Have you heard about the term "Silver Squatters"?

This interesting concept came to my attention when a friend texted me about it after hearing it on the Today Show. So, naturally, I did what anyone would do—I Googled it to learn more.

When we hear "squatters," our minds typically jump to individuals taking over properties without paying rent. However, the term "Silver Squatters" refers to something quite different. It describes older adults, particularly those from Generation X—individuals born between 1965 and 1980—approaching retirement age without sufficient financial resources to support themselves fully during retirement. Consequently, they often rely on financial and housing support from family members.

Silver Squatters: the outcome of a complex situation

This phenomenon has started gaining attention due to the unique challenges facing Generation X. Many in this group have experienced economic downturns, the impact of the pandemic, and the disappearance of traditional pensions once provided to older generations. Alongside the ever-rising cost of living, these factors have left this generation in a difficult financial situation as they approach retirement.

What the data says:

One study by Prudential Financial found that nearly a quarter of 55-year-olds expect to need financial support from family in retirement—a percentage that's twice as high as for those aged 65 to 75. Additionally, 21% of Gen Xers anticipated requiring housing support. This demonstrates how significant and concerning these financial challenges have become.

Another notable issue facing this generation is their membership in the "sandwich generation." This group finds themselves supporting both aging parents and their own children, making it incredibly challenging to save adequately for retirement.

Alarmingly, a study revealed that 35% of 55-year-olds would struggle to assemble $400 in an emergency. That's a stark contrast to the 19% of those aged 65 and older who share this difficulty.

What is happening in Real Estate

To better understand the impact of this phenomenon, I spoke with some industry friends. A realtor friend, and previous guest of the podcast, Trisha Spurrier, has noticed an increase in multigenerational housing demand—people looking for homes with in-law suites or additional living spaces as families move parents in to live with them. Similarly, a friend who works at a home care agency is witnessing younger generations assisting their grandparents because they lack the financial means to do so independently.

From a senior living perspective, the rise of Silver Squatters could influence the demand for multigenerational housing and alternative senior living arrangements. Families might consider cohabitating to manage costs, similar to how families lived when I was growing up.

On a personal note, my own family provides an example of this modern phenomenon. Although I'm not a Gen Xer, my son currently lives with us to help care for my husband, who had four strokes nearly two years ago. This highlights how adult children can play a crucial role in supporting aging parents and managing household needs.

So, what can we do from a financial perspective? Well, first and foremost, it's never too early to start planning. Financial advisors emphasize the importance of proactive retirement planning, urging those approaching retirement to maximize contributions to retirement accounts and consider additional income streams. Open discussions between family members can also be key to planning for the future.

Ultimately, the development of Silver Squatters underlines the critical need for effective retirement planning for everyone. With the potential rise in family-centered living arrangements, adapting to financial challenges will require cooperation and strategic planning. Despite the challenges, there are ways to...