Research highlights the prevalence of multigenerational living arrangements
“Encanto,” which means “charm” in Spanish, is Disney's 60th animated feature film. It tells the story of the Madrigals, a multigenerational family who live in the mountains of Colombia. If you're a child of immigrants or an immigrant yourself, you know that living with extended family isn't out of the ordinary.
Tucked in the moving story and magical realism typical of most Disney movies is a window into the complex relationships, strong ties, and unconditional love that defines many multigenerational families. And it paints a picture of how these arrangements may operate, even outside of the fictional “Encanto” universe.
What are multigenerational households?
Multigenerational households are defined as including two or more adult generations (with adults mainly ages 25 or older) or a “skipped generation,” which consists of grandparents and their grandchildren younger than 25.
This cultural practice can be influenced by factors such as close family ties, respect for elders, and economic considerations. Here are a few statistics that reflect the prevalence of multigenerational living among Hispanics:
- According to a 2016 report by the Pew Research Center, 27% of Hispanics in the U.S live in multigenerational households, compared to 19% of the total U.S. population.1 The report also indicates this trend has been increasing among Hispanics in recent years.
- The U.S Census Bureau’s 2019 America Community Survey data echoes those findings, showing that 23% of Hispanic households in the U.S were multigenerational households, compared to 15.6% for the overall population.2
- Generation United, an organization focused on intergenerational collaboration, reports that 34% of Hispanic children in the U.S live in multigenerational households, indicating a higher prevalence compared to other racial or ethnic groups.3
Working with multigenerational households as a financial professional
For financial professionals, there may be a considerable opportunity in engaging with clients who live in multigenerational households, especially because intergenerational support is a significant aspect of Hispanic culture. For example, financial professionals may go the extra mile and identify potential opportunities to sell a product that may be a good fit for a member of the household, such as a fixed index annuity or an annuity product that offers long-term care benefits.
It is worth mentioning the income of Hispanic multigenerational households can vary significantly based on factors such as location, education levels, occupation, and overall economic circumstances. It’s also important to note that there is no single income figure that can represent all Hispanic multigenerational households, as they encompass a diverse range of socioeconomic background and experience.
According to the Generation United study, multigenerational households cite many benefits of living together, including:4
- Enhanced bonds or relationships among family members (79%)
- Making it easier to provide for the care needs of one or more family members (79%)
- Improved finances for at least one family member (76%)
- Positive impacts on personal mental and/or physical health (76%)
- • Making it possible for at least one family member to continue school or enroll in job training (71%)
Understanding the financial goals, cultural dynamics, and lived experiences of Hispanic investors, as well as the reasons why many are hesitant to work with financial professionals, may be the key to best working with this growing demographic.