Things to consider to make the Golden years Golden. If you are part of the 75 million individuals who make up this nation’s population of baby boomers, you are probably familiar with the term “Sandwich Generation.” This term has come to mean adults who are either raising
minor children, or are providing financial and other forms of support to adult children as well as aging parents.
THE BABY BOOMER GENERATION —FAMILY TIES THAT BIND
Born between 1946 and 1964, baby boomers are a unique generation. Now in their 40s, 50s and 60s, and either approaching or just into retirement, many boomers are seeking resources that will help them plan or manage their own retirement, pay for their children’s college education and provide elder-care services for aging parents.
WHAT THE RESEARCH SHOWS
In a May 2007 study entitled, “Money Across Generations,” Ameriprise Financial worked with GFK Roper Public Affairs marketing research to conduct phone interviews with 1,001 affluent baby boomers in San Francisco, Miami, Denver and Dallas. The term “affluent” was defined as boomers with $100,000 or more of investable assets. The study was a strong wake-up call to boomers, who realized a lot more stress on their retirement savings than they had realized. Even though the children of boomers may have reached adulthood, boomers are still footing the bill. The study found that 92 percent, or nine out of 10, have helped their adult children financially in at least one way. Whether by helping their children pay off college loans, allowing them to move home and live rent free, paying off their credit-card debt or making mortgage payments, boomers are still paying their children’s bills. When asked where the money is coming from, 50 percent of affluent boomers say they are using day-to-day spending money, while 41 percent state they are using their savings. Only 6 percent report they are using their retirement savings.
This financial generosity also extends to aging parents. Pew Research Center reports that approximately 20 percent of boomers included in their survey are assisting parents financially. While generosity may be the hallmark of boomers, research indicates that the point where such giving intersects with their retirement savings is a potential blind spot. Have boomers saved sufficiently for retirement? Not according to published findings from the Employee Benefits Research Institute. The research reveals that retirement savings rates for boomers are too low, and many are overconfident in their ability to fund their retirement.
WHAT TO DO?
First, boomers need to run the numbers to make sure that they are on target or making necessary adjustments to have sufficient income for their retirement years. What next? Many, if not most, boomers are or will soon be assisting children and aging parents financially; thus these figures must be factored into the overall picture.
WHERE TO BEGIN?
We are still largely a culture of silence when it comes to the topic of money. Indeed, many boomers agree their parents rarely spoke about the topic of money, so the place to start is by having honest and open communication about financial needs.
CHILDREN, COLLEGE AND FINANCES
Preparing our children to be successful adults is a goal of most parents. With college costs at an all-time high, many parents are looking for ways to pay for higher education, whether it is through investments earmarked for college, College Savings Plans, loans, scholarships or work programs. Several resources are available that can help identify costs and available assistance. Two Web sites, www.collegeboard.com and www.finaid.org, provide college calculators to determine costs. To assess what financial aid may be available, visit www.fafsa.ed.gov. These resources will provide a good idea of what is available for your particular circumstance.
Specialists who advise the Sandwich Generation on their aging parents caution that when it comes to making decisions, the objective is to empower parents so they retain as much dignity, independence and control as possible. When assessing potential needs, experts stress the importance of getting all the facts. Talk to your parents about whether they have long-term-care insurance or enough savings to cover costs, should the need arise. This would also be a good time to make sure their personal papers are in order — wills, trusts, durable power of attorney, etc. With those items completed, it is a good time to check out available resources.
The Internet is a valuable resource for useful information. You may want to visit a few of the following Web sites:
• www.eldercare.gov — a site sponsored by the U.S. Administration on Aging
• www.benefitscheckup.org — provides information on federal, state and local benefits
• www.medicare.gov — a government site for people who qualify for Medicare
• www.seniorsresourceguide.com — provides an array of services and retirement communities available in the area.
Denver has many outstanding retirement communities, and one of the best-known is Park Place Retirement Community. This is part of the Heritage Club Senior Living Network, which includes three of Denver’s most respected retirement communities focused on independent living, personalized assisted living and Alzheimer’s and dementia care. Park Place residents can enjoy luxurious independent retirement apartments in beautiful surroundings while enjoying the ultimate in care and services. Wind Crest by Erickson provides fullservice retirement living that accommodates all levels of care. A full onsite medical center is staffed with board-certified physicians. A stroll through the spacious clubhouse reveals a fitness center, indoor pool, convenience store, library and two restaurants. The property is situated on a lush hillside overlooking the Front Range and downtown Denver skyline.
PUTTING IT ALL TOGETHER
Balancing priorities is not easy for boomers. Spreading financial resources across three generations can be a real challenge. According to Dr. Janice Wassel, director of the gerontology program at UNC Greensboro, boomers should be a little selfish and save for their own retirement. Talk to your children about finances, and share with them the preparation you have made for your own retirement. By having frank financial discussions about money today, you can help family members make smart money decisions as they navigate through their own lives toward their retirement.
Written by MICHELLE ONODA
Photography by JOHN MUELLER