Many of today’s baby boomers find themselves in a historically unique squeeze: children are leaving home later, and fragile elderly parents are living longer.
“Statistics show that this generation is looking after parents and adult children to a greater degree than past generations,” says Martin Hofgartner, a personal banker with National Bank Wealth Management.
In many cases, he says, baby boomers find themselves looking after others at the cost of their own well-being, particularly when it comes to ensuring there is enough income for their own retirement. “If you ask a person in this stage of life if they have enough savings for retirement, the answer is often, ‘I have no idea,’” he says. “Helping parents or adult children tends to be reactive – they need help and we want to provide it. But when it comes to putting plans in place for your own future, you can never replace lost time.”
In general, planning for retirement is more complicated today. Not too long ago, defined benefit pension plans provided retirement income for those people lucky enough to reach 65, says Mr. Hofgartner. “Past generations would work until the age of 65, retire and receive a consistent, reliable income; they would generally stay home and live a modest lifestyle. That was their retirement plan – there was no need to do anything more than wait for that cheque to come from their employer.”
Now, defined benefit pension plans are becoming increasingly rare, and people are living significantly longer in retirement, while the costs associated with these greater lifespans, including more years of age-related illness, mount.
In addition, “Many boomers are assisting parents financially or are losing income because of their eldercare obligations,” says Mara Osis, founder of ElderWise, an organization that provides information and coaching to help families caring for elderly loved ones. “They may turn down career opportunities or even retire early, if they feel it’s up to them to take on this responsibility and don’t see any other way of doing it.”
But a financial plan empowers you to make a more informed response to demands on your income, explains Mr. Hofgartner. “It’s not all or nothing. It becomes possible to say, ‘Here’s how much I can help, given my circumstances.’ Without a plan in place, it’s impossible to know that.”
Along with retirement planning, an important survival strategy is building a “care team” rather than trying to manage alone, Ms. Osis says. “Include your other family members, either to help your parents or to support you while you help your parents. If your parents are out of town, then you need a team wherever they are. It is critical to ask for and receive help to avoid burning out.”
Part of your strategy might include negotiating with your boss for understanding, she says. “Employers often want to be flexible, but they are still more focused on childcare than eldercare.”
It may also be possible to qualify for government-supported home care or community services through a geriatric assessment at the local health authority or health region. Local senior resource centres are often clearinghouses for community and social service agencies that provide assistance to seniors.
If such resources aren’t available or don’t meet your loved one’s needs, there are many private companies springing up to help seniors stay in their homes, by offering personal and other care, says Ms. Osis. “If you can hire someone for $30 an hour and you’d otherwise have to sacrifice earnings that are higher than that, it may be wiser to hire.”
Whatever the costs and the questions, a financial plan can provide many of the answers – timely ones. “The longer you wait, the less time there is to work with to be able to ensure that your objectives are being met,” cautions Mr. Hofgartner.