Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

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

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