the most revealing findings in the Thrivent data is the communication gap between parents and the adult children living under their roof. About 76% of boomerang kids said their parents had never explained how having them home affects long-term financial planning, up from 60% in 2025.Gene Elder, a Thrivent financial consultant, noted that multigenerational living has evolved into a lasting feature of how American families manage money. “Boomerang living is not a blip; it’s becoming a lasting part of how families plan their money and keep moving toward their long-term financial goals,” Elder said.Orman’s core message is that parents can open their doors, trim their discretionary spending, and still offer meaningful support to a returning child. Pausing retirement contributions to help a child today, she warned, creates a growing financial bill that the next generation eventually pays.Related: Schwab names the No. 1 risk that could derail retirement