Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Archive for March 2009

Tips For Handling Health Crisis with Aging Parent

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Baby boomers are know- it-alls.  All the research says we love to be seen as the experts – with it on topics large and small.

 

Then a health care crisis hits with our parents.  We realize we don’t know a thing about this area of health care.  But the danger is that we pretend we do. We don’t necessarily trust the experts.  That ends up causing more problems and probably more costs.

 

A conversation this week with a friend again emphasized to me how little most of us know about Medicare, the health care system and long-term care needs.  It’s not our fault.  We probably never really had a need to know until this point.  And unless you are a planner, you probably have never really thought about your own future long-term care needs.

 

So we end up in a hospital, relieved that our loved one is alive but confused by what the experts are telling us happens next.  The situation this week was a stroke.  The next step is rehabilitation.  What’s the right place?  Who pays for what?  What to expect from rehab? They need to move her today?   So many questions.  So many confusing acronyms and initials. So much pressure and so little knowledge base to work from.

 

 

So what do you do?  You want to be a good advocate for your loved one.  You want to make the right decisions about their care and their future.  Here are some suggestions:

 

1.  Listen carefully and ask questions of the care experts at the hospital/care facility.  Ask them to give you not just the next decision, but layout a general framework for what may happen in the days and weeks ahead, and what to expect.  They’ll qualify their answers – because it does “all depend – but it at least gives you a chance to wrap your head around the event and the process ahead. Remember, this might be your first time, but they have been through this many times before and do probably have a good sense of what’s ahead.

 

2.  Call on others who have been through this.  Friends, family members, colleagues. Each situation is different, but they can help put things into context for you.  And you can learn from their mistakes.

 

3.  Get educated.  Go to www.Medicare.gov and understand the basics of how Medicare works and what it covers.  There are some great resources and booklets to download.  If you need to look at nursing homes, there is a nursing home compare feature that will help you get a sense of quality of care available at various facilities.  This isn’t the same as your employer health insurance so don’t make assumptions.

 

4. Consider hiring an expert.  Sometimes it can be helpful to hire an expert – your own advocate – to help you through the health care morass and decisions.  They are generally called care managers or geriatric care managers.  They are people knowledgeable about aging and long-term care issues and local resources.  They can be a great bridge between the health care institutions and you – your own translator and guide.  Some alternatives are the association of care managers www.caremanager.org  and www.yoursupportnurse.com , a national service that provides local assistance

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Written by Laura Rossman

March 29, 2009 at 3:34 pm

Health Care Costs in Retirement – a whopping $240,000

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Seems like there is just no good financial news for baby boomers. 

Yesterday, Fidelity Investments released it’s annual survey of what it will cost a couple to cover their medical expenses in retirement.  They estimate $240,000 for a 65 year old couple retiring in 2009. 

And you thought Medicare would reduce your health care costs to almost nothing.   These kinds of costs come as a surprise to many as they move to retirement.  If you are helping your parents or an older  family member cover their health care costs, you know that number is not exagerated. with many companies dropping retiree health benefits, individuals are left to cover the costs of insurance out of their own pocket.

More bad news — this doesn’t include the cost of over the counter medications, dental and long-term care.  On average, long-term care in a nursing facility adds another $78,000 to the costs.

This is a good wake up call to make sure your retirement planning includes the cost of health care and that you know how much risk you want to cover and how much you want to shift to an insurance company.

The Fidelity estimate takes into account cost sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by Medicare. You’ll want to look at covering the gaps that Medicare does not cover through a Medicare Supplement Plan or Medicare Advantage Plan.  You should also take a look at long-term care insurance to cover potential long-term care costs.  You don’t need a cadillac policy, but some coverage will help assure that your family doesn’t feel the financial burden of your care.

How you use insurance to cover health care costs depends alot upon your financial position and your tolerance for risk.  But, it’s not too soon to start thinking about this issue and get educated about what Medicare covers and what it doesn’t.

Written by Laura Rossman

March 27, 2009 at 3:56 pm

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Retirement Planning is About Building a New Plan A

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I just came back from a meeting of the American Society on Aging. I gave a couple presentations on Money in the Middle. There was lots of good information and discussions about the challenges and opportunities ahead.

 

I came away with the same conclusion I began with – for most of us, we are at a time of Retirement Reset.  Rethinking, tweeking, small cut backs is for the few with defined benefit plans and lots of time already in their job. As long as the plan remains funded, they’ll be okay.

 

However, most of us are faced with resetting our expectations of what retirement will be all about.  Thinking about our 60s, 70s and 80s, how we will live and what our days will be like. The amount of time it takes to recoup market losses is just too long for many of those in their 50s and 60s.  The game has changed, the rules are different and so will be retirement.

 

We don’t need a plan B or plan C.  We need a new Plan A.

 

What do you think?

Written by Laura Rossman

March 23, 2009 at 4:44 pm

Are Baby Boomers Haunted by the Next Crisis?

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Looking for a helping hand

Looking for a helping hand

The pressures on those caught in the middle of aging parents and children have increased substantially in the past six to nine months.  Job losses, housing market crash, stock market turning 401 ks into 101Ks.  Feels sometimes like we’re starting all over again.  What once seemed probable — now feels impossible. 

At the same time there is a resilience and positiveness that I hear and see in people I talk with across the country.  That’s the attitude that will pull us all through this — but in the meantime it feels a bit like we’re on edge — waiting for the next crisis.

That’s especially true if you are dealing with issues around aging parents or family members.  Just about the time you feel things have stabilized…the next shoe drops. 

What impact does this “on the edge” feeling have on our behavior — at work, with family and with friends.  What kinds of help and assistance are we looking for from companies that might ease the pain and simplify our life?  I’ll be speaking with companies who have businesses targeted at baby boomers.  What should they be doing to gain your attention and get your business?

What’s Next Boomer Business Summit www.boomersummit.com

Written by Laura Rossman

March 16, 2009 at 12:30 pm

Posted in baby boomers

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Baby Boomers – what you don’t know about your parents finances can affect your financial health

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Remember last time you went to a new doctor, he or she asked lots of questions about your parent’s health.  That’s because genetics matter and their conditions could impact your health.

 

But what about your parent’s financial health?  Many of us don’t think about a connection between their financial condition and ours. In fact, we probably never even talk about money with them.  But there is good reason to start changing that way of thinking.

 

  • A woman can expect to live nearly 20 years in retirement. A man can expect 18 years.
  • About 20% of today’s 70 year old women will live to age 95
  • There is a 70%+ chance that at least one member of a 65 year old couple will live to age 85. 

Previous generations didn’t think about – or plan for — living into their 80’s or 90’s.  And that’s where the wrinkle comes in.  Your parents may have planned for a well-lived life of 75.  But now they are 80 and they face unexpected increases in health insurance costs, the prospects of long-term care costs and a nest-egg that they are very simply outliving.

 

What’s that mean for you?  For many people in their 40s and 50s it means a dramatic shift in their life and their money.  It’s the double-whammy of saving for college education for your children at the same time you begin shouldering unexpected expenses for your parents. And that decision is not just a financial decision, but also a decision of the heart.  So how do you balance the head and the heart of providing financial assistance to your parents or other loved one?

 

There is no simple answer or a single right answer. It’s a path everyone each person finds for themselves.  But there are steps you can take to better understand the impact your decision will have on your own retirement. If you don’t, the cycle simply continues leaving your children with the same choices and potential financial burden you now face.

What can you do?

 

Talk to your parents about their finances.  Admittedly, that is often easier said than done.  One way to begin to gather information is to talk with them about your own planning for retirement – both financial and health/long-term care.

 

Learn about Medicare.  Part A, Part B, Part D and more…understand what they cover, and what they don’t, the cost of supplemental policies and out-of-pocket expenses.  With the increasing disappearance of retiree health benefits from employers, the costs are significant.  But being underinsured is even more expensive at this time of life when healthcare costs are likely to increase. A time of crisis is not the time to start learning what isn’t covered.

 

Plan for your own long-term care.  While it is not an easy topic to think about, it is a gift that you can give your children and family.  If you decide to fund your own long-term care, those funds should be segregated within your portfolio so the money is there should you need it.  If you choose long-term care insurance, the younger and healthier you are, the lower the premiums will be. 

 

For many of us, the failing health of an older loved one will come as surprise – and an immediate crisis. Once the immediate crisis abates, there will be decisions to be made that impact their life and yours.  Planning now helps you be prepared to not only handle the crisis but know that you have plans in place when you need care.

 

 

Written by Laura Rossman

March 10, 2009 at 10:31 am

Families Shoulder More Long-Term Care Costs

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Nearly 30% of long-term care costs are paid out-of-pocket—a full 10% higher than amounts reported in widely used previous estimates. The analysis includes spending on assisted living, a key component of long-term care.

 

This study found that individuals and their families contributed an estimated $64 billion of their own funds out-of-pocket towards long-term care services in 2006. In addition, families and communities played a central role in the nation’s long-term care system by providing unpaid care valued at $350 billion.

 

To finance these contributions, most seniors and their families rely on home equity, income from adult children, or retirement savings. and that’s where the problem begins to become even more acute.

 

All of these assets have lost considerable value over the past year.  So families and seniors will have less money to fund long-term care costs.

 

The report comes out as discussion about health care reform heats up.  Long-term care has received little attention in the debate so far, and experts predict that there will be few new government dollars to cover direct LTC costs.

 

So if you are caught in the middle, paying for long-term care costs what do you do?

1.  Get a long-term care funding plan in place.  Figure out how much financial support you are providing and if it is putting your own financial situation at risk, look for other solutions.  The www.medicare.gov/caregiving site has some tips for options.  Also take a look at www.caring.com.

2. If you were counting on the sale of a home in order to fund assisted living, check with the residence you are looking at.  With more elders unable to sell their homes, some of the assisted living and nursing homes are getting creative with financing solutions.

3.  Get a plan in place for yourself — how will you pay for long-term care costs in the future without burdening your family.  If you thought you would self fund but find that your retirement assets have been hit hard, now is the time to look at long-term care insurance to determine if it is right for you.  The younger and healthier you are, the lower the cost.

4.  If you are working, check to see if your employer has an elder care assistance program.  It may be part of your EAP.  They can often help you find resources in the community to help relieve some of the burden.  Or hook you up with a care manager who can help you determine what level of support would be most appropriate.  If you are a long-distance caregiver a national program like www.yoursupportnurse.com can, for a fee, help assess the situation your loved ones are in and provide recommended solutions.  These kinds of experts can be very helpful in finding local care solutions that you might not know about.

Written by Laura Rossman

March 6, 2009 at 10:50 am

Baby Boomers On the Road with Mom and Dad

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I just got back from Florida retrieving my Mom from a couple months in the Florida sunshine.  She likes to have her own car down there; and I’m nervous about her driving 13 hours by herself. So I drive her down, get her settled, enjoy a bit of sun and head back.  Then, do the return trip in the spring.  I’m not alone.

 

 

 

 

 

While I can’t find any statistics on how many boomers are making the trip to Florida, or Arizona or other warm weather places, I do know it’s a trend.  My van driver from the airport confirmed that. My seatmate on the flight down had done the trip from Canada. Conversations with friends and colleagues draw out stories of the same trips.

 

Why do we do it?  I think it has to do with keeping certain aspects of life constant as we age.  For our parents, the trip is often a return to see friends – their winter community. And, the real factor of getting out of the cold and ice and snow. and, of course, there is the dog who is THE most important member of the family and we can’t think about flying as cargo.  We do know that relationships keep your mind young and engaged. It’s invigorating to get to a new environment and change up the routine a bit.

 

For adult children it’s a chance to do something that enables.  It’s also a great chance for one-on-one time.  My husband speaks fondly of the drives from Florida to Chicago with his father – a great story teller.  He heard stories and learned more about his father than he ever would have without those two-day drives. My friend Denise is driving her grandfather south so he can visit with a favorite uncle. And so the stories go.

 

Transportation is a big issue as we age. For those of us in the middle, it can be hard to find the time from work to make the trip.   But the rewards can be worth.  And maybe, someday, our children will do it for us. 

Made the trip? Share your story

Written by Laura Rossman

March 2, 2009 at 1:21 pm