Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

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.

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Written by Laura Rossman

January 19, 2010 at 2:24 pm

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