Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Archive for January 2010

Signs of Financial Help for the Sandwich Generation

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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.


Written by Laura Rossman

January 26, 2010 at 2:37 pm

More Physician Support for Caregivers Ahead?

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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?.

Written by Laura Rossman

January 25, 2010 at 9:50 pm

Watch Out for Roth IRA Predators

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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.


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?

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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.

Written by Laura Rossman

January 19, 2010 at 2:24 pm