Friday, April 02, 2010

Grandma's Moving In With You

Attention Generation X!  Clear out whatever spare room you may have been using for storage, video games, your meth lab, whatever.  Your parents - the Baby Boomers who didn't save for retirement - are moving in with you:

The multi-generational American family household is staging a comeback -- driven in part by the job losses and home foreclosures of recent years but more so by demographic changes that have been gathering steam for decades.


The Pew Research Center misses a couple of points.  Seniors aren't able to stretch their Social Security checks as far as they used to because the government's CPI numbers deliberately understate inflation.  Young men and women are marrying later because a single paycheck isn't enough to raise a family.  Aside from these minor things, the report tells us something very important about American society in the 21st Century.  Mobility and generational independence were temporary phenomena, abetted by cheap energy and several decades of indebtedness.  Family life in the 21st Century will increasingly resemble its precursor in the 19th Century. 

Can we tease some investment ideas out of these findings?  I'd be very reluctant to invest in retirement communities, especially those in remote or resort-like locales.  Boomers moving back with their kids won't be throwing down $500k plus annual homeowner association fees to retire to some gated geezerville with indoor water aerobics.  I'd also be reluctant to invest in businesses related to child care or elder care (except for specialized medical services, you know, hospices and the like).  Why pay for day care when Granny and Gramps are home all day with nowhere else to go?  And why pay for elder care when your teenagers are around?  It's not like your teens will have anywhere to go after school since you won't be able to afford cars or cell phones for them anymore.  The kids shouldn't worry about looking foolish with their peers if every teen on the block has to stay home on Friday to give Granny her meds. 

I'm free of both kids and debts.  Don't congratulate me just yet, as I have another three decades or so to figure out a way to sustain myself in my old age.