Reuters Money
Eldercare: How to hire your kids to take care of you
Long before the phrase “sandwich generation” took hold, seniors in declining health turned to children or other relatives for essential tasks such as cleaning, grocery shopping, doing laundry or driving to doctors’ appointments. Now, a growing number of families put a price on such devotion though caregiver contracts.
As the name implies, caregiver contracts outline in detail paid arrangements between a parent and child, relative or anyone else in the caregiving loop. Among other things, a formal agreement sets forth the length of time and rate of pay for caregiving services, and the tasks to be performed.
While children who care for elderly parents is nothing new, tough economic times and the rising cost of nursing home care add appeal to paying them for doing so under a contractual arrangement. “These days many people can’t afford to care for someone without getting paid, especially when they have to leave a job to do it,” says Ellen S. Morris, an attorney with Elder Law Associates in Boca Raton, Florida. “For parents, paying a child or other relative can help them stay at home and provide assurance that they are not being a burden.”
Caregiver contracts mushroomed with a 2006 change in the law that makes it more difficult for people to give away their assets to qualify for Medicaid. By spending down savings to pay for caregiving, elders can lay the foundation for Medicaid to pick up the tab should a nursing home stay be required. According to Morris, that’s an important goal for about half of her clients who use contracts with family members.
They can also make it easier for veterans to qualify for certain benefits, says James Mullen, an elder law attorney in Bristol, Rhode Island. Under one program, some disabled veterans who pay a relative or other person for care can include those amounts as medical expenses, which may qualify for government reimbursement.
While formal contracts pave the way for receiving government benefits by setting important details in stone, Mullen says that suggesting them to family members often evokes an emotional response.
“The kids don’t want to look like they are being greedy and some parents believe that children should care for them out of love, not money,” he says. “But when I point out that a son or daughter is providing a valuable service, and often suffering a financial loss by taking time away from a job to do so, that sometimes changes their minds.”
From empty nest to full house: A guide to multigenerational living
As the heartache of an empty nest subsides, do you now find your home bursting at the seams with extended family? You’re not alone.
A feeble economic recovery and embattled housing market are fueling a once-popular trend in living arrangements – the multigenerational household. Aging populations are living longer and adult children are cracking under the pressure of high student debt and a lack of job opportunities, creating a double dependency for the sandwich generation.
As of 2008, a record 49 million Americans, or 16.1 percent of the population, lived in a household that contained at least two adult generations or a grandparent and at least one other generation, according to Pew Research Center analysis of U.S. Census Data.
The shift from nuclear family – Dad, Mom and kids — to mixed-generation households is affecting the way Americans build, buy and sell real estate. A recent study by Coldwell Banker Real Estate found 37 percent of sales professionals noted an increase in home buyers looking to purchase homes that could accommodate more than one generation.
“Our business has been picking up over the last few years and we’ve really identified a huge need to support the growing trend for multigenerational families architecturally,” says Carrie Shores, co-founder of Larson Shores Architects, who has partnered with Houseplans.com and ModularSource.com to create the Inspired In-Law Cottage.
The sustainable one-bedroom structures can be erected in the backyard of a property or built as an addition to an existing home. The 500-square-foot modular cottages, which start at $65,000, offer an affordable alternative to assisted living or nursing home facilities, Shores says.
“If you look at the statistics, seniors are more afraid of getting put in a nursing home than they are of death. We’re seeing with this generation that they really want an alternative to what people have done in the past,” she says.
Families crack retirement nest eggs to fund college
Renée Hirshfield didn’t expect to tap her retirement account to pay for her daughter’s college tuition. But when she opened the bill for Sarah’s junior year at Mount Holyoke College, sticker shock set in.
“She had been getting a fair amount of financial aid, but there had been a slight spike in my income the year before,” says Hirshfield, a small business owner in St. Louis. “That pushed the formula for my expected share of the bill to about double what it had been before. I was blindsided.”
Hirshfield, who is divorced, gets some assistance on tuition from her ex-husband. Her father also had been helping out, but at age 93, he moved recently to an assisted living facility that costs $5,000 each month. “Now I need to come up with ways to shore up his finances, and cover the college bills,” she says. “I’m the sandwich generation.”
The financial stress pushed Hirshfield (pictured left with her daughter Sarah) to liquidate a variety of investments and savings to cover Sarah’s junior year, including a $3,000 Individual Retirement Account. That put Hirshfield among a growing subset of families tapping retirement accounts to fund soaring tuition bills in the midst of the toughest economic climate since the Great Depression.
The number of families raiding retirement accounts for college this year has doubled, according to a new study by Gallup and student lending giant Sallie Mae. The study of more than 1,600 families with college-age children found that 7 percent withdrew or borrowed funds from a 401(k) or IRA for the 2009-2010 academic year, up from 3 percent in the previous year.
And the amounts withdrawn or borrowed increased to $8,554, up from $5,318 in the previous year. “That kind of change in a single year is very significant, and very worrisome,” said Sarah Ducich, senior vice president, public policy at Sallie Mae.
The Sallie Mae study found that families continue to place a very high value on higher education, with 83 percent agreeing that it’s a key investment in the future of their children. Parents are cutting spending and working harder to pay for college, and the expenses are putting greater stress on all sources of saved and borrowed funds.
I wholeheartedly agree with Adam_S. I am a young professional working for a mid-size university. It never ceases to amaze me the amount of money that goes into “eyecandy” in order to attract future students. Does a school need a new events center that does not increase the seating capacity of the old one and will house an underperforming and underwhelming sport team? Same goes for remodeling cafeterias that were just remodeled 5 years ago. It is change for changes sake so administrators can put something down on their annual performance review, long term impact on the university as a whole be damned!
The latest craze is to tear down perfectly serviceable dormitories and replace them with apartment style living complete with higher end furnishings. Sure it is nice to have these things but at what cost? Emphasis needs to be put back on education rather than amenities that cause parents to raid their retirement funds to support a comfortable and lavish lifestyle.
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DEMENTIA AND ALZHEIMERS – MY STORY – JOHN DU PREEZ
When I received confirmation that I have in fact without doubt fallen victim to Alzheimer ’s Disease I was devastated although I had suspected it for quite a while. I was quite knowledgeable about Alzheimer’s disease as a result of my involvement as co-owner of a Home for the Age and elder care was one of my specialties. Some time before that I wrote a Guide Book on Alzheimer’s Disease, which was directed at caregivers and relatives of Alzheimer’s sufferers. I decided that I will fight the sickness, instead of the sickness causing a declining of my brain and ultimately a slow death sentence and being in elder care.