Too High Cost of Caregiving

If your solution to long-term care is, “my kids will take care of me,” there’s new research that shows just how high a price your children may pay in compromising their own health.

 Employees in the U.S. who are caring for an older relative are more likely to report health problems like depression, diabetes, hypertension or heart disease.

 That costs employers an estimated $13.4 billion per year, according to a MetLife Study of Working Caregivers and Employer Health Care Costs.  And some of those health care costs are borne directly by the employee.

 Here are some more findings:

 * Younger caregivers (18-39 years old) demonstrated significantly higher rates of cholesterol, hypertension, COPD, depression, kidney disease, and heart disease compared to non-caregivers of the same age.

 * Caregivers tend to skip their own preventive health screenings such as mammograms.

 * Caregivers are more likely to miss days of work and often switch from full-time to part-time to care for their elder.

 * Employees providing eldercare were more likely to report fair or poor health in general.

 * Female employees reported higher stress levels at home than non-caregivers.

 * Eldercare may be closely associated with high-risk behaviors like smoking and alcohol.

If you know anyone who is or has been a caregiver, you know this first-hand. 

While eldercare is often thought of as an issue you hit in your 50s, this survey shows caregiving responsibilities across all age groups, with some of the heaviest health toll taken by those ages 18-39.

The report, directed toward employers, calls for better coordination of wellness and eldercare programs, more work time flexibility and stress reduction seminars, among other benefits.  And while reducing employer health care costs is a lofty goal, we can’t help but wonder if in the current economic environment the call for more resources will fall on deaf ears.

But, this report can be a wake-up call to anyone thinking that having their children care for them as they age is a long-term care solution with no consequences.

It’s good reason to figure out now how to finance your own long-term care, whether though your own assets or long-term care insurance. I know the current economy makes that difficult for many of us. 

But after all the years of keeping them healthy, getting them to eat their vegetables, and get exercise – the loss of their good health for elder caregiving is too high a price  to pay.

Signs of Financial Help for the Sandwich Generation

The White House yesterday introduced new sandwich generation initiatives.  While it’s a long way from being reality, it’s a welcome nod to the financial challenges of baby boomers trying to save for their own retirement, help their children and aging parents. 

Here are the highlights from the White House statement:

  * Help Families with Soaring Child Care Costs: The administration proposes to nearly double the Child Care Tax Credit for families making under $85,000 a year; with families earning up to $115,000 a year seeing at least some increase in their credit.

  * Helping Families Pay for Care for Elderly Relatives: At the same time, middle class families in the “sandwich generation” – struggling to care for both their children and their parents – will also benefit from new initiatives to support elder care for seniors, and respite for their caregivers. 

 *Cap Payments on Student Loans: To avoid squeezing recent college graduates entering a tough job market, we will ensure that payments on federal student loans are never more than 10 percent of the borrower’s discretionary income.

 * Save for Retirement: The initiatives make it easier to save for retirement with voluntary Automatic IRAs for workers without access to existing retirement plans through their jobs, larger tax credits to match retirement savings for millions of additional workers, and new safeguards to protect retirement savings.

Details on Care for Aging Relatives.

An estimated 38 million Americans provide unpaid care to an aging relative, including approximately 23 million caregivers with jobs and 12 million who are also caring for their own children.

The $102.5 million Caregiver Initiative will ease the burden on families with elder care responsibilities and allow seniors to live in the community for as long as possible. The Initiative adds $52.5 million in funding to Department of Health and Human Services caregiver support programs that provide temporary respite care, counseling, training, and referrals to critical services. The extra funding will allow nearly 200,000 additional caregivers to be served and 3 million more hours of respite care to be provided. It also adds $50 million to programs that provide transportation help, adult day care, and in-home services, such as aides to help seniors bathe and cook, help which eases the burden for family members and helps seniors stay in their homes.

Will it happen?  In this political environment,  who knows but at least it’s recorntion of the increasing financial pressure faced by those in the middle.

More Physician Support for Caregivers Ahead?

if you are a caregiver –an exhausted caregiver — read this column from the New York Times about care for the caregiver and the changes that may be coming your way at the doctor’s office.

It captures the exhaustion and overwhelming sense of responsibility that comes with providing care to an aging loved on.

It also provides hope that doctor’s increasingly will find a way to deal with the complex relationship between their patient and the caregiver.  A paper by the American College of Physicians in conjunctions with ten other professional societies offers ethical guidance to physicians in developing mutually supportive –patient-physician-caregiver relationships.

Questions, according to the NY Times like:

How should physicians approach long-distance family caregivers? What should they consider when working with the caregiver of a terminal patient? How can they best support the caregiver who is convinced that he or she can never do “enough”?

With the number of caregivers fast approaching 40 million – and the aging of baby boomers  promising more of us will be or continue to be caregivers for spouses, siblings – tackling this issue is critical.

I had the benefit of dealing with a wonderful gerontologist when my father needed care.  Hospitals stays were their own nightmare of communication with physicians.  Finding ways to bridge the care link between caregiver,physician and the cared holds great hope for helping caregivers traverse this very difficult time.

 What do you think?.

Watch Out for Roth IRA Predators

The new rules on Roth IRA conversions can be a real benefit to some baby boomers and seniors.  But it also an opportunity for less scrupulous sellers of financial products to engage in a bit of bait and switch.  Not good for your retirement planning….probably pretty good for the seller’s wallet 

This article Crooks Are After Your Retirement Account from CBS MoneyWatch gives  a great  inside view of how at least one sales agent is planning on using Roth IRA conversions as a hook to get information to sell you something else that you probably don’t need.

Watch out!

I have no doubt you’ll start seeing seminars on Roth IRA conversions, flyers in your local newspaper and senior center.  Be wary.  Some will be legitimate experts with good information and reputable businesses.  Others will be using it as a hook to get information to sell you something you don’t need or isn’t right for you.

Tips

1. Get your information from reliable, trusted sources.  Get the information promised and don’t give up your personal financial information to get it. Here’s a NY Times article that can help you figure out if a Roth IRA even makes sense for you. Check with your tax adviser.

2. How is the person offering you advice on Roth IRA conversions getting paid?  Do they have expertise in retirement planning and investing for retirement.  Check out our blog on recommendations from the AARP Retirement Survival Guide.

3. Keep your antenna up.  Watch for bait and switch. Watch out for crooks. Maybe the information is good, but if you suddenly find yourself talking about a different product, it’s probably time to move on.

Helping Aging Parents: Enable or Reset?

I hear more tales of struggling baby boomers trying to shore up their own finances and at the same time stretch their packed schedule to help meet the increasing needs of aging parents.

The pressure on the sandwich generation is astounding and the responsibilities overwhelming. We don’t feel like we can say “no.”  But are we saying “yes” to the right things?

It’s easy to jump quickly into the “fix it “mode of figuring out how to fill the gap.  Basically, you focus on enabling them to live as they have been living.  Minor changes, maybe, but not rocking the boat becomes the goal.  Pretending nothing has changed. 

But, maybe a better goal is to help them figure out if there are steps to take to reset their life to match their resources. Harder discussion but it just might help reduced some of the sandwich generation squeeze. 

So before you dip into your own retirement savings (not a good idea) or dig deep into researching how to leverage assets, ask yourself this question first:  “What can we talk about changing about their life that might help reduce their expenses?” 

There might still be a gap to fill, but maybe not as deep or wide as your first thought. 

What to look at?  Here are three places to start:

 1. Fixed expenses:  Sit down with your parents (or hire a professional if they won’t share their finances with you or if they have low incomes a local social services agency can help) and figure out what fixed costs they have.  Some often overlooked places are in insurance.  Loyal to a company they have done business with for years, they may not have shopped their coverage and are overpaying.  Check the Medicare health insurance plans, auto/home policies; and, life insurance policies.  If they own a home, what’s the state of the mortgage?  If they have a reverse mortgage, how much more can they expect in payments?

 Are there things that they pay for out of habit, but don’t necessarily use or need (something as simple as magazine subscriptions)?  Are they giving money to multiple charities without recognizing the impact on their own finances?  Are they gifting money to family each year without recognizing the changes in their own financial condition?

2.  Credit cards: There have been some horrific stories about older people with thousands of dollars of debt on credit cards and very high interest rates, as they have missed payments. They may not even be aware of the changes that have taken place.  If this is an issue, figure out whether you can help them get a reduction on the interest rate or find a credit counseling service to help restructure the debt. 

3. Explore local non-profit and government resources: In your state there is an office on aging or you may find it listed as an Area Office on Aging.  Your parents may be eligible for help through local programs or the aging experts who work there might be able to direct you toward resources that could help. Your town may have senior center that can become their hub of activity at a low-cost. Free classes or minimal  and low-cost trips can replace higher cost alternatives.

So before you ask “how much do you need?” and turn yourself and your family into a pretzel to make their ends meet, ask “can I help you figure out if there are things in your life we can change a bit to help you cut your expenses? “  It can be a win all the way around.  You are likely to find that they welcome the help and chance to stay financially independent.  You come away with a better understanding of what your future financial obligations to them might be.  You are both better positioned for now, but better prepared for what the next stage of life may bring.

5 Sandwich Generation Money Lessons from 2009

2009 – almost over. Whew!  So, let’s take a look back at money lessons learned in 2009 for those of us in the sandwich generation.  Here are five money in the middle lessons from 2009.

Add your own to the list!

1. A house is just a house – We got caught up in thinking about our homes as anything but a place to live.  It was a piggy-bank to bank roll our purchase of a car, an education, a vacation, a second home – you name it we figured out how to tap the growing equity in our homes to purchase more.  It was our retirement plan – forget about retirement savings, we’ll sell the house for multiples of what we paid and live happily ever after on the

The crash of the housing market brought us back down to earth.  But now millions of homeowners of all generations find themselves with more due than the house is worth and foreclosure threatening.  Or stuck – wanting to sell – but can’t sell for enough (house arrest as the condition is now popularly called).

So hopefully we have all learned the value of down-payments, understanding mortgage terms and conditions, and buying what you can really afford – a house to live in. 

2. Credit in moderation only –.  We started to get a handle on the concept of good credit and bad credit in 2009.  Regular saving returned.  Paying down credit became a priority.  Paying cash became fashionable.  College bound children and their parents began making some tradeoffs between piling on college loans and getting started with community college classes. 

Family conversations about money – among all ages from kids to parents to grand-parents—became more frequent, if even still a bit uncomfortable.  Especially important for young adults who have grown up in a “charge it” world who will benefit from learning early the danger of too much debt.

3.  Working in Retirement – This is a phrase that just 18-months ago would have been met with laughter.  Pretty serious stuff now.  While 401(k)s and IRAs have begun to rebound and the stock market looks a bit rosier, the concept of working longer and working in retirement has become the norm. Life has become practical –waiting to take Social Security until full retirement age, staying on the job a bit longer to rebuild savings and keep health care, finding an Encore career (for both money and our mind) and figuring out how we don’t outlive our money.

4.  Having a long-term care plan is a gift for your children– Okay, maybe you are one of those people who say it will never happen to me, but the fact is that living longer can create financial havoc.  I find that more conversations among baby boomers friends turn from the kids to talk of parents – assisted living, nursing homes, Alzheimer’s, stroke  — the emotional and financial pressure of figuring out how to care for our elders who never thought they’d live this long.

A lesson more of us are learning (I hope) is to have a plan for long-term care and share it with your children.  Where do you want to live, if you can’t take care of yourself is there money to help pay for care, what do you expect your family (children, sibling) to do for you?  Who knows exactly how it will all play out but having a plan is a tremendous gift to those faced with helping you.

5.  Families make a difference –This was a year about families pulling together — children moving back in with parents, older generations helping younger generations make house payments, student loan payments; sharing resources and sharing knowledge about money and life.  More talk about values and less about stuff.

It’s been a hard year but in so many ways a good year. Lot’s of lessons learned across the generations.  What do you think? Add a money lesson from 2009.

Compare Medicare Part D Costs Before the Deadline

We’re coming to the end of the Medicare Part D open enrollment period for prescription drug coverage.  If you or an elder you are watching out for has a Medicare Part D plan or a Medicare Advantage Plan with prescription drug coverage, the Dec. 31 is coming soon.

 I help my mom with her coverage and to tell you the truth I didn’t think there was any reason to make a change this year.  At least until she got her bill yesterday for 2010. 

The premiums almost doubled!  And while she does not take a lot of prescription drugs, I thought I better do what I tell others to do and check the options available to her.

I was surprised to find out how much the Medicare Part D landscape has changed.  Fewer plans, higher rates, shifting tiers (the level of payment the plan will cover according to it’s formulary).

I see the TV ads promising average savings of $400, $600 and wonder how can that be.  Well, now I see and it doesn’t take long to add up.  An increase of $10-15 per month in the cost of the plan, a shift in the formulary leading to even just $10 more per month adds up in no time at all.

 So, if you haven’t done it, take the time to compare.  Don’t assume the plan you have is the best value for 2010. And don’t get caught feeling bad for switching.  Even Medicrae tells you to shop and compare!

Go to Medicare.gov prescription drug comparison tool and take the time to put in the prescriptions that you or the person you are helping is currently taking (you’ll need the name of the drug, the dosage and frequency).  If you have their Medicare number you can have it compare against the current coverage.

You can purchase directly from the site, go to the health care plan itself or an insurance agent or broker who handles that plan.

If you aren’t sure, try a insurance broker that represents a number of companies and offers to help you compare plans.  The only caution here is if they are commission based, remember that they may receive more if the plan they sell you is more expensive.  So ask.  Some companies pay their agents a flat fee no matter what plan is selected which helps assure that your interests and theirs are aligned.

Looks like we’ll save about $300 by switching to a different part D plan.  Not that we were unhappy with them — just didn’t make financial sense to stay.  Nice way to start 2010.

Did you have a similar experience with part D this year?

Consider Retirement Housing Choices Carefully

The housing crash has hit more than individual homes – it is hitting retirement communities as well, especially some continuing care retirement communities.

Continuing care communities (CCRCs) are usually geared to people 60+ and provide a range of housing solutions from independent living to assisted living to nursing in one area. They are generally active communities with lots of activities readily available, onsite health care and transportation to local shopping and events. The idea is that the individual can move along the continuum to the type of housing and support that they need as they age.

But, CCRCs have not been immune to recession’s impact on real estate.  Many are facing higher vacancy rates as people are unable to sell their homes to buy into the new community.  That can lead to increased fees, reduced benefits and an inability to get back a deposit in a timely manner.  Not what you thought you signed up for! 

Here’s an article from the Washington Post about the challenges some CCRC residents are facing as they worry about the financial security of their retirement home and the possibility of higher fees than they planned for when entering the CCRC.

If you are considering a CCRC for yourself or a family member, make sure you ask about the financial stability of the company that owns and manages the property (it might be different organizations as is the case with the Erickson CCRC communities mentioned in the Post article.)

 If the pundits are right and real estate values will be slow to recover, you want to understand very clearly what you are buying into now and in the future.

Switching Medicare Plans? Get Info Now!

Even if you aren’t eligible for Medicare, you know that something is going on with the volume of advertisements about Medicare Advantage and Medicare Supplement plans.  It must be about every other ad on cable TV.

What’s going on?

We are in the annual enrollment period for Medicare Part D Prescription Drug plans and Medicare Advantage plans. Marketing started October 1. Plans can be switched from Nov. 15 to Dec. 31.

So if you’ve already got coverage, why would you want to switch or help your elder change plans?  Because the marketplace is changing – and will probably be changing some more if and when the health care reform bill passes.

While many have found Medicare Advantage to be cost effective and packed with extras (gym memberships, vision and dental discounts), but the product is changing.  So read your benefits carefully.

Some insurance companies have cancelled Medicare Advantage plans leaving policy holders to find new coverage.  Others have increased premiums or co-pays.  So that now the price difference between a Medicare Advantage plan and some of the Medicare supplement plans may not be as great.

It’s not clear what we’ll see in the future, but many of these plans may look much different from when you shopped them two or three years ago.

Here’s a good article from the NY Times about examining your Medicare health plan options.

I’d add to their recommendations to make sure you get quotes from a couple of different companies.  For example, Medicare Supplement plans are standardized which means plan benefits are the same no matter what the company.  But the prices sure aren’t. Over a year you could be paying hundreds of dollars more from one company than another.  So shop and compare Medicare health plans. 

If you’ve had retiree insurance from your employer and this is your first venture into the Medicare health plan maze, you might want to work with a broker who specializes in Medicare health plans.  Make sure they are experienced and can show you a couple different companies and plans.

And Part D plan formularies – the list of drugs that are covered at what rate – change too.  So if your medications have or will be changing, you might want to look at other part D plans to see if the one you have is still right for your needs.

And always check with your doctor accepts the plan you are considering.

So don’t delay. the sooner you get the information, the sooner you can make a decision and not get caught in the last-minute chaos of getting your application in on New Years Eve.

Generations Sharing: Baseball and Assisted Living

This blog is about generations — how to help each other financially and emotionally.  

So I couldn’t resist sharing the video about a young baseball player chasing his dream while living in an assisted living facility.  It’s heartwarming — a good reminder of how much the generations can share and learn from each other.

Here’s the link to ESPN E:60 story of Josh Faiola of the Lake Erie Crushers and his summer in an assisted living facility.