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The Big Money Communication Gap Between Adult Children and Parents
Tweet Share on Facebook January 31, 2013 CommentWhen it comes to money, older parents might be pleasantly surprised to know how much their adult children look up to them, at least in terms of their skills at managing money and investments. For the most part, however, parents don't return the love, at least when it comes to money.
A new survey of parents and adult children, sponsored by Fidelity Investments, surveyed parents who were at least 55 and had $100,000 average annual household incomes and nearly $530,000 in assets. It then polled the parents' adult children, who had to be at least 30 years old. These adults turned out to have average household incomes of more than $127,000 a year but only about $80,000 in assets.
Fidelity found that children looked up to their parents' money skills. Nearly half of the adult children actually said their parents had made no financial mistakes. Parents, for their part, were not so charitable about their kids. Specifically, they said their children:
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Senior Employment Driven By Choice, Not Need
Tweet Share on Facebook January 29, 2013 CommentBy now, it has become accepted wisdom that the retirement dreams of older Americans, indeed their very ability to pay current living expenses, really took it on the chin during the recession and the collapses of investment values and the housing market. Certainly, in the case of household assets, the Federal Reserve's authoritative Consumer Finance Survey paints a story of big declines, driven largely by falling home values.
Against this backdrop, reports that more and more seniors are continuing to work seemed to also be a logical response to harder times. Retirement experts generally agree that extending a career is the best shot at an adequate retirement that many seniors have these days. This logic seems to be further confirmed by a recent U.S. Census Bureau report of a strong continuation in 2010 and 2011 of the trend toward extending careers.
Even as the recession's effect wears off and the economy slowly recovers, a rising percentage of seniors is continuing to report to work. More than 16 percent of people age 65 and older were still in the labor force in 2010, up from about 12 percent in 1990. And among those ages 65 to 69, more than 30 percent are still working or seeking work.
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Surge in Older Workers Continues
Tweet Share on Facebook January 28, 2013 CommentThe impact of older workers continues to increase, according to new U.S. Census Bureau data. People over age 65 are becoming a larger share of the population, and more of them are choosing to keep working.
Nearly 1 in 8 Americans is now at least 65 years old, and the Census Bureau projects they will account for more than 1 in 5 people in the United States by 2040. The total could be even larger if a recession-induced reduction in new births continues.
[Read: Quick and Simple Tips for Baby Boomers on the Job Hunt.]
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7 Key Issues for Seniors in 2013
Tweet Share on Facebook January 25, 2013 CommentThe Congressional Cold War is in recess. Republican willingness to avoid a debt-ceiling fight for a few months has cleared the way for other activities. And while it's doubtful today's governmental glasnost will last very long, even a brief period of detente is welcome. For starters, it's forced the Twitterati to focus on other monumental issues, such as whether or not Beyoncé lip-synced her Inaugural performance.
It has also provided breathing room to the main combatants squabbling over key retirement issues. However, they will be spending the next several weeks sharpening their arguments and their rhetorical axes. Here are seven issues where the trench warfare could be especially brutal:
1. Should Social Security be included in the broader deficit debate? Social Security is spending more than it takes in, but not if you include interest on a special series of government bonds that were issued in exchange for the nearly $3 trillion current surplus in the Social Security trust fund. Of course, Congress spent that $3 trillion, and forking over the interest does boost the federal deficit.
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What You Need to Know About Palliative Care
Tweet Share on Facebook January 23, 2013 CommentEven the healthiest senior may eventually face serious illness and, of course, death. Seniors know this, and so do their family members and other loved ones. Despite this certainty, we are seldom prepared for late-stage and end-of-life illnesses. And we are even less comfortable talking about them.
Done right, palliative care is an enormous game-changer. It brings openness and fresh air to these topics. It can deliver a range of medical, psychological, social-support, and even spiritual services to patients and family members. It can provide all these resources without costing more money and, in some cases, can even save money by helping people receive care in their homes and not in more costly hospitals. Ideally, it should be available for a broad range of serious but not necessarily life-threatening health conditions.
Most importantly, palliative care and hospice, for those who are near the end of life, have been proven to extend lives and improve the quality of the time remaining for patients and their families. Further, we know what works and how to provide this care. Odds are, however, you have never heard of palliative care or if you have, you aren't really sure what it means.
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Working Longer: Still the Best Path to a Better Retirement
Tweet Share on Facebook January 22, 2013 CommentToday, of course, employers are in the driver's seat when it comes to finding a job. Millions of people have been out of work for a long period of time. For older workers in particular, it's especially tough to find a new job. There will come a day, however, when the equation shifts. As this happens, employers will find older employees grateful for the chance to work. Seniors who find themselves in demand will also be looking for different types of job opportunities, including seasonal, "on-again-off-again" jobs and those that offer telecommuting and flexible hours.
What won't change is the widespread thinking that working past the traditional retirement age is not a choice but a necessity. If anything, the trend will become stronger, due to the slowness of the recovery and the growing prospect for deficit cuts that include a haircut for senior government benefits.
"Delaying retirement is often viewed as the surest route to financial security in old age," according to the Urban Institute, a Washington think tank. "By working longer and earning more, older workers can accumulate additional Social Security, boost savings, and shrink the period their retirement savings must fund. Employment at older ages also expands the nation's labor pool, accelerating productivity, increasing national income, and raising living standards for both workers and retirees."
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How Healthcare Spending May Derail Your Retirement
Tweet Share on Facebook January 18, 2013 CommentNo doubt you've read about the ability of unanticipated healthcare costs to decimate your retirement. We never think it will be us or a family member facing such misfortune. And even if we think we're good planners, it turns out that we consistently underestimate the costs of unforeseen medical problems.
Now, a major research effort by AARP provides projections on the size of medical bills that may await you. The big seniors' group launched a major project this week to support efforts to help reverse the economic damage experienced during the past several decades by the middle class, or what's left of it. As part of the effort, AARP commissioned nine studies on the major financial challenges facing middle-class consumers of all ages.
One of these studies deals in great detail with healthcare costs. We all know they are huge, that one of the objectives of Obamacare is to help control healthcare inflation, and that Congress will be wrestling with the same challenge for years. The AARP study looks past these soundbite headlines to examine in detail the portion of future healthcare costs that won't be covered by insurance or other benefits.
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How Generations Can Thrive Under the Same Roof
Tweet Share on Facebook January 16, 2013 CommentPutting three generations under one roof—the most common multigenerational living arrangement—became a growth industry during the recession. As the economy and housing markets steadily if slowly recover, the financial stresses driving this trend will recede. However, the personal and social benefits of expanded living arrangements can be enormously positive lifestyle developments for some families, particularly in an aging society.
Before World War II, about 25 percent of Americans lived in multigenerational households. After the war, rising affluence and a mobile society led to a steady decline. "In 2008, an estimated 49 million Americans, or 16 percent of the total U.S. population, lived in a family household that contained at least two adult generations or a grandparent and at least one other generation," according to the Pew Research Center. "In 1980, this figure was just 28 million, or 12 percent of the population."
"Back in the 1940s and 1950s, the common advice was to cut what was called 'the silver cord,'" says Stephanie Coontz, a professor of history and family studies at The Evergreen State College in Olympia, Wash. "Don't take your parents in, experts warned. Don't even remain very close to them. Focus on your own nuclear families."
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AARP Maps Fight to Rebuild Middle Class
Tweet Share on Facebook January 15, 2013 CommentAARP announced a major policy and research initiative Tuesday drawing attention to the economic decline of the American middle class. In the run-up to what will surely be a bruising Congressional battle over Medicare, Medicaid, Social Security, and other federal benefit programs, the powerful seniors' group said it would push for strengthened supports for all generations.
Calling the declining fortunes of the middle class the new "impossible American dream," AARP CEO A. Barry Rand said the organization's Middle Class Security Project would target the five needs that Americans have identified as crucial to people being part of the middle class and securing their future well-being.
Citing public polling from the Pew Research Center, Rand said those things are:
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Why Aren't You Raising Your Financial IQ?
Tweet Share on Facebook January 14, 2013 CommentLiving a better and longer life is not a spectator sport but an on-the-field contest where the best players win big. Sure, there is some luck involved. But as with sports, the good players are prepared to take greatest advantage of their breaks. Winning is not some accidental outcome but the result of hard work and preparation.
In the game of life, an overwhelming and growing body of research finds that education is by far the most significant variable explaining who plays the game well and who doesn't. Within these broad findings, it turns out that financial literacy is likewise connected to better financial and investing decisions and the accumulation of larger amounts of wealth.
This near certainty is crucial in looking at the retirement challenges that individual Americans face. These individual stories—insufficient savings, poor investment choices, and weak retirement planning—have in turn become growing national issues.
