You have likely heard about some of the most common roadblocks to a successful retirement -- inflation, longevity, income taxes, and long term care expenses. But have you heard about the newest addition to the list? The newest threat to successful retirement is KIPPERS -- Kids Invading Parental Pockets and Eroding Retirement Savings. While not mainstream just yet, Tom Sedoric, a financial advisor in Portsmouth, N.H. has apparently coined the acronym KIPPERS in his Financial Planning magazine article titled “Full-Nest Syndrome”.
The article refers to data that suggests, “A stunning 85% of this year's college graduates were planning to head back to live with mom and dad for at least a while. A study in 2010 by researchers at Columbia University using the U.S. Current Population Survey found that 52.8% of 18- to 24-year-olds were living at home, up from 47.3% in 1970.”
Is there a cure for KIPPERS? The first step is to acknowledge that this might just have an affect on your own retirement plans. Financial support of a child, right or wrong, may prevent those still working from saving as much as they otherwise could. Or, worse yet, force a retired parent to increase their investment withdrawals to higher levels.
The best advice: Talk with your little KIPPER and set financial boundaries as soon as they step foot into the childhood bedroom. Help them develop sound financial habits so that their financial dependence does not threaten your retirement success.