Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Archive for October 2009

Generations Sharing: Baseball and Assisted Living

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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.


Written by Laura Rossman

October 29, 2009 at 4:21 pm

E:60 Glory Days – ESPN Video

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Here’s the video about baseball and assisted living.  A great reminder about how much we can learn from each other at any age.

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Written by Laura Rossman

October 29, 2009 at 4:06 pm

Posted in Generations

Cost of Long-term Care Continues to Climb

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Long-term care costs continue to rise whether care is for a nursing home, assisted living facility, home care or adult day care. The increase in costs reinforce the need for long-term care planning:  how you want to receive care and how you’ll pay for it. If you are a member of the sandwich generation this is an important issue for your future and your aging parents.

 According to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs.

  • Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year.
  • Assisted living costs also rose 3.3% on average to $3,131 per month.
  • Home health care aides now cost an average of $21 per hour, a 5% increase;
  • Adult day services run $67 per day, a 4.7% increase.

 Many of us think that we’ll just get care at home which will be less expensive.  It all depends.  If you need assistance most of the day and night, then it is not less expensive than other alternatives.  But, home care is what most of us want, so at least use these hourly figures to help map out realistic potential costs for long-term care.

 If you think you are going to need to assist an aging parent with their care, these figures can help you better plan for financial assistance you might want to provide.

 When it comes to paying for long-term care, there are basically three choices:

You can purchase long-term care insurance to cover those costs, you can look at self-funding and wall off some of your assets into very safe investments so the money will be available when you need it, or you can hope you don’t need it and if you do deplete your retirement savings and then count on government programs.

Remember, this is custodial care not medical care.  So don’t count on Medicare or your health insurance to pay the costs of care.

Rates for care vary dramatically in different parts of the country, and even different parts of the state.  For example, in Maryland where I live, the average rate for a private room in a nursing home is $258; assisted living averages $3,873, a home health aide averages $20 per hour; a homemaker aide $18 per hour; and adult day services $75 per day.

Head up to Maine or Massachusetts and the daily rate of nursing care can hit $300. The MetLife survey provides rates for all states.

So it is very important to plan based not only on where you live now, but the costs of the area you might be moving to in retirement. 

If you are working, your employer may offer long-term care insurance as a voluntary benefit which means you pay the costs, but the policy may have some additional benefits such as less stringent underwriting.

If you are retired and interested in long-term care insurance, check out individual policies through a local agent or membership groups which may offer a discount.  Just make sure you compare a couple different policies since rates can vary dramatically.


2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services and Home Care Costs.  

Long-term care insurance quotes in Maryland.

Written by Laura Rossman

October 29, 2009 at 2:26 pm

All Generations Find Ways to Cut Spending

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No matter how old we are, we’re all taking steps to trim spending – and hopefully pay off debt and or increase savings. .  Sandwich generation baby boomers seem to be making the most changes.  But it’s interesting to see that across the generations the recession is changing some spending behaviors.

Here’s the list from the latest Harris Poll.  Sure not hard to see why magazines and newspapers are feeling the pinch.  More of us are finding that bottled water is not a necessity. So many of us are taking small steps to improve our financial future.

I’d add cancelling a gym membership.  Done it myself and turned to walking outside and DVDs.

Also using more coupons across all generations in our households.

My echo boomer children would add – shopping in Mom’s pantry.

 Do you have any tips to add?

“Have you done or considered doing any of the following over the past six months in order to save money?”

Base: All adults

    Total   Generation
    EchoBoomers(18-32)   Gen. X(33-44)   BabyBoomers(45-63)   Matures(64+)
  %   %   %   %   %
Purchasing more generic brands   64   58   62   69   67
Brown bagging lunch instead of purchasing it   47   53   52   55   15
Going to the hairdresser/barber/stylist less often   43   40   42   47   41
Switched to refillable water bottle instead of purchasingbottle of water   36   38   32   38   34
Cancelled one or more magazine subscriptions   34   21   30   41   44
Cut down on dry cleaning   22   15   18   28   29
Stopped purchasing coffee in the morning   20   21   25   21   13
Cancelled or cut back cable television service   21   23   20   23   14
Cancelled a newspaper subscription   21   12   20   24   28
Begun carpooling or using mass transit   14   24   12   13   4
Changed or cancelled cell phone service   15   12   17   16   13
Cancelled landline phone service and only using cell phone   12   15   17   10   6

Note: Percentages may not add to 100% due to rounding The Harris Poll® #121, October 27, 2009 By Humphrey Taylor, Chairman, The Harris Poll

Written by Laura Rossman

October 28, 2009 at 1:56 pm

More Boomers Face Retirement Risk

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Another gloomy report on the financial prospects of retirement for baby boomers and Generation X. 

The National Retirement Risk Index from the Center for Retirement Research shows that today half of Americans will not have enough retirement income to maintain their pre-retirement standard of living.

 Here’s why:

1. Social Security benefits till replace a smaller fraction of pre-retirement earnings as the full retirement age rises from 65 to 67.

2. Fewer and fewer workers have a defined benefit plan (pays a set income) and must count on their 401(k) plans.  In theory, that’s okay.  In reality, most of us have made mistakes along the way.  That leaves the median balance at $78,000 for those approaching retirement. 

3. Most workers don’t save outside of their 401(k).

4. Retirement assets will yield less income, especially bond yields.  In addition, out-of-pocket medical expenses are expected to continue to rise consuming more of retirement income.

 So, those who were at risk of not being able to continue their lifestyle into retirement are more at risk than ever.  And those who were not at risk may find themselves at risk going forward – or at least closer to the line than they would like to be. 


Percent of Households ‘At Risk’ at Age 65 by Cohort, 2004, 2007, and 2009

Income group
  2004 2007 2009
All 43% 44% 51%
Early boomers 35% 37% 41%
Late boomers 44% 43% 48%
Gen Xers 49% 49% 56%

Source: Authors’ calculations.  CRRBC Oct. 2009 #9-22


The good news is that younger households, who keep saving, may be able to catch up.  But for most baby boomers and seniors, time is not on your side for catching up.  The plunge in home values is one of the main reasons as many people looked to their home to fund their retirement.

 So what can you do? If you’ve planned well, have a pension and 401(k) and know the income you need for your retirement lifestyle – good for you!

 For the rest of us…unfortunately, there’s no magic silver bullet.  It’s a matter of doing what you can to adjust your lifestyle and continue to save as much as you can, in retirement funds and outside; work longer than planned to help build up retirement assets; pay down debt and calculate the numbers carefully on when to take Social Security.

 If you need assistance, get the help of a financial professional.  As friends for referrals and check with your 401(k) plan to see what financial planning tools and resources are available.

 It also time to accept that retirement won’t quit be they way you thought it was a year ago.  And an opportunity to help younger generations understand the importance of financial planning and starting retirement savings as soon as they can.

Resource:  National Retirement Risk Indes:  After the Crash

Written by Laura Rossman

October 27, 2009 at 6:45 pm

Geting to Know Medicare Benefits

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Medicare & You 2010.  It may not be on the top seller’s booklist but it is a book that any baby boomer approaching Medicare age or helping someone figure out their Medicare benefits should read.  And it’s free.

 Why is it so important to have a copy of Medicare & You 2010 about Medicare benefits?

  • Because it can get you beyond the myths about Medicare to the facts about Medicare – what it covers and what it doesn’t.  It covers premiums, deductibles and what is covered and for how long. 
  • It can help you unravel what you’ll be paying for Medicare in 2010 – whether it’s Medicare premiums, Medicare deductibles
  • It can prepare you to develop a plan for what is not covered by Medicare, especially long-term care.

 When my father was going in and out of hospitals and rehab facilities after a major stroke, I found it one of the best resources in terms of unwinding what was covered and what wasn’t covered by Medicare.  In our case, he had a great Medicare Supplement plan, but of course that only pays when Medicare pays.  So you have to know the basics and what to question.

You can find Medicare and You 2010 online.  Each Medicare beneficiary receives a copy in the mail as well, but the online version can be handy if you are helping an aging parent.  

If you are a baby boomer approaching Medicare and trying to figure out Part A, Part B, part C and part D of Medicare, this is a great place to start.  If you are confused about what long-term care benefits are covered by Medicare (not many days) you can find the answer here. There are more resources at including a good questions and answers site about Medicare benefits.

 If you are beginning to budget for your 2010 health care expenses, and starting to shop for Medicare Advantage, Medicare Supplement or Medicare Part D this booklet can be a good place to start.

Written by Laura Rossman

October 26, 2009 at 4:06 pm

Making Smart Financial Decisions

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As the stock market climbs back from the deep dark depths of recession, many are feeling optimistic that the worst is over.  Maybe.  But continuing unemployment and foreclosures indicate that we have a way to go yet.   

Lots of articles too on people yielding to pent up demand and heading back out with credit card in hand.  Good for the economy; not so good for their savings plans. 

So since it’s National Retirement Savings week what is it that we can do to get started or get back on track to retirement savings.  There’s lots of advice out there.  Here’s the Retirement Savings Week site.

But I think that for many of us who are beyond the “why should I save” and are struggling with “how do I save for retirement now”, there are two “musts” that often get overlooked:

 1. Understand the financial products you are buying and how they fit in with your goals.

2. Understand who makes money when you purchase the product and what how their goals align with your goals.

 aarp retirement guideI recently received a copy of The AARP Retirement Survival Guide:  How to Make Smart Financial Decisions in Good times and Bad by Julie Jason. 

 While calling it a survival guide may be a bit over ambitious, it is a good guide to answering the two key questions above – how does the product really work and who makes money when you buy it.

 It’s a practical book.  Subject headlines like: Hint, WARNING and Julie’s recommendations help you shine a bright light on the pros and cons of the product.  That ultimately makes it easier to see if the product is a right match for you.  She also provides lots of good questions to ask and easy to navigate language free of financial jargon.

Lately, I’ve come across more people who are confused about the relationship they have with their “financial advisor.”  That person could be a broker, an insurance agent, a financial planner or a register investment advisor but many people think they are just different names for the same thing.  Not at all!  Jason has a great information and a chart (p.87) on who gets compensated in what manner.  It’s also easy to see who has what responsibility to you. Most often it is a standard of suitability.  Fiduciary responsibility is reserved for registered investment advisors who must put your interests ahead of his/her own.  It’s important to know the difference so you know what you should expect from someone advising you on financial products.

So if you’re a baby boomer or senior thinking of getting some help on what to do next with your retirement savings, The AARP Retirement Survival Guide is worth a read.  It can help you ask smart questions and make you more knowledgeable about what really can help you reach your retirement goals.