Winston-Salem Business Magazine - January 2008 - (Page 26) Sandwich Generation Surviving The Financial Squeeze By Al Seymour ChFC , CLU , CRPC , CASL ® ® ® ™ , AEP Senior Financial Advisor As the oldest baby boomers reach their 60s and plan for their own retirement, millions are faced with the unexpected responsibility of caring for an aging parent. This life-changing new role can be emotionally draining and financially devastating. According to a survey released in 2005 by Campbell-Ewald Health, thirteen million baby boomers are caregivers for sick parents and are involved in every facet of their care. Many of these caregivers admit to feelings of frustration (45 percent), being overwhelmed (40 percent) and guilt (25 percent). Those simultaneously caring for children and parents are often called the “sandwich generation,” referring to those caught between multigenerational obligations. The number of baby boomers in the “sandwich generation” continues to grow due to a confluence of trends: life expectancies are longer than ever before; couples are starting their families later in life; and college students/graduates are living at home longer. Caregivers need to be proactive about developing financial strategies to secure their own retirement funds, long-term needs and quality of life. With some foresight and flexible planning, it is possible to ensure the security of all generations – even in the event of new and unexpected life changes. Following are a few things you can do to plan ahead and prepare for potential challenges if you find yourself in this situation. Initiate honest and open communication. Discussing money can be uncomfortable for many families. However, it is important to make sure everyone communicates their needs and desires. You’ll want to be sure to record your parents’ important medical, legal and financial information and keep it safe in the event your parents become unable to act on their own behalf. Details that should be documented include bank/ investment account information, real estate contracts, wills, funeral wishes, medical records, insurance policy details and contact information for all key advisors. You will also want to discuss using a durable power of attorney to transfer decision-making power should your parents find themselves unable to control their own affairs. Asking for power of attorney can be a delicate request, but it is essential for gaining control of your parents’ assets if necessary. Organize your parents’ estate. According to the Alzheimer ’s Association in 2006, the average lifetime cost of care for someone with Alzheimer’s is $174,000, with family members providing 75 percent of the care at an out-of-pocket expense of $19,000 a year. These are just average costs for one disease, but you can see how caring for an aging parent could wipe out your entire investment and savings portfolio. It is essential that people caring for both young and old family members take the time to address estate planning issues to ensure the financial security of all generations. In addition to power of attorney, make sure your parents have a will. This ensures your parents’ assets are distributed according to their wishes and may minimize the effect of taxes 26 JANUARY 2008
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