Personal Finance

This is the age when it becomes embarrassing to live with your parents

Key Points
  • There's now less stigma around living with your parents into your 20s, according to a new survey from TD Ameritrade.
  • Yet younger generations and parents agree: Age 28 is when it starts to get embarrassing.
  • Adult children and parents who live together should come up with a plan to make sure both sides make positive financial progress.
Photo by Gary Burchell via Getty Images

Moving back in with your parents after college is not a new concept. But around age 28, it starts to get old.

That's when the situation begins to get embarrassing, according to a new survey from TD Ameritrade.

That goes for all of the generations surveyed, including young millennials and even younger Gen Z respondents, as well as parents.

About one-third of Gen Z members said it would be embarrassing to live at home at age 30 and up, while 44% of millennials said the same. Meanwhile, 45% of parents agreed.

Overall, the stigma around children living at home into their 20s has decreased, according to TD Ameritrade's research.

"More and more young adults are looking to save money in some way," said Christine Russell, senior manager of retirement and annuities at TD Ameritrade. "Obviously, living with their parents is an easy way to do that."

One reason kids move back in with their parents is student debt, cited by 31% of millennials and 20% of Gen Zers. Other financial goals that have been delayed by college loans include buying a home, getting married, having children or saving for retirement.

Parents caught up in kids' college debt
Parents caught up in kids' college debt

Those with student loans said the situation was holding them back from other big financial goals. According to the survey, 47% of young millennials said their debt burden is keeping them from buying a home and 40% said it is preventing them from saving for retirement.

Many adult children who live at home are not paying rent, the survey found. Those who do pay to live at home are shelling out an average of about $500 per month.

And many are making it an extended stay. A majority of young millennials — 56% — stay for one to more than two years.

For both children and parents in this situation, it is important to set goals, Russell said.

Adult children may want to think of this as a "gap" year or two to get themselves on solid financial footing. This can enable them to knock down their debts and built their credit ratings.

"Use that time of living at home to start adulting, if you will," Russell said. "Think about these financial goals and have a plan and start making progress towards it."

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Contributing something to the household budget – whether it be rent or utility payments – should also be part of that.

Parents, in turn, can use that support to build their retirement savings.

"I would encourage parents to be financially transparent and involve the children in conversations about their own financial planning," Russell said.

The online poll, which was conducted by the Harris Poll between February and March, included 3,054 individuals ages 15 and up. Gen Z was defined as individuals between 15 and 21, while young millennials are between 22 and 28.