Last month I was contacted by Kira Reginato, an elder-care management specialist and host of a weekly radio program in Santa Rosa, California. She’d come across an article I did for MSN Money called “Are you your parents’ ATM?”
Reginato invited me to be on her program, “Call Kira About Aging,” to talk about this very sensitive issue. If you’d like to hear the result, you can access the podcast here.
No time to listen? Let me give you a few of the highlights, starting with some frightening stats regarding folks currently in their 40s and 50s. According to the Pew Research Center:
- 27% provide primary support for a grown child.
- 21% have provided financial support to a parent aged 65 or older in the past year.
- 38% say both their grown children and their parents rely on them for emotional support.
Anybody but me think that sounds not only emotionally but financially exhausting?
Specifically: If you’re helping out parents whose money isn’t stretching far enough and/or picking up the slack for your under- or unemployed kids, what happens to your own finances?
The rate of bankruptcy filings among those ages 65 or older has more than doubled since 1991, according to a study from the AARP Policy Research Institute. Before you go off on the Baby Boomers and their profligate ways, consider these possible contributing factors:
- Some people invested wisely for retirement yet watched their funds shrivel during the downturn.
- Others were downsized late in their careers and went through most of their assets just to survive.
- Remember that “primary support for a grown child” thing? Raise your hand if you know of someone whose kid(s) never quite flew the coop.
- Women live longer than men but earn less and are more likely to take time out of the workplace to raise children or care for their parents.
- Perhaps they did save for retirement but didn’t/couldn’t imagine how much they’d need for unexpected expenses (especially the ones that accompany serious illness).
- Some people never learned smart money practices, and now it’s coming back to haunt them.
About that last: It could also be that your folks were shortsighted or foolish when it came to retirement planning. Maybe that was part of a lifelong pattern of laziness or mooching off whoever would open his wallet.
Are you legally obligated to help? Maybe
Suppose your parents were a couple of grasshoppers who sang and danced their way through life and now, in their golden years, expect you to pony up. Here’s where it gets interesting: 29 states have “filial responsibility laws” that require offspring to provide for their indigent folks.
These laws are rarely enforced, but some speculate that authorities could start invoking these laws to save on Medicaid expenses.
Can they actually make you pay? Depends on where you live: According to the National Center for Policy Analysis, 21 states allow a civil court action to obtain financial support or cost recovery, 12 states impose criminal penalties on children who do not support their parents, and three states allow both civil and criminal actions.
It’s not likely that your parents will look for pro bono representation and sue you if you won’t help with the taxes on their timeshare. But if they ask for help of any kind, don’t just dole out the cash – ask for a look at their finances.
It’s likely they’ll resist, saying that it’s none of your business. But the moment they ask you for help it becomes your business. If you don’t know what you’re dealing with you can’t make smart decisions.
Suppose you prop them up financially for months (or, heaven forbid, years) only to find out that their outgo greatly exceeds their income. They’ll wind up having to sell the house or file for bankruptcy anyway, and you’ll be out thousands of dollars that could have gone toward legal fees or getting settled in a smaller place.
Hard to say ‘no’
The first thing you should do is create a budget of their most basic needs and compare it to all income sources. If those needs aren’t being covered, several options can be considered:
- Getting a more manageable place to live, or having someone move in to share expenses (obviously you’d want to be very careful who you let move in – maybe a trusted relative).
- Considering whether to let them move in with you (this is a very delicate situation and you need to think it through pretty thoroughly).
- Getting together with siblings (if any) to chip in a certain amount each month.
- Helping them apply for aid such as food stamps or prescription drug assistance.
- Looking for services and breaks such as senior rides or property tax discounts.
I can’t emphasize this part strongly enough: While you should acknowledge how hard it must have been for them to ask, you should never make a loan you cannot afford.
It is very, very hard to say no. If you do say “yes,” it should hinge on your parents creating a workable budget. No one is suggesting that you should let your parents freeze in the dark. Tact and compassion are called for, of course.
But so is realism. You might have to be mature enough to acknowledge that you can’t afford to make a big enough difference. That would mean it’s time for them to rethink where they live and how they live.
If you feel yourself wavering, remember this: For plenty of people, the retirement they plan is the only retirement they’re going to get. Fewer and fewer companies have pension plans (and pension plans have been known to collapse).
You must put on your own oxygen mask first, lest you leave your own kids in the uncomfortable position you are facing. Do what you can for your parents, but also require them to be part of the solution. That could mean their having to make some hard, hard choices.
Don’t expect that this will be easy. Just necessary.
Related reading:
Along the same lines, I’m seeing an increase in college students using their loans to help pay the bills at home. (I work in financial aid at a private, liberal arts university.) One of the best student assistants in our office will graduate this fall, and can’t wait to find a job so she can help support her parents, who are both on disability. My heart breaks for this young woman – barely into her 20s and already has such huge commitments. When will she get to live her life? And save for her future? It’s a sad state of affairs.
Sorry for hijacking the main theme of your post!
That is not just sad, but also scary…I hope she starts an IRA, at least, and automates the contributions. You can’t spend it if you don’t have it.
The idea of using loans to help pay the bills at home is even scarier.
Thanks for reading, and for leaving a comment.
This struck a nerve. MIL was in assisted living and after a few false starts she’s happily acclimated to living with our young niece who is caring for MIL,2 young children while going to college part time.
Since each family paid some $$$ to help with MIL’s assisted living expenses, my family will be paying an equivalent to niece to assist her with her college expenses toward her teaching degree. My SIL has been paying some of mom’s expenses for years.
MIL made some terrible financial decisions after her mid-life divorce which left her penniless. She developed medical problems in her 50’s and keeping up with her financial needs has been a strain on 2 households since she hasn’t held a job since she was 55 and had no income for around 7 years until her social security kicked in.
An added problem is a mercurial SIL who is predicting her student daughter will drop out of college; an event my husband and I are hoping will not happen. We don’t want to see this hard-working young lady fail while she stepped up to the huge responsibility of caring for MIL!
We love MIL so much but in my heart I wish she would have planned for her old age even a little bit!
My immediate family is in good financial shape because I am frugal and a very careful spender, despite the financial strain of obligations to other family members, including a token amount sent to my mom in another state.
You’re wise to consider your own non-earning years. Consider MIL an object lesson — and here’s hoping your niece does, too. Get that degree! I’m in awe of her ability to take care of kids and an elder and still go to school.
My parents are getting up their in age and as their retirement account suffered a hit a couple years ago we have already planned that I will be moving “in” with them in a couple years to help out by paying rent. Luckily “in” still means I will have a separate apartment with my own personal space above a detached garage. I already told her if she misbehaves (annoys me!) I will make her take the bacon for a walk, it’s bear country. <-my family's sense of humor 🙂
her being my mother 😛
It’s good that you’ll have your own space. Familiarity does breed contempt. It really does.
But how nice of you to want to help in this way.
They have been called the “Sandwich Generation” – Sandwiched between aging parents that need support and their own kids who need another kind of support, well, not to mention their own lives. No way around it, tough decisions will and have to be made if they are to come out unscathed.
Thanks for such a timely article on a subject that that hits so many. DW and I are members of the “sandwich” generation that are caught between the needs of aging parents and the needs of our children. We are blessed with children that seem to be fine…but the parents make up for it…The emotional and financial toll can be significant. I have heard the phrase you quoted …”it’s none of your business”….more times than I can count. The expectation is that we will “fix” things and not offer or insist upon change. This is difficult and I’m sure we are not alone. Thanks once again for a goood article…
This is a topic near and dear to me as we deal with the poor financial decisions made by my MIL… we have tried to help her make some better choices in regards to her living situation and have tried to help her make better financial decisions, but she does not seem to want (or appreciate) advice – she only wants us to give her money to fix today’s problem instead of working on the long-term fix (where she wouldn’t be dependent on family). We simply cannot afford to help her, and she cannot understand that our immediate family has to come first. It’s heartbreaking to watch someone struggle, but we’re not willing to sacrifice our future simply because she didn’t prepare for hers.
Thank you for saying what most of us feel as we are sandwiched between our older and younger family members during this latest rough economic time…that dealing with your own financial and emotional issues AND with their issues IS emotionally as well as financially taxing. I cope by trying my best to follow a simple daily mantra: eat healthfully, exercise mindfully, practice frugality, and follow a spiritual path and know that many others have it far worse than I do. And, oh yes, this too shall pass 🙂
I sigh a little when I think about what the future probably holds for me & my husband. My in-laws have made decent money for most of their lives, but they’ve always spent it as fast as they made it. They’ve acknowledged their retirement is woefully underfunded, but my FIL’s only plan to deal with it is by “working until I’m dead.” Given that his aging is starting to affect his health & performance (even though he’s not 60 yet) I am not very optimistic about his prospects. What’s worse is that he’s completely ignoring the fact that my MIL is starting to slow down too and she earns too little to support herself if he dies first – or worse, if he is unemployed/disabled so TWO people are depending on her tiny income. My husband and I are saving to buy a house, and we are seriously considering buying a house with a MIL apartment or at least an extra bedroom for the inevitable need. It makes me very grateful that my own parents have a modest-but-guaranteed retirement income and MUCH more realistic expectations for their aging & end-of-life plans!
Oh boy. People who say “I’ll just never retire” really ARE whistling past the graveyard. For starters, they are ignoring the fact that they might not be able to work past a certain age, either due to serious health issues or just the cumulative effect of 50 years of employment. Or that they might get laid off. Or that they might need to retire to take care of a seriously ill/frail partner.
My daughter’s in-laws went bankrupt in their late 50s due to a combination of unemployment, serious health issues and, yeah, some not-smart spending during their working years. It was her idea to have them move in — but only if they could buy a house with a MIL apartment. They call them “guest houses” in Phoenix, and they did find such a place. But the adjustment hasn’t been exactly seamless (for anybody). She writes about it from time to time on her site, IPickUpPennies.net.
Good luck — and if I were you, I’d start looking for books/articles on the topic now, so you know what sorts of issues you might be facing.
Thanks for reading, and for leaving a comment.
In a perfect world, parents and their grown children would be financially independent. My husband and I are doing our part and have had no need to ask for any assistance from our grown children since we are still in our 50’s. I hope I never have to ask for anything. It does seem a bit one sided though, if you think about it. Parents that raised children and fed and clothed them (and many of us spoiled them), and now those same children are terrified they may have to help their parents in any way. In addition, in my situation, I am expected to babysit for free, at the drop of a hat. And expected to give generously of all we have, which we do because this is family.
Just giving another perspective and something to think about for those in younger generation who are pulling in the big paycheck right now, stashing it away. Who helped you get through college?
You can do something about being “expected” to babysit: You can say, “No.” Or at least, “I can take the kids for one or two nights a month, but then there are other things I need/want to do.”
Perhaps their assumption that you’re available at the drop of a hat is a result of your parenthetical observation about spoiling your kids: They think you have nothing better to do than to cater to their needs, never considering that you might have other things to do. (Even if that’s just lying around reading a favorite author.)
And no, I don’t think it’s one-sided. Parents are supposed to raise their children with care and provide for their basic needs. In this culture at least, you do it because it’s the right thing to do, not so that you can play the “After all I did for you….!” card later on.
It was very nice of you to help them through college. That was a loving gesture and made a huge difference in their early adulthood, i.e., fewer (or no) student loans. (They may not appreciate the full impact until much later.) But did you specify that you would help them only if later on they would take care of you if necessary? I’m assuming not. My guess is that you wanted what was best for them.
If you do need help later I would hope that your kids will step up. But since this may or may not happen — and I’ve heard some horror stories — perhaps you should not give quite so generously. Make sure your own needs are amply provided for and that you have a plan in place should you or your husband become ill or unable to work.
Our kids are not our insurance plans. They have their own lives to live and are facing financial pressures we cannot truly understand because we came up in a different (read: cheaper) era.
Thank you soo much for this!!! Amen!! My extremely codependent mother and narsastic father are expecting me and my husband to take them in when all hell breaks lose just because they made bad financial decisions. Yes they fed us, yes they cared for us, yes they loved us, but no they did not ever teach us to drive, teach us about bills, pay for any colleges, never bought us a car, never put us on their insurance as teens and in our young 20s when we started having jobs (mind you we never asked them to do any of those things). However my parents REFUSE to downsize and move out of their 2240 sft home to a senior apartment or small house and would rather pay 1500 a month on a mortgage while filing BK , a car that will die any day now, and ask us for help!! (I kid you not- none of me or my sisters could ever ask them for money becayse when we were younger they always had some excuse to why they cant afford it even while affording to buy cartons of ciggs every week). They both dont plan for anything cause they just assume they can move in with me and my family last min and thats not going to happen!! My mother is extremely emotionally exhausting and codependant and my dad does nothing but watch fox news all day and yells about politics. We will help them find a place and help them move but no way will we co sign or let them move in. You have kids because you WANT to. You dont have them only to expect them to be your caretakers or emotionally cartaking therapist. We will never put pressure on our children to make them feel that they “owe us” just because we gave birth. I love my parents but i will not sacrifice my own life or my childs life just because my parents made bad decisions in life and refuse to do any planning or take care of their health.
I wish you luck, because I think you’re going to need it. The drama will ratchet up hugely once it becomes clear you will no longer bail them out. Keep reminding yourself that you have your own kids to care for — and, just as important, your own retirement to plan.
Thanks for reading, and for leaving a comment.
I wanted to add that I once heard someone say “your only job as a parent is to teach your child how to survive in life and the real world. They are not an investment nor a pawn to be used later in life. If you are not preparing your children to survive the real world you’re not doing the right thing.” Being a mom i understand the “empty nest syndrome” will come. But my mother had this weird idea that all of us would just stay and live dependant on her so she can live dependant on us later in life. ANY time we ever spoke about moving out or moving out of state it was like walking on eggshells because she would give the most awful guilt trips ever!! Again i love my parents but people have to understand that we are not extensions of our parents. We cant always live through their dreams. We cant always do what our great grandparenta did by taking in our elderly parents. Times have changed, pensions hardly exisit now these days. Were lucky if WE even get to live on social security when we are older. Jobs are not as secure as they once were. The boomers somehow have this entitlement personality. Taking in elderly parents are not the same as taking care of a new born baby. Elderly care usually is best for professionals. Most adult children cannt afford in home care and canot afford to pay it nowadays. Most adult children are guilt tripped by society assuming we are just supposrd to accept suffering and financial disaster to sacrafice our own lives (esp daughters) which society and the Elites created by design because when you are poor its easier to control you. Instead of reliing on doctors and toxic pharmaceutical drugs maybe the boomers need to take their health into their own hands. We are being poisoned by the food we eat. If elderly parents dont plan ahead of time and only expect their adult children to take care of them they are delusional in a world of chaos where healthcare is really “sickcare” and jobs are becomming scarce. Its interesting how parents want the best for their children but expect them to suffer and deal with it just because their parents made bad decisions.
Sarah, I have just read your comments on elderly care. I found your comments very insightful, do you mind giving us an update on how things are now? I am planning on reducing my monthly financial contribution to elderly parents who refuse to downsize or reduce their speonding during this tough economic period – I suspect that “all hell is going to break lose.”