Multigenerational families increasing in response to economy

Carol Forsloff - “We love having our grandchild right here so we can watch her grow up,” said Laura Tyler, in answer to how she feels about her daughter, son-in-law and two-year-old grandchild living with their parents in a small three bedroom home in Washington State, a response that more and more reflects what is happening with families in America.

Multigenerational families are increasing in response to the economy.  Altair Customer Intelligence,   a company involved in marketing research, has found multigenerational families now represent 14.4% of households in the United States.  20 million households have more than one generation represented in the family group, and four million of these represent three generations.

The fact that multigenerational families are developing at an increasing rate in the present economy means a different sort of marketing strategy to address family needs.  Issues regarding Medicare, long-term care, and senior needs as well as the concerns of infants and young children are now seen in families that would ordinarily be recent empty nesters of the baby boomer age.

“Isn’t it more stressful,” Tyler was asked about her extended family living.  “Sometimes it is, “Tyler explained, “But really the advantages weigh out the disadvantages for us.  We just feel closer and feel like we are able to help our children, which makes us feel good.  They add to our joy.”

For years historians have debated the American family structure and whether it was the extended family to the nuclear family, a pattern described by many.  New information from revisionists maintain family structure has been relatively unchanged and for the most part nuclear for centuries.   So this new increase in multigenerational living is a phenomenon that reveals the concerns of families today, as the format of the family changes depending upon the economic and social needs of any given time.  What most sociologists and anthropologists say is that whatever the type of family, during difficult times these are the people members reach out to during a crisis.

Legally Socialable, a features site concentrating on social and legal aspects of American life, quotes Frances Goldscheider, a Brown University sociologist, as saying this:  “We haven’t seen anything like this since the Depression,” said Frances Goldscheider, a Brown University sociologist who has studied families and living arrangements. “Overwhelmingly, it’s the recession’s effect on people’s ability to maintain a house. You have the foreclosures on one hand, and no jobs on the other. That’s a pretty double whammy.”…

But experts tell us it is more than the economical factors have increased a pre-existing trend as baby boomers care for aging parents and new immigrants from Hispanic and Asian communities arrive with a culture that has had a history of several generations under one roof.

Whatever the reason, the trend toward multigenerational households will have a political impact and social impact as well as one on business, as more and more people decide that the family unit is the safe place to find respite in the ongoing “storms” of unrest, concerns for an aging population and economic pain

Long-term care for elderly a growing crisis for American families

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The question is reasonable because even though financial planners advocate long-term care insurance, it’s likely if Grandpa has any real health problems he either won’t get it or will have premiums so high he will have to choose between eating at the present or having a nursing home bed in a decade.

The pitch for a sale sounds good from the insurance agent who gives all good reasons for buying long-term care and buying it early so premiums don’t become high.  Still there are enough exclusions to create barriers, even for the young adult.  These include using using certain medications over a period of time, for example prednisone, a drug that is recommended for a number of conditions, including asthma and arthritis. But many insurance companies will likely refuse, or seriously rate, the applicant with this situation.

Grandpa is 75. He has ocular myasthenia gravis, a condition that could or could not become systemic for many people, but not if the individual has had the condition for more than a couple of years. Grandpa was diagnosed three years ago and has no issues of balance or coordination that would imply a spread of the disorder beyond the ocular area. Still, Grandpa can’t get insurance from most insurance companies either because he takes prednisone (every four to six months for four to five days) or simply because of the diagnosis itself.

Lillian, a 60-year-old neighbor, is able to buy long-term care but has found it very expensive because she is a diabetic. The diabetes has been well controlled during the five years since her diagnosis, but the rating from a standard policy is 10% higher than others, making it unaffordable for her. Her insurance options are limited, with few companies willing to take Lillian as a customer among the number of companies available.

Medicare doesn’t cover long-term care, and as the recession has taken the savings and jobs of younger folk, the children might not have funds to help. Besides the numbers of baby boomers without children increase the problem as well, as more and more senior assistance centers won’t take Medicaid. This is even more likely to happen with the changes proposed by Republicans to slash Medicaid payments and raise the bar for qualification, as detailed by the American Association for Retired Persons who offer a synthesis of recent proposals.

The problem is made even more difficult by the fact that 40% of the elderly needing long-term care depend on Medicaid, which means the oldest and sickest of the group.   And that Medicaid only becomes available after the senior has exhausted virtually all of his/her assets. While the problem of what to do with the great numbers of seniors entering the health care system with complex diseases increased, politicians offer solutions that often don’t offer much hope. The liberal ones avoid the problem altogether, and the conservatives seem to say “tough luck.”  The problem, however, is anticipated to become very great with the growing number of seniors needing assistance. It is complicated because of the fact that middle and low income persons have less discretionary income for long-term care insurance or may not qualify for it.  Furthermore, the fact that the seniors must exhaust virtually all savings before using Medicaid creates problems for most people as the surviving spouse is virtually impoverished as well.

Some experts have recommended price-rewarded savings, now being used by some states to encourage savings. With this type of program, for every qualified portion of savings one receives a chance at a special prize, usually a substantial amount of money.

The options are few that seniors can use for long-term care as costs increase, restrictions develop and the number of users grows, but one of them is the senior community of people over 55 itself, where in many instances the more active of the group pitch in and help the others. This is true of the community of Ryderwood, for example, a town created for and by senior citizens, following its initial history as a loggers camp for families. As one elder recently said, “Who knows better what it takes to grow old and do it with dignity but people just like us?”

The problem is that because of age restrictions selling the property is said to be more difficult because the pool of buyers is limited. On the other hand, some folks say that the restrictions in many ways increase the number of buyers who seek that mutual support in lieu of assisted living seniors.

In the meantime as seniors explore options for care, the problems multiply as the typical caregiver, ordinarily other family members or children, are burdened with financial and physical demands from the lifestyle needed to keep up with the cost of living and the demands placed on growing families. In addition, there are many seniors who have either never had, lost children or have children with reduced capacity to act as caregivers in a crisis.

Potential solutions may develop as more and more seniors opt for community-based support. These include the Meals-on-Wheels programs, grocery store deliveries and home care assistance on a fee-for-service basis.

While seniors plan for the likely, experts say everyone should plan as early as possible for those declining years and then update those plans periodically as circumstances change. With the quarrel over “entitlements,” it is likely it may soon be time to change one’s plans again, as the changes are likely going to make long-term care more difficult and more expensive. Then what happens to Grandpa and Grandma when their options no longer exist?

The aging of the population and how it will change the world

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Carol Forsloff - In January 2011 the oldest of the baby boomers turned 65, with the first “shot over the cannon’ signaling a major shift in population that impacts the entire world,  while the US government labors over the budget crisis.

Early this year Richard Johnson of the Urban Institute answered five questions about aging and its impact on the future of the United States and the rest of the world.   He tells us at the outset that the problems of the growing numbers of elderly persons is a global problem.

13 percent of Americans are age 65 and over by January of 2011, with the percentage anticipated to be 16 percent by 2020 and by 2040 to 20 percent.  In the meantime birth rates are falling.

This means fewer young people to economically support in some way a larger and continually growing older segment of society.

.By 2020, that share will jump to just over 16 percent. By 2040, it'll top 20 percent. The graying of the population is really a worldwide phenomenon as birth rates fall and longevity increases.

Those who follow the Ayn Rand philosophy maintain that as long as producers are allowed total freedom of production free of government restraints, then social upheavals will be prevented as people seek prosperity.  Those who believe government should step in and take care of people who can’t take care of themselves represent another major philosophy, in opposition to the first.  These two extremes remain the ongoing debate in the major countries of the world, with the labels for representative factions changing as the politicians shift with popular opinions during economic crises.

The first world impact of aging has to do with how choices have to be made among groups needing assistance vs. the needs of the greater culture as a whole.  Infrastructure maintenance, education, energy and defense form a rival with what some refer to as entitlements.  The problem with the word entitlements itself has to do with it means to their beneficiaries, some of whom see Medicare and Social Security as funds maintained by those beneficiary contributions.  It was anticipated that when retirees reached age 65 there would be sufficient money to pay out those benefits.  That was the case in theory when the institutions were created.  The problem, however, is that by 2015 the system will be paying out more money than it takes in.  Furthermore it is estimated that by 2040 as much as 9/10 of the Federal budget will consist of Social Security, Medicare and Medicaid payouts.

At the same time by 2030 it is estimated the elderly will pay ¼ of their incomes on health care costs.

Johnson believes we need to make it easier for older workers to be employed by taking away the taxes on incomes of people who continue to work after age 62 and the artificial ceiling for retirement at age 65 created by the culture.  He believes the elderly have information and skills society needs, and that more members of that group should be employed.  He calls for training for older people, along with raising the Social Security retirement age.

But while Congress continues to debate raising the Social Security retirement age, Johnson also recommends that people delay taking the benefits themselves in order to increase the payouts that will continue to grow with the additional months and years.  He also observes that people should educate themselves about financial products and save for retirement.

The problems of long-term care and how to finance it are major obstacles for seniors all over the world, Johnson explains, although he has no real answers for the problem outside of additional savings along with research studies on patterns of saving of present pre-retirement groups.

In his discussion Johnson doesn’t examine the unpredictability of economic trends that impact senior incomes, just as government begins to decide on debt limits and entitlement adjustments.

In Portland, Oregon Christopher D. Werner offers financial direction and investment products through his company the Werner Group.  He agrees, “We have to be defensive when we know some of our clients are seniors.  What is recommended for older folks in the investment mix will be somewhat different, of course.  On the other hand, I won’t advise someone at any age be involved in an investment vehicle I wouldn’t have for myself.  You have to look at how investment managers have performed over time.

As for the future, yes we can’t predict it.  We can only give our best answer based upon our knowledge of specifics now.  Saving is fundamental to getting to a safe retirement, and cash isn’t the only option.”

Chris Werner, a 30+, energetic man looks at the cup half full, as his life in most ways is beginning, with a future in the financial world.  His view continues to include the tried and true recommendations of balance, growth and saving.

It is, however, for Werner and for Johnson, as it is for seniors who did plan and save, the unknown face of the budget crisis aftermath that offers the greatest concern for elderly and for which there seem to be no good answers.  And while working longer may seem the easy answer, seniors continue to be the most vulnerable group to layoffs and unemployment, making it difficult, if not impossible, for those younger baby boomers to plan at all.