Helping Your Parents Through Their Retirement

Helping Your Parents Through Their Retirement

In 1900, life expectancy at birth in the U.S. was 47 years. Now that number is closer to 80, and many of today’s children could live to see 100. But with an increase in longevity comes a growing need for longer care of the elderly. This means more and more Americans are falling into what Kiplinger calls the “sandwich generation,” where they may have to financially assist adult children and even grandchildren, but are also assisting their parents through retirement and these extended years of life. To help this in-between group juggle their financial assistance to family, Kiplinger suggests these tips to manage expenses while caring for parents:

Long-term care insurance is a must-have discussion. If your parents are healthy enough to qualify, helping them pay all or part of the premiums may safe-guard your savings from their health-care expenses in the future.

Consider adult day-care services. As much as you may want to quit your job to be able to care for your aging parents at home, doing so may drain thousands of dollars from your own needed savings. Instead, consider enrolling them in an adult day-care program while you work, or investigate home-health aides and nursing home options. Often these programs will keep them physically active and engaged in a community and will still allow you to work.

Research tax and employer benefits. If you pay for an adult day-care program or for someone to take care of your parents in your home, you may be eligible for dependent-care credits or other tax incentives. Some large employers may also offer care-giving support as an employee benefit or may have dependent-care flexible spending accounts you can contribute to.

With the first of the baby boomers having already reached retirement age in the past couple years and another 75 million to come, many in their midlife may find themselves balancing between financially helping their retiring parents and their grown children. If you or someone you know finds yourself trying to balance between the two while continuing to save for your own eventual retirement, contact your financial advisor for a consultation and review of your financial plan.

FINANCIAL FACTS

Sticky Debt – Americans at least age 40 hold 33 percent of the $966 billion of student loans outstanding nationwide as of Dec. 31, 2012 (source: New York Federal Reserve, BTN Research). 

You Can Leave Work Early – An average American worker has increased his or her productivity by 51 percent in the past 17 years, i.e., an average worker can complete in two hours (as of June 30, 2013), the same amount of work that it took him or her three hours to finish as of June 30, 1996 (source: Department of Labor, BTN Research). 

Please Sign Up – The White House has estimated that 2.7 million young people between the ages of 18-35 need to sign up for their insurance on the new health insurance marketplaces (to subsidize the higher expense of insuring older Americans), an average of 14,835 a day during the six month enrollment period that began Oct. 1, 2013 (source: Affordable Care Act, BTN Research).