How children can help get parents out of pension blues

It wasn’t supposed to be this way. Having been abandoned by his parents, surviving five foster homes and bootstrapping his way into American baseball’s minor leagues, Tom Anthony eventually hustled his way into a job as a commentator on football games for the Iowa Hawkeyes when his playing days were over.

Yet when it came time to retire, his promised pension payment was down to almost nothing as his employer went through five ownership changes.

On Tom’s 65th birthday, his son Mitch, a consultant to financial advisers and author of ‘The New Retirementality,’ said he and his brother had joined forces to provide their father with a pension. “He cried like a baby,” Mitch Anthony says of the time he told his father about the pension in a bagel shop. “He told me ‘no one ever took care of me’”.

Anthony and his brother deposited $60,000 in an investment account, calculating that at a withdrawal rate of 10% a year, given current expenditures, his father would have enough money for the rest of his life.

For millions of baby boomers, the need for extra help is becoming a familiar situation. More than 50 million people are providing some kind of assistance for aged family members or friends, according to the US health and human services department. The typical family caregiver is a married and employed 46-year-old woman.

Growing Concern

Even more pressure will be put on baby boomers’ children over the next two decades. The new euphemism for those called to parental assistance is “boomer interrupted.” Just when you began to look forward to your own retirement, your role reverses and you need to take care of those who took care of you.

“If you thought retirement was a big issue,” says Mitch Anthony, “you ain’t seen nothing yet. This issue will last for the next 25 years and its impact will mushroom with each passing year”.

Now is a good time of the year to have a discussion that addresses how you can help your parents when they need you most.

Before you can discuss the details of care giving, some financial essentials need to be examined.

Family Essentials
It may be a difficult discussion at first, but the following items are staples in protecting your parents’ interests.

Have the parents granted powers of attorney to responsible family members? These would include “durable” powers that will give an individual control over financial and health affairs in the event of disability.

Do they have a so-called living will that gives directions in the event of terminal illness or a life-support situation?

Source: http://economictimes.indiatimes.com/Personal_Finance/Savings_Centre/Savings_News/How_children_can_help_get_parents_out_of_pension_blues/articleshow/2651204.cms


Forget yourself for others, and others will never forget you.