I recently met a guy, age 40, still living with his parents. In the gossip circuit this was considered inappropriate. But is it really? And if so, when does sharing a household with your grownup offspring becomes awkward?
Where I am from it is really considered taboo. Where my wife is from, on the other hand, it's completely normal and quite logical.
I think the key is to understand why (on a case by case basis) the adult-child does not want to move out. It is perfectly normal for people to have room mates in almost any culture, and perhaps his preferred room mates are his parents.
Consider that if he's 40, his parents are pushing 60, probably older. At that point, who is living with who?
Is the adult-child capable of holding down a job to afford his own place, but chooses not to? That's quite common where my wife is from. It makes simple economic sense - saving $10000 a year on housing is quite appealing! Consider that if he's been doing that for the last 20 years, he has saved himself (assuming 5% interest by investing that money) over $330,000! That's a significant nest-egg.
We, as a society, are very quick to judge someone for their circumstances before we get to understand the reasons why. This is a perfect example of that.
Now, when do you promote your children to move out? I would say when the reasons for moving out outweigh the reasons for staying. Maybe they're not very responsible, so you need to cut them on their own so they are forced to live more responsibly. Maybe they bring their (loud) friends over, or they have a band, or there isn't enough garage space.
Maybe you just plain don't want them in your house anymore. It doesn't mean you don't love them!!
It's very dependant on culture, I would imagine. Though there is a point where you cross over from boy living with mother to mother living with son.
I would say, as a mess of vaguely Western culture that I am, that once they're at the age when they have a proper job, they should want their independence and start the process of moving out. Where I live, that's about 25, after mandatory military service and university. Obviously, the age where you are may be different.
Obviously, some people never have a proper job, but you can compare to the average for the child's age and infer from there.
It's very context and child dependent. My son is much more outgoing and focused than my daughter, so she's more likely to need some time to figure out what she's doing after graduation.
If my kids finish college and I can see that they have a plan going forward for their life, then I'll be more lenient about letting them stay home. If it looks like they just want to live with Mom & Dad and not do anything, then I'm more likely to kick them out.
My brother and I are a good example case. I went right to college and got married (so I moved myself out of the house). Otherwise, I would have gotten a job and been expected to find my own place to live.
My brother was having more trouble academically, so he is living with my parents while he goes to community college, and is taking things slower. He is allowed to stay with my parents for as long as it will benefit his education.
My parents explained that once we were 18, we could only live with them if we were still going to school. After that, we were on our own. Like @Mark said, if it looked like we just wanted to live with them to avoid doing our own laundry, they would politely encourage us to leave.