The number of traditional families made up of heterosexual married couples and children has been on a steady decline for more than 40 years as the definition of a family has broadened.
The majority of families today — about 80 percent — include single parent households, stepparents, adoptive parents, adult children living with parents, grandparents raising grandchildren, or same sex marriages with or without children.
But compared to traditional families, non-traditional ones are living with more financial stress, according to a survey by Allianz, a Minneapolis life insurance company. A staggering 57 percent say they are either “making ends meet,” “struggling financially,” or “poor,” a full 10 percentage points higher than their traditional family counterparts.
Moreover, 49 percent of non-traditional families say they live paycheck to paycheck, versus 41 percent of traditional families. And 25 percent of modern families — as the TV show featuring non-traditional families is called — are not saving any money at all.
“The three cohorts that are struggling the most are blended families, boomerang kid families and multi-generational families,” said Katie Libbe, Allianz Life vice president of consumer insights.
She said what often tips the balance for these families is the addition of an unplanned dependent, which often happens when an adult child moves back home or when two families merge.
Just 19.6 percent of U.S. households are made up of married heterosexual couples with children, a big shift from the 40.3 percent counted in 1970.
While traditional families tend to fare better financially, there is a thin line separating the two groups.
A traditional family can easily become non-traditional if an adult child experiences financial difficulty, has to move back home and parents begin depleting their retirement savings to support the child. Or a family takes in an elderly parent. Many traditional families experience a divorce and end up becoming blended families after remarrying.
“Now there are many more complex things that can happen, such as divorce, layoffs or the need to take care of elderly family members,” Ms. Libbe said.
The non-traditional families that are doing better than others, however, are same-sex couples.
“They tend to line up more with traditional families than any other cohort,” Ms. Libbe said. “Many of them use financial professionals. They get help, and I believe it’s because they don’t have access to things married couples have like joint filing of tax returns, joint ownership of property and Social Security benefits.”
“They tend to plan well ahead in advance and reach out to professionals for help. It pays off in making them more confident than most other modern families.”