Dear Liz: I didn’t think your advice was very good to the parent who asked about retirement planning for a 25-year-old son who was living at home. You got on your high horse about how the parent should charge him rent because he has to learn responsibility sometime. I took the opposite approach with my kids and told them they were welcome to stay with me as long as they liked, provided they were saving money for a down payment on a house. I also advised them to put 20% of their incomes into retirement accounts because it’s important to start saving when you’re young and not saddled with expenses. Once they saved up their down payments, they moved out and bought their own houses. It really didn’t cost me anything to have them live with me and I got to spend more time with them, which is important too. Too many other old folks complain that their grown kids never visit, but I wonder whether they ever did any favors for their kids when they were younger.
A: A parent’s freehandedness about money doesn’t necessarily ensure gratitude, but your approach is certainly reasonable. You set clear financial terms for your adult children, and they rose to the occasion. Yet another approach might be charging rent,Â thenÂ returning the payments as a gift toward the child’s down payment on a first home.
What you don’t want to have is an adult child who’s not paying rent, not saving for the future and spending his money on whatever he pleases. That kind of prolonged adolescence does no one good.