Ways to prepare for multigenerational living

Households containing three or more generations used to be called normal; now it’s known as multigenerational living—and it’s becoming increasingly prevalent in the United States. If you’re thinking about moving your elderly parents into your home, you’re not alone. According to an analysis of census data from 1971-2021, the number of people living in multigenerational family households quadrupled during that time period, reaching 59.7 million in March 20211.

Some people attribute this dynamic to a challenging economic environment; others think it signals a shift in cultural values. No matter why families are choosing to live under the same roof, the perks include stronger family bonds, shared household costs and even extended life expectancy.

Quality and longevity

When multiple generations of a family live together, everyone can benefit from improved health and happiness. Interacting with grandparents can boost children’s overall perception of aging, and maintaining strong family bonds at every age tends to decrease isolation and loneliness. And this connectedness may actually add years to your life. Psychologist Leslie Martin, of The Longevity Project2, found that people who interact more frequently with others tend to live longer.

Financial planning

Happiness and longevity aside, multigenerational living can also be a savvy financial move. Among the financial benefits are assistance with childcare for adults in the home with small children; financial help with everyday living expenses, utilities and household bills; and the ability to put more money into savings and retirement accounts to meet other goals.

Try to consult financial and legal advisors, if possible, before making this move to find out how a multigenerational living arrangement may impact your overall financial planning. Ask questions such as:

  • As a homeowner, does money I receive from family members for household bills and other expenses need to be reported (possibly as income or a gift) to the IRS?

  • How will I find the funds to make home modifications like room additions or ADA-compliance remodeling for elderly parents?


Before making the move, discuss financial expectations and responsibilities such as who will pay the rent or mortgage or who will buy groceries. And make sure to think about unexpected expenses that may arise in the future like medical costs.

Also, talk about how your family will handle expenses if a family member passes away. Think about the various sources of income, personal savings as well as medical insurance, Medicare or Medicaid benefits and life insurance. Life insurance can help ensure your family has some financial protection. Coverage can be used to help pay funeral and burial expenses or just provide loved ones with some extra financial cushion.

Multigenerational living, with proper planning and healthy communication, can be a positive and rewarding experience for everyone involved.

1Pew Research Center, Financial Issues Top the list of Reasons U.S. Adults Live in Multigenerational Homes, 2021

2The Longevity Project: Surprising Discoveries for Health and Long Life from the Landmark Eight-Decade Study by Howard S. Friedman and Leslie R. Martin

This article is provided by New York Life for informational purposes only. Neither New York Life, AARP, nor its affiliates provide tax, legal, financial, or accounting advice. Please consult your own professional for advice specific to your circumstances.