How will your kids affect your retirement savings?

They'll ask for ponies, they'll hit cricket balls through windows and require new shoes as often as haircuts.

But the hidden cost of children may be their effects on your retirement savings.

How could kids hinder retirement savings? 

They’re called KIPPERS, but you won’t find them on any menu.

It stands for Kids in Parents Pockets Eroding Retirement Savings, and the phenomenon is caused by the numbers of 20-somethings still living with their parents.

McCrindle research states that almost a quarter (23%) of Australians aged 20-34 are still living at home. For those in Sydney and Melbourne, this percentage soars to 27%. The report suggests that most of these adults are living with their parents because it’s cheaper and easier than moving out of home.

While that’s certainly true, it does spring to mind the 2006 Hollywood film Failure to Launch, where 30-something Tripp refuses to move out of home. In the film, Tripp’s parents hire a love interest to lure him out of the nest so they can finally focus on their own lives.

Taking a break from work to care for children

Another hidden retirement impact of kids is in their infancy. Some parents’ superannuation fund falls short due to taking time off work to nurture the little ones.

MLC recently reported that this reason is now the number one factor in not having enough savings to retire on, ahead of unemployment and major health issues.

As women tend to be the ones who take more time off during this parental period, and since savings are tied to earning a wage, the system somewhat disadvantages those females, according to the Australian Human Rights Commission. A 2014 report from the Association of Superannuation Funds of Australia (ASFA) highlights how the average superannuation balances for women was $44,866 in 2011-12. For men, this figure was $82,615.

The ASFA currently suggests savings of $23,363 per year for a single person to live a modest lifestyle, which means many women may have to rely heavily on the age pension.

What can parents do?

Short of hiring a love interest to encourage your fledgling to fly the coop, parents with adult children living at home could consider charging for rent and bills in order to at least recoup their costs.

For parents who take time off work to raise the kids, there is an option for spouses to make contributions to one another’s retirement savings, which could help balance out the difference when one parent remains at work and the other stays at home.

Virgin Super Plus also comes with a ‘baby break’, where your Administration Fees are waived for up to 12 months while you’re on maternity or paternity leave.

When a parent returns to work, you may want to make a salary sacrifice, where you agree to top up your super savings by putting aside some of your wage. This could help make up for some of the lost time while you were off work.

Are you managing your money around your children?