Weak stock market performance is eating up Americans’ retirement savings, and John Graham believes this may signal the return of the three-generation household.
Graham, a professor in UC Irvine’s Paul Merage School of Business, is the author of Together Again: A Creative Guide to Successful Multigenerational Living. Graham co-wrote the book with his sister, Sharon Graham Niederhaus.
The nuclear family of parents and their children in one home may seem ideal to many Americans; it has been a standard for decades. But from a global perspective, it’s far from the norm. “Almost everywhere else, grandparents are close by the grandchildren, so extended family influence and interaction are much more important,” Graham says.
When Social Security was instituted in 1940, about 60 percent of elderly U.S. widows lived with their adult children. Fifty years later, that figure had dwindled to less than 20 percent.
“Social Security allowed Americans to afford to live separately,” Graham says. “The generations have been moving apart for 60 years. Now, with today’s financial problems, we’ve learned this system that isolates the older generation from their families can’t be sustained.
“The consequence of people losing retirement income – particularly baby boomers like me – is that we’re going to be living with our kids and getting back to the healthy unity of the three-generation household.”
Graham, known for his research on international negotiation and his findings on how people do business in more than 20 cultures worldwide, believes successful multigenerational households are built on negotiation.
“The key is to negotiate as equals for an exchange of services,” he says. “For example, if the grandparents agree to help take care of young children, then perhaps in five or 10 years, the children will help the grandparents.”
Graham says there are three large challenges to multigenerational living in America:
- Celebration of personal independence: “We like being independent minded, but the truth is human beings are naturally dependent on one another, particularly family members,” Graham says. “The concept of independence is so embedded in the American psyche that it almost does us a disservice – it makes people feel guilty when they ask to move in with their relatives.”
- Local government regulations: While typical regulations do not specifically forbid multigenerational living, sometimes they may preclude it. For example, a local law might require a homeowner to maintain car space in the garage because of street-parking shortages. This prevents any remodeling of the garage to accommodate a relative.
“California has tried to address these local regulations, with some success, but many more have to go away if we are to have more people living under one roof,” Graham says.
- Current housing stock: With minor remodeling, about 1/3 of the homes in the U.S. can accommodate some type of accessory, relative-friendly apartment – an area of the house with its own small kitchen and perhaps its own entrance. And, more homebuilders have embraced wheelchair accessibility in their designs. But a significant number of American homes still are ill-equipped to house larger families.
“Builders are trying to understand the needs of the baby boomer generation, but they’ve really been serving immediate customers and not thinking of the ones 20 years from now,” Graham says. “Hopefully, since the economy is causing a slowdown in home construction, builders are thinking about how to design households that will meet the needs of families in the long run.”