Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Archive for June 2009

Mom’s Moving In – Boomers are you really ready?

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746-2W23SENIORS_xlgraphic_prod_affiliate_4The makeup of households is changing for the sandwich generation baby boomers.  One of the biggest trends is the number of  adult children sharing living quarters with their aging parents.  There’s a great article from the Sacramento Bee    about a 105 year old mother moving in with her 76 year old daughter. Wow.  Really makes you think about the future.

 The Census Bureau says there are 3.6 million older parents living with their adult children, a 50% increase from 2000.  We can expect that trend to continue with increasing longevity, the need for long-term care and financial resources being squeezed.

 It can be a very economical decision.  It can also be a way to make sure your parent (or aunt, or sister or whoever) is getting the quality of care and support you want for them.  

But it means big changes for everyone involved. And it can be a way of reducing the stress of constantly “running to Mom’s”.  

 On the other hand it can bring on new issues. Some upfront planning and raised awareness can help things go more smoothly.

 HomeInstead Senior Care has an educational program called Too Close for Comfort?, to guide families to the right choices for them. including an Intergenerational Home Tour   that can help you think about the impact of moving in together.

 Here are some questions that HomeInstead recommends you ponder as you make the decision:

  •  Is it best financially to maintain separate residences or to move in together?
  • Do you have the resources to take care of your elderly loved one in your home?
  • Are there young children at home? If so, what do they think about it?
  • Should you move Mom or Dad to your home, or should you move into theirs?
  • Is the home safe for a senior and, if not, what changes need to be made?
  • How do you handle separate bank and savings accounts, and joint expenses?
  • What role will adult siblings play?
  • Will you need caregiving help for your senior?
  • How do you balance family time and private time?
  • If you’re an older adult, will you lose your independence? 

You’ll also find resources at  www.caregiver.org; www.caring.com, www.aarp.org/family/caregiving/

It’s a big decision, so don’t shortchange either of you on the conversation and agreements before you choose to share space.

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Written by Laura Rossman

June 25, 2009 at 3:38 pm

Is now the time to stop driving? Resources for older drivers and their families

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Sorry Detroit.  It’s been a long time since we bought a new car.  We’ve been buying “Mom” cars for years. Used, low mileage cars purchased because someone’s Mom, Grandma, aunt couldn’t drive it anymore. 

 There’s always a story behind the car; and, unfortunately, it’s often about loss.  The automobile is so tied to our independence –our ability to go where we want to go, when we want to go. Most of us don’t live in neighborhoods where it’s easy to walk or take public transportation to get what you need.  So, losing the car means relying on someone else. And for the sandwich generaion, it’s adding another level of responsibility and duties.

 It’s tough to stop driving.  And for family members it’s difficult to step in because the topic is so emotional. And you’re just not sure when and how to approach the topic.  A new website from AAA can help (www.aaaseniors.com).  

 The website is focused on the senior driver and provides great tips and resources for on assessing the skills of an older driver and how to create a plan of action when the time comes to stop driving.  Here are three planning tips:

  •  Think about and discuss the gradual adjustments that may need to be made as you or the senior in your life gets older. Sometimes, just a few simple adjustments, such as limiting driving to certain times of day, avoiding night driving or adding an extra-wide mirror, can help prolong a senior’s driving.
  • Identify alternative modes of transportation well before skills diminish.
  • In choosing a retirement home, look at access to public transportation, the ability to walk to services, and whether transportation is provided by the facility

AAA also provides a self-assessment tool for the senior driver that can help raise awareness about the current level of their driving skills.

Like the conversaions about money, talking about whether it’s time to hang up the car keys is an emotional discussion.  Take advantage of these resources to help you and your older drvier make the right decision at the right time.

Written by Laura Rossman

June 23, 2009 at 9:55 am

Are Baby Boomer’s Empty Nest Dreams Evaporating?

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Baby boomers, it looks like the empty nest may go the way of retirement.

You’ll be working and the kids will still be home.  Maybe this is the design of our New Plan A thanks to the recession.

 A new survey from VibrantNation.com reports that 37% of boomer women say they have one or more adult children currently living at home. Almost a third requires the child to pay rent; 16% have set a limit to how long the adult child can stay and – almost half of those have extended the deadline because of the recession.

  Is it a sign of the economic times or a trend that speaks to the end of the empty nest as the generation X and Y “children” bounce back more frequently?  Many of us find it one way to help our kids without a huge financial impact on our own budget—which is probably under its own stress right now.

 “The jury is still out on whether this is a temporary adjustment to tough economic times, or a re-jiggering of multi-generational family models that will have staying power over the long run,” said Dr. Carol Orsborn, Senior Strategist for VibrantNation.com.

 A troubling finding is that one-third of respondents have dipped into their retirement funds to support their adult children.  The survey said 35% reported using funds set aside for their retirement/future to help an adult child or grandchild.  That’s disturbing because unless you have a very healthy retirement fund and pension using your retirement money to help your children is probably putting your financial future at risk. Helping your grandchildren might be a different story depending on your age and your retirement funds.

 Just like they say on the airplane – put your oxygen mask on first, then help your child with theirs.  In the case of money, time is on their side.  Time is not on your side when it comes to your retirement savings.

 If you can provide financial assistance through your regular income, then making the choice to divert your funds to, say helping them rather than adding to your savings is fine.  Though you might want to consider whether this means that you’ll have to work a bit longer or scale back your lifestyle (current or future) a bit.

 But tapping into your retirement savings not only depletes your nest egg, but also may trigger tax consequences for you.

 Then there is the “24-hour Mom ATM” as VibrantNation.com so accurately calls it.  Almost 30% say they are helping with housing costs, 26% with daily living expenses, 17% with education and 17% with healthcare.

 Okay, personally guilty here as I pick up ‘things” for my struggling young adults.  In fact yesterday I helped support a new checking account minimum balance requirement so she could forgo monthly fees (I hate those bank fees!)  with a promise to payback soon.

 The healthcare issue is a big one since many of the jobs young adults find don’t come with health insurance and they no longer have access to their parent’s insurance.  As the Administration struggles with health care reform, one big benefit for both young adults and their parents would be affordable healthcare.

 It’s hard for most baby boomer parents to know where to draw the line on helping their adult children financially.  One place to start is to draw the line at tapping into your retirement savings and putting your financial future at risk.

Written by Laura Rossman

June 18, 2009 at 3:06 pm

Watch for Signs of Elder Financial Abuse Among Boomers and Seniors

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A tough economy brings out financial scammers.  And older baby boomers and seniors are being caught. You just want to believe that the answer to your economic problems is on the other end of the phone.  There a heart wrenching story in today’s Wall Street Journal about a family fight to save an elder from scammers.  Alone after his wife’s death, “phone pals” start calling – first for a few dollars, then thousands. The family finally went to court to get authority over the finances.  Something no adult child wants to face.

 Family members walk a fine line in helping.  You can see the problems, but if you don’t have legal authority to do anything you can only cajole and nudge toward cutting off the scams—or taking legal action.

 While these stories are horrific, the fact is that most of the elder financial abuse comes at the hands of family members.  A recent report by the Met Life Mature Market Institute says the losses amount to more than $2.6 billion per year.  Many cases are never reported. The perpetrators are typically not stranger but family, business associates, in-home services and friends.

 If you are concerned about an elder loved one’s finances, there is a great list of warning signs in the MetLife study Broken Trust:  Elders, Family and Finances. 

  They include:

  • Signs of intimidation, withdrawn behavior
  • Talking about “new friends”
  • Significant changes in spending patterns
  • Changes in financial documents
  • Missing belongings or property

 You’ll also find a list of definitions and resources.  

 What you won’t find is an easy way to get action on what you think is a national or international scam.  Finding a local or national agency with resources to help is difficult.  Getting the elder to help you can be just as difficult.

 May the new consumer financial regulatory agency being discussed by the Obama Administration can help someday.  But in the meantime, this is an issue that will grow with our aging population.  And even if you can’t talk with your parents about their money, warn them about the tricks being played on the phone and the Internet by those trying to steal their retirement nest eggs.  And listen very carefully if they start referring to “new phone friends.”

Best Financial Advice for Baby Boomer Couples? Talk

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While we wring our hands about the impact of the financial crisis on our finances the one thing we’re not doing is talking about money with our spouse.  A new study from Fidelity Investments says in the past two years couples have made little progress in how they approach any financial decisions:  day-to-day, long-term planning or retirement planning.

 Only 15% of the couple felt comfortable that both of them could assume responsibility for their joint finances if necessary. Looks like the boomers are no better than their parents about making sure each part of the couple can take over the finances.

No wonder we can’t talk about money with our aging parents. We can’t talk with our spouse about our own finances and retirement plans.

 What’s being left unsaid? 

  • Only 45% of couple make joint decision on day-to-day finances(budgeting, bill payment)
  • Only 38% jointly discuss investment decisions
  • 60% of couples don’t agree on their respective retirement ages
  • 44% don’t agree on whether they will work in retirement
  • 42% have different ideas regarding their expected lifestyle in retirement 

“We recognize that every couple’s situation is different, with many husbands and wives experiencing a job transition right now, others assessing whether they are able to retire, and some simply juggling the competing financial demands of raising a family,” said Kathleen A. Murphy, president Personal Investing, Fidelity Investments.   Each of these life events has clear financial implications that couples need to jointly discuss and then agree upon a plan of action.”

 So, if you are a baby boomer or near retirement and are not talking with your spouse about your money, vow today to change your ways.  

 Start with something easy –the family budget or simply sit down together and go through retirement savings statements together.  Work up to talking about goals around retirement finances and work.

 The Fidelity Research said couples reported confusion about what retirement products they owned – annuities, life insurance, IRAs – and over 44% disagreed on whether they should sell real estate to help fund retirement.

 Together, make a list of what investments you own, where your investment accounts are held.  Not only will it begin to give you a good picture of where you are together financially, but should something happen to one of you—even a major medical event– it is a true gift to the spouse and their family.

Written by Laura Rossman

June 11, 2009 at 3:05 pm

Language of Aging is, well, Old and Dated

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The words that describe our life after fifty just don’t work anymore.  Some of them haven’t for a while. 

 We’ve been searching for years for a word to replace “seniors.”  Research tells us boomers hate that word.  We haven’t really come up with a better one.

 Retirement – boy has this one changed in just the past year.  For many of us the prospect of stopping work is fading.  The reality is that we’ll keep working, maybe part-time, maybe a whole new career, maybe an encore career.  But we still talk about retirement planning because – well – what else do you call this new stage of life?

 Caregiver is another word that most of admit they don’t identify with, yet they are providing support – physical, emotional and/or financial – to another.  I helped by parents with a variety of things for over 11 years after my father’s stroke, but never thought of myself as a caregiver.

 Sandwich generation is a common phrase, and one that this blog covers, to cover those caught in the middle of aging parents and adult children.  But it’s really so much more complex and messy than that.  Sandwich implies a nice orderly, stacked sense of responsibility and just one up and one down.  But we know the pressures to assist come from all angles – parents, adult children, aunts and uncles, grandchildren, brothers and sisters, ex-spouses, ex-in-laws and I’m sure you ca add a few.  Ken Dhytwald recently released research– The Retirement Tipping Point — with Harris International that likened family responsibilities to a Rubik’s cube.  I like the image, but it suggests there is a solution – if you’re in the middle, you know solving one issue just leaves you to tackle others. What’s the right image? I think it’s more like Gumby being pulled and stretched in lots of different directions. But that’s not quite right either. 

Aging in Place – I love the concept and absolutely hate the term.  it sounds so sedentary.  And does anybody really think about staying in their home in those terms.  

 Why does it matter? As we search for information to help ourselves make it through these new lifestages, we search the web.  We “Google” it.  We use key words.  The terms we use are important because they get us to the information that can help us most.  Information providers “bucket” their information and products by these keywords.

 It’s why we end up searching on “senior discounts” when at 50 all we’re trying to do is find a deal and would curse you if you called us a senior.  Or we search on retirement planning when our plan is to work until we drop, but know we really do need to have a plan in place in case we can’t.

 The words just don’t fit in our networked, stressed and changing society.  Any suggestions?

Written by Laura Rossman

June 10, 2009 at 12:50 pm

Tackling the Tough Talk with Parents

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Talking with aging parents about money and or their wishes about care is never easy.  Most of us have spent a lifetime making sure we stayed away from such personal issues.  Good heavens, a lot of us don’t even like to talk with our spouse/partner about money.  But, the conversation can be so helpful in reducing stress and adding some sense that you are “doing the right thing” when the time comes to lend a hand.

 A new website from Genworth Let’s Talk (http://www.caringtalk.com) provides some great tips on how to bridge the communication gap, including recognition that sometimes you just have to back off, and come back to it later.

 “Families must face reality and understand that their financial, emotional and physical well-being will be vastly improved if they are prepared for the long-term care needs of their loved ones. The goal of the ‘Let’s Talk‘ campaign is to help families communicate openly, plan for the future and ensure that every member of the family is cared for and protected,”  said Colleen Goldhammer, senior vice president of Long Term Care insurance at Genworth. 

Don’t worry.  It’s not a site about long-term care insurance, though there are plenty of references about long-term care. It provides good practical tips on how to have a very difficult conversation.  Ask anyone who has ended up in a caregiver role (on-site or long-distance) having had a conversation that gives you a sense of what your mother or father or aunt or uncle would like helps you make choices when the time comes.  Without that background, the best you can do if do what YOU  think is right.  That might be just the opposite of what they want, but we just don’t know.

 I saw a quote yesterday that I think captures the reasons for tackling this tough talk:  Rather than planning for the future: plan for the surprises.

 Any caregiver who has taken “the call” can tell you that planning for the “surprise” would have made life easier for both them and their parents.

 Tackle the talk.

Written by Laura Rossman

June 4, 2009 at 1:13 pm