money tree

Behavior

Can Caregivers Help Seniors with Money?

When once-simple financial tasks become difficult or confusing, it can be the canary in the coal mine signaling that an elderly person is developing dementia.

Financial problems will soon follow once people with cognitive impairment start miscalculating and missing payments, forgetting and misplacing accounts, or falling victim to fraud.

But some good news has come out of a new study of Medicare recipients: the vast majority of the 5.5 million people over 65 with established dementia – usually, though not, always Alzheimer’s disease – are receiving help from family and other caregivers with balancing their checkbooks, depositing and withdrawing money, and conducting transactions.

Even better, they are actually benefitting from it. The seniors who receive assistance are more likely to be able to pay for their essential expenses like rent, food, prescriptions and utilities, according to researchers at the Center for Retirement Research, which also sponsors this blog.

There was bad news in the report too: a nontrivial share of the older Americans with established dementia – that is, dementia for at least three years – aren’t getting any help. This problem is expected to grow in future generations. One major reason is longer and longer life spans, which exponentially increase the risk of dementia. Nearly one in three people over 85 are in some stage of dementia. Compounding this is the fact that today’s older workers have fewer children and have divorced more, which shrank the pool of who would be willing to pitch in and help them.

Having a caregiver helping with money management wouldn’t necessarily make an elderly person better off financially. Suppose a daughter is unfamiliar with her mother’s finances or a husband isn’t good at managing his own money. In extreme cases, caregivers sometimes steal from the trusting seniors in their care. Even so, it turns out that it’s better to receive help than not. …Learn More

On the Web

Dealing with Alzheimer’s in the Family

Caregiver in a nursing home can be grueling work, but my aunt loved it. In one of life’s cruel ironies, she died soon after retiring to take care of her husband, who is developing dementia.

The great responsibility for his care fell suddenly on his children and grandchildren, and they’re struggling with it.

I texted this video to a couple of my uncle’s daughters because it provides invaluable information and insight into the myriad causes of Alzheimer’s and the unique way its symptoms manifest in each individual. It also explains why diagnosis by a physician is critical – turns out, some people appear to have dementia, but the cause of their cognitive decline isn’t Alzheimer’s and may be reversible.

The speaker, Tammy Pozerycki, owns Pleasantries, which operates adult day care centers in the greater Boston area. In 1906, Dr. Alois Alzheimer, a brain researcher, first identified and described the disease. “It’s 2018, and we have no cure,” said Pozyercki. This places the burden on caregivers to manage the disease.

Full disclosure: her presentation was sponsored by Boston College’s human resources department for the benefit of employees. This blog is based at the Center for Retirement Research at Boston College.Learn More

aging parent

Behavior

An Ever-Expanding Sandwich Generation

Two new “sandwich generations” are getting into the thick of things: Generation X and Millennials.

Baby boomers first latched onto this label as they juggled caring for their parents and children simultaneously.  With lifespans continuing to increase, the squeeze from parental caregiving is tightening among Gen-X and Millennials.

As baby boomers and their parents get older, all three generations are feeling the financial strain of this familial obligation, which people take on either because “it is what family has always done” or “there was no other option,” according to caregivers’ responses to Northwestern Mutual’s new annual survey of adults between the ages of 18 and 64.

A separate 2017 report, by the Center for Retirement Research, estimated that one in five people will, at some point in their lives, care for their elderly or ailing parents. They spend an average 77 hours per month assisting elderly parents with everything from simple activities like getting out of bed and taking medications to frequently driving them to doctors’ offices.

The largest group in Northwestern’s survey are adult children caring for parents. The other caregivers identified in the survey care for adults under 65 or children who are either ill or have special needs or disabilities – there were no questions in the survey about routine childrearing.

The major findings indicate that parental care has significant financial and lifestyle implications, which disproportionately affect women: …Learn More

Young and old women hugging

Behavior

Outsized Caregiving Duties for the Few

The value of the informal care provided to the nation’s elderly, often by adult children, exceeds $500 billion a year – more than double the price tag for the formal care of nursing homes and home health aides.

Only 6 percent of Americans are, at any given time, regularly helping parents who have deteriorating health or disabilities to perform their routine daily activities (and 17 percent will provide this care sometime during their lifetime). But a sliver of the population shoulders an inordinate amount of responsibility.

A study by Gal Wettstein and Alice Zulkarnain of the Center for Retirement Research finds that the
6 percent of adults providing parental care devote an average 77 hours to their duties each month, or roughly the equivalent of a full-time job for two weeks.

And the burden grows as adult offspring get older.  They found that 12 percent of 70-year-olds are caring for parents and spend, on average, 95 hours per month doing so, even though they’ve reached an age when they might be developing health issues of their own.  This remarkable situation is no doubt a result of both rising life expectancies for the elderly parents and improving health among their offspring, who are also aging but are nevertheless still able to provide care.

The study was based on data from a survey of older Americans that used the standard definition of care, which includes helping seniors with activities of daily living (known as ADLs), such as bathing, eating, and walking across a room, and includes instrumental activities of daily living (IADLs), such as taking medications, cooking, and managing finances.

For the half of seniors over 85 who require this assistance, informal family care is their first choice. Not surprisingly, nearly two-thirds of this care is done by spouses and daughters, especially unmarried daughters. But there are costs, in terms of money and work, as well as time.  Caregivers report that they spend more than one-third of their budgets on parental care. …Learn More

Dark tunnel

Behavior

In the Dark about Retirement?

There’s new evidence to remind us that nothing much changes: we are still baffled by our DIY retirement system.

And no wonder!

First, saving must start at a young age, when retirement is an abstraction. Saving is further stymied by two big questions: how much to save and how to invest it?  It’s also smart to anticipate how one’s compensation arc might affect Social Security – taking into account, for example, that women withdraw temporarily from the labor force to have children and that earnings can decline when workers hit their 50s.  As we fly past middle age and retirement appears on the horizon, it’s a little late to figure this retirement thing out.  And there’s no plan for long-term care when we’re very old.

The evidence: Start with Merrill Lynch’s new survey in which 81 percent of Americans do not know how much money they’ll need in retirement.  This makes it very difficult to know how much to deduct from one’s paycheck for retirement savings. Employers, frankly, could do more to help us figure this out. (Some answers appear at the end of this blog.)

Being in the dark now about how much to save is a cousin of being afraid of running out of money later, in retirement. More than 70 percent of accountants say this fear of running out is their clients’ top concern – followed by whether they can maintain their current lifestyle and afford medical care in retirement – according to the American Institute of Certified Public Accountants.

Our inclination to avoid difficult issues does not go away with age.  Yes, we’ve gotten wiser, but advanced old age means death, and who wants to think about that?

The upshot: seven in 10 adults have not planned for their own long-term care needs in the future, Northwestern Mutual reports.  Even among a smaller group who anticipate having to take care of an elderly parent, one in three of them “have taken no steps to plan” for their own care.

“You would think that would prompt them to action,” said Kamilah Williams-Kemp, Northwestern’s vice president of long-term care. And while the constant barrage of news and statistics is making Americans more aware of their rising longevity, Williams-Kemp said, caregivers are often more interested in talking about their emotional and physical challenges and the rewards of caregiving than about its substantial financial toll.

There is a “disconnect between general awareness and prompting people to take action,” she said.

The potential for dementia or diminished capacity late in life isn’t on our radar either, the survey of CPAs found: the vast majority of people either choose to ignore the issue, wait and react to it, or are confused.

Squared Away exists in part to educate people about retirement essentials, based on facts and high-quality research. The following blogs might help you:

How Much for the 401(k)? Depends. …Learn More

Woman at computer

Research

Managing Money with Cognitive Decline

Despite the normal cognitive challenges that people in their 70s and 80s inevitably face, most are sharp enough to be in charge of their financial affairs or oversee them.

But the significant minority of seniors who do have trouble is explored in a new summary of the research by Anek Belbase and Geoffrey Sanzenbacher at the Center for Retirement Research, which supports this blog.

One such group is people learning for the first time how to carry out financial tasks. Widows, not surprisingly, are often required to negotiate this financial learning curve, which gets steeper as a senior’s ability to process new information erodes. With guidance from a family member or professional, however, the novices can usually figure things out.

Seniors with mild cognitive impairment might also develop problems. Mild impairment becomes fairly common by the time people reach their 70s, affecting their financial judgment and potentially their ability to manage their affairs in ways that promote their best interests.  Among those with mild impairment, 82 percent can independently handle the various financial tasks they face, such as paying bills, managing bank accounts, and maintaining good credit.  This compares with 95 percent of unimpaired seniors.

Another danger facing seniors with mild cognitive impairment is their vulnerability to fraud.  They are usually aware they’re slipping, yet they may remain confident about their ability to handle their financial affairs. …Learn More

Rewriting Retirement Header Illustration

Behavior

Caring for Her Elderly Parents 24/7

Vivian Gibson

Taking care of her elderly parents is Vivian Gibson’s full-time job.

The last two weeks in October weren’t so unusual.  She tended to her 86-year-old father for several days in the hospital – another episode in his unending battle with ankle sores stemming from service in the Korean War. Gibson also helped her mother, age 81, get through a medical procedure and chauffeured both parents to more than a dozen doctor’s appointments and to their dentist. Her mother has been dealing with a pulled tooth, along with abnormal cells in her bladder and an abnormal EKG.

In addition to their medical needs, Gibson helps them with everything else, from cleaning and dressing her father’s wound daily to buying their groceries and cleaning up the yard.  Her parents live in Bartow in central Florida, about 20 minutes from Gibson’s home in the country, and she’s always on call in case her father falls again.

Yet she remains surprisingly upbeat, unfazed by a non-existent social life and a caregiving burden made heavier by the fact she is an only child. “There is never any respite,” she said. “I have to work my doctor’s appointments in around theirs. My mother keeps telling me, ‘Don’t get sick. You can’t get sick!’ ”

To help her parents, Gibson retired from a local hospital just shy of her 59th birthday.  She’s now 61 and premature retirement has strained, though not broken her financially.  She drained most of her $17,000 emergency fund to meet regular expenses and reluctantly dipped into her IRAs and past employers’ retirement savings plans. Her combined balance is down to $300,000 – or about $12,000 lighter than when she retired, despite a rising stock market. Her lifeline has been a $24,000 pension from her work in state government.

“I wanted to travel,” she said – Australia, New Zealand, Canada – “but I don’t have the money – or the time – for that.” …Learn More

Photo of mother and daughter

Behavior

Women Often Quit Work to Help Parents

Here’s just some of the evidence of the enormity of the challenge of caring for our elderly parents:

  • One in three baby boomer women cares for an elderly parent.
  • Even if they work, these caregivers devote anywhere from eight to 30 hours per week to that parent.
  • The estimated value of informal senior care provided by family members approaches $500 billion in this country – or double the amount spent on formal, paid care.

Caring for an elderly parent is usually done with love or out of a feeling of familial obligation. But there are real costs to taking on this responsibility, which most often lands squarely on a daughter’s shoulders. These costs could come in the form of lost wages and employer health insurance or in sacrifices of future pay raises or promotions. It’s also more difficult for older women to find a new job if they drop out of the labor force to help an ailing parent.

According to preliminary findings in a new study that used 20 years of data, taking care of a parent does significantly reduce the chances that women in their early 50s to early 60s are working.  Interestingly, the number of hours devoted to caring for a family member do not seem to affect women’s decisions about whether or not to work (though the researchers plan to revisit this finding).

But Sean Fahle of the State University of New York in Buffalo and Kathleen McGarry of UCLA said caregivers “may simply leave a job in order to provide care.”  Their paper was part of a series presented at the National Bureau of Economic Research this summer. …
Learn More

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