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Analysis | Are you ready to take care of your Boomer parents?


Time to emphasize the boomer in boomerang. Millennials and younger Gen Xers are about to care for elderly parents who could soon boomerang into their homes.

This year, the oldest baby boomers will turn 77 and those born in 1964 (the end of the generation) will turn 59. It may seem early to warn that millennials should start strategizing how to care for their parents, but not so much if you look at life expectancy. For women in the US it is 79.1 years and for men it is 73.2 years, according to CDC data.

That means boomers are rapidly aging to a stage of life where they may need help or simply don’t want to live alone. And no one seems to want to talk about it. According to a recent survey by Wells Fargo and Ipsos, about 42% of Americans would rather discuss their parents’ funeral plans than their financial plans.

Frankly, that’s horrible. Failing to have frank conversations about a parent’s ability to retire or an adult child’s ability to support an aging parent can lead to financial disaster for all parties involved. This is especially true if the need to provide care is unexpected and there are no safeguards such as affordable housing, long-term care insurance or adequate health care coverage.

In 2021, approximately 48 million people provided unpaid care to an adult relative or friend; 80% of them made regular out-of-pocket expenses, with an average annual cost totaling $7,242, according to an AARP survey.

Before anyone gets to the point of providing care, it is important that parents and adult children have discussed what the future could and should look like.

Multi-generational homes are a cultural expectation around the world, but not necessarily the norm for American families. However, their economic environment – ​​or simply the reality of aging – can force boomer parents, adult children, their spouses and children to live together under one roof. It is critical that those without the cultural expectation of a multi-generational home begin to lay the framework for a harmonious dynamic. Step one? Candid conversations about financial realities and expectations. Step two? Lots of healthy boundaries.

Discussions should focus on how financially prepared a boomer parent is to retire. According to the Social Security Administration, the average monthly Social Security payment for retired employees as of November 2022 was just $1,677.52. That’s unlikely to cover living expenses for the majority of retirees, despite Social Security being the main source of income for many retirees.

According to the U.S. Census Bureau’s Survey of Income and Program Participation, in 2017, 49% of adults ages 55 to 66 had no personal retirement savings. While that’s an old figure, it’s hard to imagine much improvement given the pandemic, stock market volatility, inflation and the overall age of the demographic. Even if a parent has the added buffer of a defined benefit or defined contribution plan, it’s important to look at the numbers and determine if it will be enough to enable a retiree to meet basic needs and age with dignity. cover.

Unfortunately, many parents in this area seem reluctant to have a vulnerable conversation with their adult children. It’s understandable considering that a boomer parent could have worked hard all his life, done what he thought was right in terms of building a retirement fund and taking care of his family, and yet the treasury can still run out early. No one wants to feel shame or embarrassment.

Despite the inconvenience, it’s critical that parents and adult children have conversations about retirement and estate planning early, especially before an incendiary incident such as an accident or health problem occurs. Sharing expectations and planning ahead of time gives you time to prepare both financially and mentally for a future change. It is also worth investigating whether the care an adult child provides to a parent could entitle them to a tax credit for ‘other dependents’.

Adult children and elderly parents need to share financial information to determine the best way to provide care and support. Living together in a multi-generational household could alleviate some of the financial strain on both generations simply by consolidating resources. There is also the added benefit of helping each other with housework, raising children and eliminating the potential of social isolation.

However, just like living together for unmarried couples, consolidating resources does not necessarily mean combining. Both parties should discuss how they want bills prorated and paid and how they want to manage their finances after they move in together.

Creating a multi-generational household justifies setting new boundaries, especially around raising little ones. Essentially, the parents of the children set the rules to be followed by the grandparents.

Grandparents can certainly have their own boundaries, which include non-standard childcare providers, but they should have an open dialogue with their adult children about preferred parenting and discipline styles. An adult child may choose to age in a different way than how she was raised. It’s not an indictment of the grandparents’ parenting style, and it’s critical that the boomer parents don’t feel attacked or judged because their children choose to parent in a different way.

For their part, adult children need to be aware of the ways they are trying to educate their parents. Yes, parents get older and can reach points where they are physically or mentally unable to perform the tasks they once could, but infantilizing them isn’t the solution either. It is important to allow an aging parent to maintain autonomy and create an environment where as much freedom as possible can be allowed in a safe manner.

No matter how well a family functions, there are bound to be disagreements and awkward moments while creating a multi-generational household, or simply when trying to provide financial, physical, or emotional assistance to an aging parent. The goal is to create an ecosystem where both sides are respected and, dare I say, considered equals.

This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.

Erin Lowry is a Bloomberg Opinion columnist on personal finance. She is the author of the three-part “Broke Millennial” series.

More stories like this are available at bloomberg.com/opinion

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