For families with multiple generations under one roof, the pandemic has brought unique challenges

Oliver Rossi

When Kaitlin Stupka, 31, her husband and two children moved in with her parents in October 2019, the plan was to stay for six months while they built their dream house in the Dallas-Forth Worth area of Texas.

Then the coronavirus pandemic hit. Now, it's likely the length of their stay will triple, Stupka said.

Stupka lost her job as a billing manager at a private practice pain management clinic in March when the coronavirus pandemic prompted sweeping shutdowns across the U.S. At the same time, her husband, who works in sales, saw his commissions plummet.

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Stupka's unemployment benefits helped cover some expenses — until the additional $600 per week in federal payments authorized under the CARES Act ended. She's been looking for work for months with no luck, she said. Living with her parents has saved her family, she said.

"If we had a mortgage right now, we'd be in a homeless shelter," said Stupka.

In addition, her father is immunocompromised, and the family is the primary caregiver for Stupka's 95-year-old grandmother, who lives elsewhere. That's made every trip outside the house nerve-racking.

"I feel like we're having to put ourselves in these situations where we're compromised," said Stupka.

Multigenerational families on the rise

The coronavirus pandemic has brought economic hardship and pushed many relatives to live together. The share young adults living with their parents has jumped to the most since the Great Depression — in February, 47% of young adults aged 18 to 29 lived with their parents and, in July, that climbed to 52%, according to a September study from the Pew Research Center.  

There were already a record number of extended families living together in the U.S. before the pandemic hit. In 2016, roughly 64 million Americans — 1 in 5 people — lived in a multigenerational household, a Pew Research Center analysis of census data has found. A multigenerational household is defined as having two or more generations, or a family including grandparents and children younger than 25, according to Pew.

Aside from Covid-19, growing diversity in the U.S. has contributed to this trend, says Pew. Asian and Hispanic households are more likely to be multigenerational and those populations are growing faster than White ones.

It is in everyone's best interest to have a family sit-down to discuss how to adequately cover the additional monthly costs associated with the work-from-home environment.

James Guarino

managing director at Baker Newman Noyes

For many, living with extended family provides financial support. It's also been a challenge during the pandemic, especially for those cohabitating with high-risk individuals.

For parents who have adult children living with them, it's important to have a conversation about how extra people in the house impacts finances, said certified financial planner and CPA James Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts, who had two of his three adult children come back home for part of the pandemic.

While sometimes parents are happy to bear the costs of having kids at home, there is also an opportunity for families to work together to ease the burden, he said.

"It is in everyone's best interest to have a family sit-down to discuss how to adequately cover the additional monthly costs associated with the work-from-home environment," he said.

Sharing costs can beneficial to everyone's finances in a multigenerational family. For parents in retirement, having kids live with them could mean withdrawing less from savings, according to CFP Adam Wojtkowski, a financial advisor at Smith Salley & Associates in Walpole, Massachusetts.

For example, if kids can contribute to expenses, parents between 60 and 72 could consider either a Roth conversion or qualified distribution to reduce the amount they have in required minimum distributions at 72, particularly if they have large 401(k) plan or traditional individual retirement account balance, said Wojtkowski.

"If they can pay federal tax at 10% or 12% today, rather than a higher rate when their RMD starts, that might make sense to take a look at," he said, adding families should speak with a financial planner or CPA before making any changes.

Kids living with parents can also use the opportunity to save up, especially if they're paying less to live at home than they would on their own, according to Wojtkowski.

Cramped quarters

To be sure, the pandemic has thrown a curve ball even for families living together because of the financial benefit. One woman, who asked to remain anonymous because she is an undocumented immigrant from Peru, lives in south Florida with her husband, brother, mother and daughter in a two-bedroom, two-bathroom apartment.

The woman and her husband have lived with family for the last three years to help their daughter stay on campus during college. But this year, classes are online due to Covid-19, so the daughter moved home and is living in a makeshift room in what was the apartment's patio.

"It's very frustrating during this time, especially to see my daughter in discomfort," the woman said through a translator.

When you don't know you don't know, you just don't do anything.

Louis Barajas

COO and partner at MGO Wealth Advisors

The family's income has also taken a hit — the woman and her husband clean houses and lost half of their clients during the pandemic. They've taken as many precautions as they can to protect their elderly clients and the woman's mother, who is 86, from Covid-19, buying their own masks and gloves, maintaining social distance and only going out for work and to buy food.

The woman and her husband planned to move back into their own space when their daughter graduated college, but that's been put on hold until their income picks back up.

"Honestly, we will have to work even if we're sick because we don't have health insurance, we don't have paid sick days [and] we are very limited in what we do," the woman said.  

A village under one roof

Multigenerational families that are able to plan finances well have a unique opportunity to build wealth that can be passed on, according to CFP Louis Barajas, COO and partner at MGO Wealth Advisors in Irvine, California. This is especially top of mind for Barajas, who works predominantly with the Latino community, which has been underserved by the financial industry.

"The lack of education in the household stops them," he said. "When you don't know you don't know, you just don't do anything."

For his clients, Barajas focuses on establishing clear goals and the "why" behind them before working on a specific game plan down to the execution of saving money for retirement, a down payment on a house or college tuition.

Barajas, a member of CNBC's Financial Advisor Council, has personal experience with a multigenerational family — his in-laws have lived under one roof for years.

Diane Olivares, 56, moved in with her mother, Maria, about 15 years ago to help when her father was diagnosed with cancer. Around the same time, she also went through a divorce and brought two daughters with her to the house in Montebello, California.

After her father passed away, she didn't want to leave her mother alone. "We're always home with her and she loves it, she loves us being home," said Diane, "She does not know how to be by herself."

A few years later, her brother Jerry Olivares, 49, moved in after his own divorce with his two children, who spent some time at the house. Jerry and Diane work with Barajas at LAB Business Management.

From left: Jazmyn Cano-Casas, Diane Olivares, Maria Olivares, Justine Cano-Casas, her husband, Randy, Isaac Olivares, Jerry Olivares.

Justine Cano-Casas

When the pandemic hit, the family hunkered down to protect Maria, who is 81, and Justine Cano-Casas, 30, Diane's eldest daughter, who is nine months pregnant and lives in the house with her husband.

Now, only Diane and Jerry do errands outside the house, such as going to Costco to stock up on groceries. Justine only leaves for her doctor's appointments.

The family also modified the house to keep high-risk members of the family safe. Diane's youngest daughter, Jazmyn Cano-Casas, 27, works as a nurse, so the family added a door to her room that goes outside so she doesn't have to walk through the house after shifts at the hospital.

Living together has also had financial benefits. The family evenly splits utilities and food costs and they've been able to save on rent. Because he lived at home, Jerry was able to start and run his own restaurant and catering business for a few years and has also been able to spend more money on his two teenage children.

"That was a great thing," he said. "I didn't have to stress for money living at home."

Even though living together during the pandemic has meant spending a lot more time together, the family is glad to have company. Justine is excited to bring her baby home to a house with multiple generations of helpers.

"The baby is like the rainbow at the end of the storm 2020 has been," said Justine, who works at MGO Wealth Advisors. "Being together is easier.

"It takes a village to raise a child and, luckily, most of my village is under one roof."

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