Tough economic times send middle-aged kids back home

Jo Ann Bauer, 52, has moved back in with her parents, Bill and Shirley Smith.

MILWAUKEE - After being laid off from her job as an events planner at an upscale resort, Jo Ann Bauer struggled financially. She worked at several lower-paying jobs, relocated, and even declared bankruptcy.

Then in December, she accepted her parents' invitation to move into their home - at age 52.

Her daughter, now 12, moved in with her ex-husband near her hometown.

"I'm back living in the bedroom that I grew up in," Ms. Bauer said.

Taking shelter with parents isn't uncommon for people in their 20s, especially when the job market is poor.

But with a slumping economy and a credit crunch, some are moving back home later in life.

Said Kim Foss Erickson, a financial planner in Roseville, Calif., "This is not like, 'OK, my son just graduated from college and needs to move back in.' These are 40 and 50-year-old children of my clients that they're helping out."

Parents "jeopardize their financial freedom by continuing to subsidize their children," said Karin Maloney Stifler, a financial planner in Hudson, Ohio, and a board member of the Financial Planning Association. "We have a hard time saying no as a culture to our children, and they keep asking for more."

Ms. Bauer's parents, Bill and Shirley Smith, who are in their early 80s, won't take rent money or let her help much with groceries.

She's trying to save several hundred dollars a month for a house while working as a meetings coordinator.

Ms. Bauer would prefer to live on her own, but without her parents' help, she said, she would "probably be renting again and trying to stick minimal money in the bank."

Some of Ms. Erickson's clients are giving as much as $50,000 at a time to their kids, many of whom have overextended themselves with big houses or lavish lifestyles.

And the sliding economy might threaten their jobs.

A new survey by the retiree-advocacy group AARP found that one-fourth of Generation Xers, those 28 to 39 years old, receive financial help from family and friends.

The online survey of nearly 1,800 people ages 19 to 39 also found 57 percent believed they were "financially independent." But in a separate question, 33 percent said they received financial support from family and friends.

"I almost have to act like a financial therapist, if you will," Ms. Erickson said.

"•'Here is the line I'm drawing for you. That's fine. You can do up to this point, but at this point, now you're starting to erode your own wealth.'•"