Is Multigenerational Living a Smart Financial Move for You and Your Family?

A growing number of families are embracing multigenerational living.

In 2024, this living arrangement—where grandparents, parents, and children reside under one roof—reached a 10-year high, according to a recent report from the National Association of Realtors.The report found that 17% of homes purchased were multigenerational.

So what’s driving this trend? Finances, at least in part.

More than one-third (36%) of homebuyers said their motivation for buying a multigenerational home was ‘cost savings’—up more than 20 percentage points from 15% in 2015.

As multigenerational living becomes more common, here’s how to figure out whether it’s right for you.

Multigenerational Living Has Many Benefits

For retirees, moving in with children can be a win-win scenario: if you’re close to retirement age or recently retired, sharing expenses with adult children can generate savings and help you preserve your retirement fund.

“Multigenerational living can be a powerful financial strategy for retirees—and for the entire household,” said Skyler Denny, certified financial planner (CFP) and founder of Legacy Financial Designs. “Sharing a home allows retirees to reduce major expenses like housing, utilities, groceries, and transportation.”

Beyond financial considerations, multigenerational living offers retirees valuable emotional support, caregiving, and stronger family connections.

Loneliness remains a widespread issue among older adults, with one-third of those ages 50 to 80 reporting feelings of isolation in 2024. Living with family can provide meaningful companionship that boost mental and emotional well-being.In the NAR report, 18% said they had bought their homes to spend more time with their aging parents.

“Retirees often experience a stronger sense of purpose, improved mental health, and less loneliness when they’re surrounded by loved ones. Daily interaction with grandchildren can be deeply fulfilling and even promote cognitive health,” said Denny.

And it can benefit those you live with too. If you have grandchildren, you may enjoy spending more time with them, and your adult children may find it helpful to rely on you for some of their childcare needs.

Deciding If Multigenerational Living Is Right for You

Before diving into the logistics, it’s important to first explore the reasons behind the decision to live together and determine whether it’s a good fit for everyone involved. Start the conversation from a place of mutual care, emphasizing the potential benefits for everyone—whether it’s saving money, offering support, or strengthening family bonds.

From there, you can discuss what it looks like in practical terms. With finances being one of the most important considerations, families should talk about how expenses will be shared.

“The key to making this arrangement work long-term is transparency about finances, expectations, and boundaries. Open conversations about who’s contributing what—and why—help reduce resentment and ensure everyone feels respected. When done right, multigenerational living becomes a sustainable way to share responsibilities and build wealth across generations,” said Denny.

Clear agreements upfront can also help prevent misunderstandings later.

“Formalizing the arrangement protects everyone involved and helps avoid misunderstandings down the road,” Denny said. “Depending on the situation, consider a written family living agreement outlining who pays for what, expectations for care, and how disputes will be resolved.”

Denny also recommends updating estate planning documents and, if needed, drafting rental or caregiver agreements to reflect the new living arrangement. Additionally, consulting a financial planner and an estate attorney ensures the the arrangement is documented.

Families should also establish ground rules early on to avoid misunderstandings, including how household decisions are made and how conflicts will be resolved.

“Create a shared household budget covering food, utilities, housing costs, and maintenance. Assign nonfinancial roles, too: caregiving, cooking, child care, or yardwork. [And] schedule regular family check-in meetings to reassess responsibilities as needs evolve. Everyone should feel respected and included, financially and emotionally,” Denny said.

The Bottom Line

Multigenerational living is becoming a more popular, especially as people search for ways to reduce costs.

For retirees, living with adult children can offer financial relief, emotional support, and a sense of connection. If planned carefully, this can be a fulfilling and sustainable arrangement for everyone involved.