Aging and Broke
By Dr. Beth Erickson
IntroductionMany older Americans are doing something they never would have imagined: turning to family for financial aid. Some are even asking their adult children for a place to live. The problem has been building as more Americans 55 or older lose their jobs or run through their savings faster than they expected, according to an article in a recent Wall Street Journal.
In this article, I will discuss this trend and some of the causes of this role reversal.
Thirty-nine percent of adults with parents age 65 and older report giving them financial aid in the last year, according to a September Pew Research Center Survey. However, some parents apparently may have trouble acknowledging it – 10 percent of parents 65 and older reported receiving financial aid.Eighteen percent of unemployed Americans 55 and older said they borrowed from family or friends other than their adult children, while one in 25 reported moving in with family or friends to save money, according to a December 2010 survey conducted by Rutgers University’s Heldrich Center for Workplace Development. Researchers haven’t measured the problem until recently because it wasn’t considered widespread.
One woman, age 60, worries about being a burden on her son. She moved into his home about a year ago. She lost her job in 2008 when the nonprofit she worked for lost its funding. Unable to find a job and facing both diabetes and rheumatoid arthritis, she used up her retirement savings and sold her home. For his part, her son says he expects her to remain with him permanently. He said, “I don’t relish the thought, but I am not going to sit there and watch my family members live in a van or anything like that.”
In 1900, 57 percent of adults 65 and older lived with their relatives, according to Pew Research. Because of Social Security, Medicare, and improving health and wealth, the rate declined to 17 percent by 1990. Now, it is up to 20 percent.Older adults are often the ones taking in struggling children, not the reverse. But people working to assist the elderly report seeing more and more cases where it’s the elderly who need assistance.
The typical American household with a retirement savings account is reaching retirement today with too little saved to maintain their standard of living, even with Social Security benefits, according to research conducted for the Wall Street Journal by Boston College’s Center for Retirement Research and the New York Life Insurance Co.Medical bills blasted some people’s savings, as did the financial collapses of 2000-2002 and 2008-2009. Sometimes, people simply mismanaged their money. The recent recession made matters worse, leaving many seniors jobless and forcing others to take pay cuts. Unemployment is heavier for the young, but older people are more likely to stay jobless for longer periods and eventually to give up looking.
“What we are seeing is older people having to borrow money, take money, move in with their kids, take rooms, and all kinds of things that aren’t normal or typical. It seems to be happening with increasing frequency,” said Mark Guterman, a career coach in San Francisco employed at a community agency that teaches work skills.
”Rightly or wrongly,” says Willard Freeman who is 58 of Portland, OR, “you don’t want to ask your younger sister for help. We borrowed enough to get through one month and we thought it would get better the following month. But it didn’t.” Now he has a job with an insurance agency. He is catching up on bills and gradually repaying relatives. But he can save little.
The Squeeze FolksThe situation can also stress adult children. They are taking care of college-aged kids who don’t have jobs and at the same time, they are taking care of their older parents. Cathy Brown, Executive Director of the Council on Aging in St. John’s County, FL, refers to these adult children as the bologna in the sandwich generation.
According to the Pew Research Center, just over 1 of every 8 Americans aged 40 to 60 is both raising a child and caring for a parent, in addition to between 7 to 10 million adults caring for their aging parents from a long distance. U.S. Census Bureau statistics indicate that the number of older Americans aged 65 or older will double by the year 2030, to over 70 million."This is an issue that's not going to go away," said Sandra Timmermann, executive director of the MetLife Mature Market Institute, which conducts aging research.
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Dr. Beth resides in Minneapolis, Minnesota, with her husband Paul, two cats and a dog. Marrying Paul made her grandmother of five and great-grandmother of one. Her primary hobbies are reading, painting watercolors, singing, keeping up with the news and playing with the animals.
Dr. Beth's passion is to bring out the best in people and help them transform their lives through key skills and appropriate attitudes in order to discover the best part of their lives.
© Dr. Beth Erickson 2012