Field Work

November 4, 2021

If you need help managing your finances in old age, it’s a lot of work to find someone – and not a very pleasant task to think about.

But it’s crucial that retirees plan for this. As to when or whether you might need help, it really depends on your individual circumstance.

Attorney and researcher Naomi Karp cites a variety of studies that provide some clues to the different ways this process can play out. People who develop dementia obviously need what she calls a financial advocate. This might be a trusted friend, family member, lawyer or professional financial adviser.

But roughly a third of aging Americans who are experiencing natural cognitive decline are prone to making poor decisions about their money, she explained during a recent webinar sponsored by the federal Consumer Financial Protection Bureau (CFPB) where she used to work.

Financial acumen actually peaks well before retirement – at 53! – but wisdom makes up for some of that, she said. During one’s 70s and 80s, financial literacy declines, but unfortunately confidence about one’s abilities remains high. “That’s a risky situation,” Karp said.

She and other financial experts have put together an interactive website – the Thinking Ahead Roadmap – with six steps to follow to find an advocate. Each step has tips, tools, and information to guide you through the process. An adult child or caregiver could also use this website if they feel the need to assume more responsibility for an elderly parent’s finances. …Learn More

Research

October 14, 2021

The magnitude of the tragedy is unfathomable: Americans have lost nearly 187,000 family members living in nursing homes to COVID-19.

Even when residents survive outbreaks in the facilities, their family caregivers experience trauma. Barred from visiting residents during the lockdowns, caregivers observed – on Zoom, over the phone, or from the other side of a nursing home window – loved ones suffering from the devastating impact of isolation.

“To think in her final year[s] when she is most vulnerable and most in need of love and support from her children and was denied this for 6 months is in my opinion devastating,” one caregiver said in a survey of 518 caregivers, the vast majority of them women and mainly daughters.

Granted, nursing homes – and the entire country – were not prepared for a once-in-a-century pandemic that has been difficult to control, given that COVID-19 is often asymptomatic. The lockdowns were a health precaution. Many nursing homes were also put in an untenable position when COVID-19 created staff shortages as nursing assistants and other workers took time off after contracting the disease or simply quit their jobs. And perhaps better communication between nursing home staff and family members would have eased some of the concerns.

Nevertheless, the caregivers’ perceptions of what unfolded inside nursing homes are alarming. “Anger,” “helplessness” and “heartbreak” were common reactions, conveyed in the survey compiled in the Journal of Aging & Social Policy.

The situation became so untenable for 30 of the caregivers surveyed that they pulled their parent or family member out of a facility and brought them home to live with them.

Four themes pervaded their descriptions of what their loved ones were going through: social isolation, cognitive and emotional decline, inhumane care, and a lack of oversight at the long-term care facilities.

The source of many caregivers’ concerns were nursing homes’ decisions to confine residents to their rooms to prevent contagion. But one caregiver said that while her mother’s facility went to great lengths to keep her healthy, the staff did little to ease her isolation: “Almost no effort has been made to ensure [her] mental health due to the isolation. Staff rarely stay and visit with Mom, no special in-room activities or stimulation has been attempted.” …Learn More

Research

May 25, 2021

Every year, older homeowners leave billions of dollars worth of the wealth locked up in their houses to their adult children.

This is a paradox if one considers that home equity is one of retirees’ primary assets and could be a crucial source of income for people who are “house rich and income poor.” Retirement experts searching for an explanation have long wondered whether the deceased had intended to leave the house to family or simply died before they were able to cash in on the equity and spend it.

A new study has an answer: retirees have every intention of letting family members inherit their homes. The people in the study who expressed a stronger desire to leave an inheritance of at least $10,000 were much less likely to sell their homes before they died – with the intention that the house would be part, if not all, of that inheritance.

The foundation for this study is a precise estimate of the housing decisions being made in the final two years of life from a survey of older Americans. The researchers counted as many people as possible, including the deceased – their final living status came from interviews with next of kin – as well as people who continued to be homeowners after going into hospice or a nursing home.

The homeownership rate in the older population peaks around age 70 and starts falling precipitously after 80. But when the elderly in the study died, about half of them still owned their homes, while the other half had sold them and moved into rental housing.

At younger ages, the retirees had been asked to estimate the probability, from 0 (no chance) to 100 (definitely), that they would leave a financial inheritance. Based on this information, the researchers found that those who had said they had a high probability of leaving an inheritance remained in their homes.

There is also a financial advantage to the owner of not selling the house to avoid the capital gains tax, especially if the price appreciated dramatically during their lifetimes. The researchers didn’t account for this incentive in their analysis.

But they did find that the desire to leave a bequest is so compelling that parents held on to their homes even after predicting they might need to pay for nursing home care within a few years. …Learn More

March 16, 2021

In 2015, the journal Pediatrics estimated some 3 million children were living with grandparents – and the number is certainly higher today. Grandparents find themselves in a caregiving role in the aftermath of parents’ myriad personal traumas, including opioid addiction, suicide, incarceration, and now COVID-19.

In this excellent PBS NewsHour video, “Grandfamilies,” grandparents tell journalist Stephanie Sy about the financial and emotional toll of caring for children. Despite the challenges, they wouldn’t have it any other way.

But the financial strain is real. Some of the people Sy interviewed said their childcare duties have forced them to close businesses, and others are earning less due to the pandemic.

Lisa Banks stretches herself thin helping each of her three grandchildren with their remote learning. The new members of her household have also increased the electricity and food bills – her two grandsons are teenagers. “It’s like, I’m hungry, I’m hungry, I’m hungry. You hear it all day,” said Banks, who gets food assistance from a non-profit on Sundays.

COVID-19 adds another layer of worries. Kim Elia, who is standing in for her 11-year-old granddaughter’s parents, is recovering from the disease. “I was truly afraid to die because of what would happen to Brooklyn,” she said.

Raising children is a big job for young adults. A second go-around late in life seems even harder. …Learn More

December 8, 2020

More than half of young adults are now living with their parents – the highest level in more than a century, according to the Pew Research Center.

This alarming statistic, first featured in a September blog, is the result of a long-term trend that has accelerated during the economic slowdown caused by COVID-19.

In this PBS NewsHour video by Catherine Rampell, young adults 24 to 39 years old who are taking refuge in their parents’ homes talked about their stalled social lives and disrupted careers – their disappointments always tinged with a sense of humor.

They include Marcellus Adams, who was laid off from two jobs, as an auto mechanic and emergency room staffer, and, at 29, has never really lived on his own. Eric Rivera moved from the height of chic – an apartment in the Williamsburg section of Brooklyn – to his parents’ home in a suburb of Trenton, New Jersey. And comedienne Nikki Glaser’s white-hot career suddenly cooled when her shows were canceled due to the pandemic.

They and millions of Millenials and members of Generation Z may pay a price for their setbacks in the form of lower earnings and unplanned-for career trajectories.

But a vaccine is coming, they are young, and they will persist.

Read our blog posts in our ongoing coverage of COVID-19. …Learn More