April 5, 2018
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
March 27, 2018
Boomers Do Retirement their Way
In the two years since starting a series of blogs, “Boomers: Rewriting Retirement,” I’ve profiled five willing baby boomers in various phases of retirement as they grapple with a variety of issues.
The individual profiles are again posted here, in the event one of them might be helpful to a reader who missed it the first time.
And we’re always looking for more guinea pigs, if anyone has an interesting story to tell!
Click on the links at the end of each headline:
- “A Familiar Dilemma: to Work or Retire.”
- “Finally retired. Now What?”
- “Caring for her elderly parents 24/7.”
- “The Ultimate in Travel: Retiring Abroad.”
March 20, 2018
New Use for College Loans: Spring Break!
Yup, more than half of college students are using some of their student loan money to pay for spring break.
It’s the peak season, and 21st century ingenuity is being applied to the age-old problem of paying for college trips to popular, sunny climates like Miami and Cabos San Lucas in Mexico’s Baja Peninsula. LendEdu decided to do a survey to answer a question that Mike Brown put so succinctly in his blog:
How can “so many students living on a shoestring budget afford to go on a not-so-cheap weeklong getaway”?
The mechanism allowing this can be found in college financial aid offices, which funnel loan money directly to students after, wisely, deducting tuition and fees.
Fifty-one percent of the students who were surveyed are financing their beer, hotels, and air fares with another popular source: parents. Spring break is typically paid for with whatever they can scrape together from parents, loans, and part-time jobs – frequently in that order.
LendEdu, a New Jersey credit card and student loan refinancing firm, hired Pollfish for its March survey of 1,000 college juniors nationwide who have student loans and are planning spring break 2018.
Brown is 24 and earned his University of Delaware degree in 2016. His parents paid for his Cancún trip during junior year, and he did not have to use his loans, which he’s still paying off.
“If my parents found out I was using that loan check to pay for spring break, they would’ve had a couple words with me,” he said.Learn More
March 15, 2018
Boomers are Longing to Retire Overseas
Australia, Cambodia, Laos, Thailand, Spain, Portugal, Scotland, Ecuador, Belize, Nicaragua – our readers living all over the world, or planning to, shared their experiences in comments posted to a February blog, “The Ultimate Travel: Retiring Abroad.”
The article profiled a Houston couple on the verge of retiring who are systematically exploring cities that interest them in Panama and Costa Rica. Few blogs have elicited so many comments – no doubt because thoughts of retiring overseas are more fun than worrying about whether the 401(k) account has enough money in it.
The success of retiree Dennis Desmond and his wife’s relocation to Australia makes it hard to resist temptation. “The weather here is incredible, the people are fantastically friendly, and the scenery is wonderful,” Desmond said in his comment.
But the picture isn’t all roses. William Pederson wrote in his comment that he knows five couples who’ve moved overseas and returned stateside. “You get what you pay for,” he said.
Here’s more of the fun stuff, and a few downsides, from our readers: …Learn More
March 13, 2018
Dreams of Retirement? Watch for Pitfalls
Early last year, a client who was a month away from retiring walked into Matthew Jackson’s office and asked him to manage his money. Then the client started pulling financial statements out of a folder and slid them across the desk.
“I’m excited for you,” Jackson recalled was his first reaction. “But let’s talk more about what you want to do with your money, rather than want you want to do for your money.”
The client “looked at me and then past me. In 4 or 5 seconds he said, ‘Matt I have no idea.’”
To prod others into weighing this critical question for themselves, Jackson wrote a book, “The Retirement Dreammaker: Master the Art of Retirement Abundance.”
And the dream maker is not Jackson – it’s you.
People facing impending retirement are about to hop on a wild ride that will take them from the emotional high of having the freedom to do whatever they like to an unfamiliar low: no job to give them purpose. Because of that, Jackson is on a mission to warn baby boomers they need to really prepare emotionally for retirement, just as they should prepare financially. (A financial planner turned financial coach, Jackson’s new book also includes a financial chapter.)
“The ultimate freedom is the freedom to follow your purpose,” he said in an interview.
Jackson’s goal in trying to help people who don’t prepare emotionally is not simple but boils down to this: he does not “pump people up – rah-rah.” He prefers to warn of the six retirement pitfalls: …Learn More
February 15, 2018
The Ultimate in Travel: Retiring Abroad
Tami Fincher dives into projects head first. Two years into a 5-year plan to retire early in Central America, her short list – so far – is Boca Chica and El Valle de Antón, in Panama, and Guanacaste Province, in northern Costa Rica.
She and husband Stephen Fincher are making their plans to join the growing number of Americans-turned-expatriate retirees. In 2016, more than 603,200 Social Security checks were mailed to retirees, their spouses and widows living abroad. They are moving as much for the adventure as for the lower cost many countries offer.
An exotic retirement isn’t for everyone. Even if they could save on living costs, people who’ve never been keen on international travel might prefer to remain close to home and grandchildren. But the baby boomer wave is pushing up the number of U.S. retirees living abroad – by 11 percent in five years, according to the U.S. Social Security Administration, which tracks its pension checks sent overseas. Ex-pat’s favorite countries include Japan, Mexico, France, Thailand, and Colombia. (More are listed on the next page.)
To assess the pros and cons of Costa Rica vs. Panama, the Finchers made their first exploratory trips, to Costa Rica last June for their 20th anniversary and to Panama over the New Year’s holiday. If Tami, age 53, has her way, they’ll retire in about three years and sell their Houston home to relocate. …Learn More
January 18, 2018
Half of Boomers Social Security Eligible
This milestone must be noted: about half of baby boomers are now over 62 and can claim their Social Security benefits.
The year 1955 was the midpoint for the post-World War II population explosion – and those boomers born in 1955 will turn 63 sometime this year.
This marks the time to take stock of differences between the old boomers (born 1946-1955) and young boomers (1956-1964). Of course, Social Security eligibility doesn’t automatically mean retirement, and boomers of all ages are retiring later than their parents. Today, only around a third of 62-year-olds file immediately for Social Security benefits – it was closer to half for the oldest boomers. The downward trend should continue.
But a yawning difference between the two boomer groups is their vastly different stages of life. Those born in the late 1950s and early 1960s are still working full-time. Entrenched in work, they have several years to go to retirement – their big challenge is having enough time to prepare financially.
The oldest boomers, now in their late 60s and early 70s, are already retired. They can take great joy in their grandchildren, which most have. That’s a comforting antidote to sobering thoughts like whether my financial affairs are in order (just in case), who will take care of me when I no longer can, and how do I want to spend my final years or days?
The good news is that baby boomers are healthier than any previous generation and will live longer. Old and young boomers still have lots to enjoy.Learn More