Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Archive for March 2010

Health Care Reform: What’s in it for Sandwich Generation?

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Now that the maneuvering and rhetoric is dying down (sort of), we’re trying to figure out what health care reform will mean to us – personally.  And for most of us, there just isn’t enough information yet to understand what it will mean to our cost of health insurance or our kids.  

But there are a couple of provisions for the sandwich generation that look to have an immediate impact on older and younger generations.  If you are looking for a good summary of the highlights of the law, try these “explainer” articles from Kaiser Health News.

 Getting young adults health insurance – dependent coverage for adult children up to age 26 for all individual and group policies.  Lot’s of young adults are without health insurance as they were forced to roll off their parents policy and yet to land a job with health insurance benefits.  This give families with insurance a bit of peace of mind as those young adults find work with benefits (hopefully soon).

 Closing the Part D doughnut hole – On the other side of the “sandwich” is Medicare beneficiaries.   There’s good news for those with Part D prescription drug coverage who find they drop into the doughnut hole and facing the full expense of prescription drugs while also paying insurance premiums. If you’ve every helped someone choose a Part D plan or decipher what gets covered or not covered, you know what I mean. 

The law begins to phase out the doughnut hole in 2011 as well as require pharmaceutical manufacturers to provide a 50% discount on bran-name prescriptions filled in the coverage gap. 

This year, those falling into the doughnut hole will receive a $250 rebate.  No word yet on how it will be implemented but it’s welcome relief for Part D participants. 

Long-term Care – A government long-term care insurance program (referred to as CLASS- Community Living Assistance services and supports) was rolled into the bill and got little attention amidst the bigger issues. No details yet on how it will work or how much it will cost workers (it will generally be offered through employers and provides a minimal level of benefit ($50-$75 per day), but it gives hope to those who can’t qualify for long-term care insurance that there is a way to buy some protection against long-term care costs.  I’ll cover this more in a future post.  If you’re interested in reading more, this is a good summary from the American Association for Long-term Care Insurance (AALTCI)  

Over the next several weeks, I’ll be providing more information on what’s in the health care reform bill and how it impacts the sandwich generation. For baby boomers  planning for retirement, understanding health care costs in the future will be critical to figuring out how much money you’ll need.  A recent survey from Fidelity Investments says a 65-year-old couple today should have $250,000 socked away for health care costs in retirement –not counting long-term care costs.

 If there is something in the health care reform bill you’d particularlypleased about or would  like to hear more about, post it here.


Teaching Kids, and Ourselves, About Money

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Money Saving Lessons


The Great Recession has been a tough teacher about savings, spending and debt.  

For some of us the lessons are coming a bit late in life which means we’re scrambling to figure out how to fix up our money mistakes. (answer: work longer).  

But what about today’s kids?  Are there things we can be teaching them about money so they won’t make some of the mistakes we made?  

Today’s kids know we’re in a recession, according to a recent study by American Express. 71% of parents with children ages six to 16 say their children understand we’re in a recession.  And 91% say they are committed to instilling lessons of financial responsibility upon their children.  And probably themselves as well.  

Here are the 3 top lessons: 

  • Understanding of debt and its impact on saving and spending (30%).
  • Teaching the value of a dollar through reward systems like an allowance (25%).
  • The basic teaching of how money is earned and used in everyday life (21%).  

Good ideas all. 

But I’d add high on the list –being a role model for saving and spending.  For their financial learning but also for our own financial future.  

And that applies not just to young children, but young adults who have been brought up in a period of “see it, buy it.”  It’s a critical time for them to be establishing smart behaviors in spending and saving.  Since we anticipate the road to retirement for them will be filled with bigger tax bills and less reliance on government programs such as Social Security and Medicare.  

Indicators are that many of us are slipping back into some of our not-so-healthy spending patterns.  “Frugal fatigue” is the way one study referred to our desire to break open the wallet for some “wants” rather than just “needs.”    

And while the economy and 401(k)s are picking up many baby boomers still have a long way to go to fund a secure retirement.  

A sign of the times 

Yesterday, when I was out walking the dog (golden retriever with distinguished premature gray face), a man and his daughter stopped to ask if I would be interested in some free “senior” dog food.  Their dog had recently passed away and they had a whole new bag of food.  “Hate to throw it away,” he said.  “Just not right in these times,” he said to both his daughter and I.   We traded dog stories for a while, then off I walked wondering if that would have happened before the recession. 

So while we’re teaching our kids or grandchildren about money and value , let’s also remember to do as we teach.

Written by Laura Rossman

March 9, 2010 at 9:32 pm

Boomer Empty Nest Disappearing

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Moving Back Home

It seems like a lot of things that baby boomers were looking forward to not so many years ago are disappearing.  Just one more sing that the “great recession” has reset our expectation of retirement.

New research from says baby boomer women have moved from adjusting to the “empty nest” to running multi-generational boarding houses.

 According to the Vibrant Nation survey, Boomer women are dealing with a “Full Nest:”

  • 63% have an adult child living with them now (only 41% report ever having returned home to live as adults themselves) and most expect their adult child(ren) to remain with them for more than one year.
  • 27% have grandchildren living under the same roof.
  • 13% have parents or in-laws living with them as well.  

The cause?  No surprise that 70% blame the economy as the reason for this outcome. 

71% report that living in a multi-generational household makes it hard for them to achieve their personal goals.  Increased stress, more financial pressure, laundry, cooking.  Dollars planned to boost retirement accounts get diverted to current expenses. 

The empty nest is just one of the victims of the recession; add second homes and early retirement to that list.  A lot of baby boomers I speak with talk about “changed expectations.”

So, what do you do if your empty nest is filling back up?

1. Set down rules before they move in:  who does what, who pays for what. Don’t make assumptions.

2. Be realistic about the duration; but also mandate “check ins” on job hunting progress.  If it’s a young adult it may be a while before they can get on their feet and out on their own.  Almost 40% of that generation (20-29 year olds) is without jobs.

3. Be realistic about what this means for you.  If the dollars aren’t going into your retirement accounts as you expected, then you’ll have to keep working longer than you planned. Financial plans are meant to be revisited and adjusted.

And finally, be glad you can lend a hand.  The nest will be empty again.

Written by Laura Rossman

March 2, 2010 at 5:14 pm