Parents find themselves in a tough situation when their adult children haven’t left the nest yet.
In an extreme situation, Mark and Christina Rotondo, a New York couple, needed to take their adult son to court to get him to move out.
Nothing else worked.
While eviction notices are on the extreme side, many parents never truly feel settled until they feel their kids are doing OK.
A friend of mine, “Janie,” retired a few years ago from her job as a public school teacher.
Since she’d worked for the school district for a long time and had a master’s degree, her retirement income matched her salary. Yet, she still substitute teaches as many days as she can.
Why? She pays some of her adult children’s expenses, such as their medical insurance.
In other words, she is subsidizing her kids’ lives.
These “kids” are married with children.
In Janie’s case, she was able to retire, and her part-time income goes for her kids. But many people can’t retire because they haven’t saved, don’t have a pension, or had a financial setback.
Renting out that room in the basement could make or break their retirement. Subsidizing adult kids may mean severe financial hardship for the parents.
Here are some ways to help your adult children without torpedoing your financial plan:
Make sure they’re on a short-term lease with you at home
If your adult children need to move in for a while to help them get on their feet, set boundaries that work for everyone from the very beginning.
For example, let them know they can live with you for four months rent free, but you’ll need them to pay their share of the utilities and groceries.
If they can’t contribute financially, set up ways for them to help around the house depending on their skills.
They could cook dinner three nights a week, clean the house once a week, and work on special projects such as fixing the fence in the backyard.
Charge rent on a sliding scale
Let them know part of your retirement plan is to rent out the basement, but you’d be happy to give them the “friends and family rate.” This way, they know the rental income is important to you. For people who are late starters to retirement savings, renting out a room or the basement is a great way to bring in extra income.
Financial planner tip: Rent out your basement or room when your kids move out
When I was first married, my husband and I rented out a bedroom in our home to a medical student. We made a few extra dollars every month.
I’d like to say we made a friend, but we never saw him!
Since he was a young resident, he worked long hours and just needed a place to sleep and eat a quick breakfast. This arrangement worked out well for all of us.
With Airbnb and other rent-by-owner websites like VRBO, it’s easier than ever to find a short-term renter.
A site called SilverNesteven matches up empty nesters with people who are looking to share space on a more permanent basis.
A friend of mine in Salt Lake City rents out his basement on a weekly basis during the ski season.
There is a separate entrance, so his family’s privacy is protected, and he uses the funds to pay for family vacations every year. For the 2017-2018 ski season, he grossed $6,640.
Those extra dollars can come in handy.
If you want to boost your retirement savings or want extra income in retirement, rent out your basement!
As an added bonus, with no room available, the adult kids won’t be able to move back quite so easily.
Charge rent on a sliding scale
Let them know part of your retirement plan is to rent out the basement, but you’d be happy to give them the “friends and family rate.” This way, they know the rental income is important to you. For people who are late starters to retirement savings, renting out a room or the basement is a great way to bring in extra income.
Financial planner tip: Rent out your basement or room when your kids move out
When I was first married, my husband and I rented out a bedroom in our home to a medical student. We made a few extra dollars every month.
I’d like to say we made a friend, but we never saw him! Since he was a young resident, he worked long hours and just needed a place to sleep and eat a quick breakfast. This arrangement worked out well for all of us.
With Airbnb and other rent-by-owner websites like VRBO, it’s easier than ever to find a short-term renter. A site called SilverNes teven matches up empty nesters with people who are looking to share space on a more permanent basis.
A friend of mine in Salt Lake City rents out his basement on a weekly basis during the ski season.
There is a separate entrance, so his family’s privacy is protected, and he uses the funds to pay for family vacations every year. For the 2017-2018 ski season, he grossed $6,640.
Those extra dollars can come in handy.
If you want to boost your retirement savings or want extra income in retirement, rent out your basement! As an added bonus, with no room available, the adult kids won’t be able to move back quite so easily.
