The Unique Financial Needs for Multigenerational Families
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WEEKLY EDUCATIONAL UPDATE - FEBRUARY 14, 2018
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Financial lives are inherently complex and require thoughtful perspectives and strategies for you and your loved ones. Multigenerational households pose additional challenges to heads of households. A multigenerational household has two or more adults from different generations.
[1]
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More than 60 million Americans live in multigenerational households, comprising 19% of the population.
[2] Living in a household with family members of different generations increased during the Great Recession (2007 - 2012), and the trend continues.
[3]
Multigenerational families are formed for a variety of reasons with 44% of people living in these settings for financial reasons.
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4] If you live with or are responsible for more than one generation of family members, you may want to address the following financial details.
What financial needs do they have?
Multigenerational families' needs are vast and varied, but they commonly include caregiving responsibilities. Adult children may be caring for their aging parents and their own children, and grandchildren may even be caring for their grandparents or vice versa.
1. Combined Living
When you have more than one generation living in a home, you have to take into account each group's financial needs. If you have both your aging parents and your children in the same household, you may need to address:
- The financial responsibilities of raising children. For a middle-income couple raising a child born in 2015, you can expect to spend $233,610 until they reach 17 years old - and from there you still have to account for college. The average annual cost for raising a child is between $12,350 and $14,000.[5]
- The financial responsibilities of living in multigenerational homes. Families may have to change their living arrangements in order to care for multiple generations in one household. According to one study, 44% of new home shoppers want to buy a home that allows them to live with their aging parents.[6] In addition, a family's net worth can drop by 1% when living in multigenerational families, which may seem small but can be significant on one's financial life.[7]
2. Caregiving Costs
Family caregivers have financial obligations beyond the typical household's. Each year, they individually spend an average of around $7,000 on out-of-pocket caregiving costs, averaging almost 20% of their annual income.
[8] The financial burden can put a strain on families. A recent study found that seniors who live in multigenerational households are more likely to be economically disadvantaged.
[9] As a result, they may have to rely more deeply on their adult children's finances to support their needs.
In addition, serving as a family caregiver can deplete personal incomes and retirement funds. Women caregivers can lose a total of $324,044 in combined wages, Social Security benefits, and pensions throughout their lives, and men can lose $283,716.
[10] These lost assets put even further financial strain on families.
3. Life Insurance Coverage
Multigenerational families should also consider how their life insurance needs change. While life insurance isn't the only type of coverage you'll need to revisit to ensure it fits your unique needs now, the protection is an important part of your financial wellness. With multiple dependents in the household, the risk is higher for multigenerational families should the family's caregiver or provider pass away. Ensuring you adequately cover all gaps so your family remains in sound financial standing is even more important.
This analysis is just a snapshot of the responsibilities, challenges, and obligations multigenerational families need to consider when planning for their financial lives. Of course, your unique needs will help guide you in determining the best individual strategies and protections for you. If you would like to discuss your options, please feel free to contact us. We're ready to help you make the most of your financial opportunities.
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"If we command our wealth, we shall be rich and free.
If our wealth commands us, we are poor indeed."
- Edmund Burke
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Serves 4
Ingredients:
- 4 (6-oz) skinless salmon fillets
- ½ teaspoon coarse salt
- ½ teaspoon pepper
- 3 tablespoons all-purpose flour
- 2 tablespoons olive oil
- 3 garlic cloves, minced
- ¼ cup dry white wine, such as sauvignon blanc
- ¼ cup lemon juice (from about 2 lemons), plus lemon slices for garnish
- 2 tablespoons rinsed and drained capers
- 2 tablespoons chopped parsley
- 2 teaspoons unsalted butter
Directions:
- Season the salmon with the salt and pepper.
- Coat the salmon with the flour in a shallow bowl. Shake off excess.
- Heat the olive oil at medium-high in a large cast iron or nonstick skillet.
- Cook the salmon for about 2 minutes until golden, turning once.
- Lower the heat to medium. Add garlic and cook for about another minute.
- Add the wine, lemon juice, capers, and parsley and let simmer 5-6 minutes on medium-low heat until fish fillets are cooked through.
- Add butter after removing the pan from the heat. Stir for about 30 seconds until the butter is melted.
- Garnish with the lemon slices and add the sauce.
Recipe adapted from Good Housekeeping
[11]
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Is The IRS Knocking on My Door?
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"Knock, knock."
"Who's there?"
"An IRS agent."
It may sound like a joke, but the IRS warns taxpayers of potential scammers posing as representatives of the taxing agency in person, on the phone, and by email.
Before opening the door, first read these 5 facts about how or when the IRS makes in-person contacts.
- The agency initiates most of its taxpayer contacts by regular mail.
- The IRS will only visit your home or business when you have an overdue tax bill, when the agency must secure a delinquent tax return or employment tax payment, to tour a business as part of an audit, or to conduct a criminal investigation.
- IRS revenue officers carry 2 forms of identification with serial numbers.
- Private collection agencies contracted by the IRS to collect a debt will never visit your home or business.
- The IRS will not ask you to make payments to anyone except the U.S. Department of Treasury.
If you believe you've been visited by someone impersonating an IRS agent, visit
IRS.gov for information about reporting the incident.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor
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Tip courtesy of IRS.gov[12]
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It's the single most important part of golf: the swing. Besides learning to hold a club, it's the first lesson you learned about the game. But occasionally something goes awry - even among seasoned players.
It may be minor or something so outrageous as missing the ball altogether. So, how do you fix your swing?
Here are 2 ways to get you back into the swing of things:
First things first: Golfers occasionally make adjustments over time to develop power, to add more distance, or to achieve other game goals. While the changes may feel subtle and produce other desirable gains, other parts of your game begin to deteriorate, sometimes very slowly. You change your shoulder positioning, for example, to gain lift or to obtain some other objective.
What should you do to regain that initial finesse? Go back to square 1. Do what you did in the beginning; return to the same parallel-shoulder-to-target-line stance you learned at first.
Get a grip: How are you holding your club? If you're squeezing your club too tightly, you're going to lose the club release or not produce adequate club speed. Pros recommend holding the club at a force of 4 out of 10 with 10 being the strongest.
Restoring your game to full potential (or its former luster) can be as easy as returning to the basics and adopting a few simple techniques
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Tip adapted from Golfweek
[13]
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The Scoop on Food Poisoning
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Jean Anthelme Brillat-Savarin is credited with saying: "You are what you eat." But the 19
th century French physician's observation provides little comfort when you find yourself suffering from food poisoning.
More than 3 million Americans suffer from food poisoning every year, which is considered an extremely common ailment. Symptoms vary from mild intestinal discomfort to severe dehydration and bloody diarrhea. Treatment involves drinking plenty of fluids and close monitoring of symptoms.
Stay away from sports drinks, fruit juices, and soda, which have too much sugar and lack adequate electrolyte levels.
Medical authorities recommend returning to your normal diet when you're able to tolerate solid foods, which will help restore adequate nutrition levels
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Tip adapted from WebMD
[14]
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Go Green at Home and on the Road
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Becoming conservation minded doesn't necessarily mean buying an electric car or riding a bicycle everywhere. But a few simple steps can save you thousands of dollars and help preserve the environment.
Here are some environmentally friendly tips you can take to the open road:
- Buy or rent a home or apartment within walking or biking distance to your work, stores, and restaurants.
- Use public transportation when available.
- Join a carpool. You can even coordinate carpooling with nearby businesses.
- See if car sharing is an option that would work for you.
- If you do buy a car, go with a very fuel-efficient and low-emission one.
- Fill up your car during evenings to reduce pollution levels.
- Combine and map errands for the shortest route.
- Keep your tires properly inflated.
- Maintain timely vehicle maintenance.
- If you own 2 cars, use the one with the best gas mileage more frequently.
A few minor lifestyle adjustments can make all the difference in the world. Literally.
Tip adapted from Global Stewards
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These are the views of Platinum Advisor Strategies, LLC and not necessarily those of the named representative, Broker dealer, or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
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[1] www.pewresearch.org/fact-tank/2016/08/11/a-record-60-6-million-americans-live-in-multigenerational-households/
[2] www.pewresearch.org/fact-tank/2016/08/11/a-record-60-6-million-americans-live-in-multigenerational-households/
[3] www.nytimes.com/2016/08/12/your-money/multigenerational-households-financial-advice.html
[4] www.issuelab.org/resources/23636/23636.pdf
[5]
money.cnn.com/2017/01/09/pf/cost-of-raising-a-child-2015/
[6]
www.cnbc.com/2016/07/20/figuring-finances-of-your-multi-gen-household-needs-to-be-a-family-affair.html
[7]
crr.bc.edu/wp-content/uploads/2016/09/wp_2016-10.pdf
[8]
www.aarp.org/research/topics/care/info-2016/family-caregivers-cost-survey.html?CMP=RDRCT-PPI-CAREGIVING-102416
[9]
crr.bc.edu/wp-content/uploads/2016/09/wp_2016-10.pdf
[10]
www.bmo.com/privatebank/pdf/Q1-2015-Wealth-Institute-Report-Financial-Concerns-of-Women.pdf
[11] www.goodhousekeeping.com/food-recipes/healthy/a46953/lemony-salmon-piccata/
[12] www.irs.gov/newsroom/how-to-know-if-the-knock-on-your-door-is-actually-someone-from-the-irs
[13] golftips.golfweek.com/fix-golf-swing-1032.html
[14]
www.webmd.com/food-recipes/food-poisoning/food-poisoning-and-safe-food-handling-home-treatment
[15]
www.globalstewards.org/alternative-transportation.htm
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