|Traditional, Club or Open-Faced?|
|Monday, February 25, 2013 9:58 AM|
This is the first installment of a series examining multi-generational household dynamics.
Family dynamics are evolving. Today, more than 50 million Americans reside in multi-generational homes. In many of these households, middle-aged children — the Traditional Sandwich Generation — are caring for elderly parents as well as providing housing for their own grown children. There is also the Club Sandwich Generation, who are in their 50s or 60s sandwiched between aging parents, adult children and grandchildren or those in their 30s and 40s with young children, aging parents and grandparents; and Open-Faced, anyone else involved in elder care.
In the past, the burden typically was shouldered by a middle-aged woman who stayed at home caring for young children and aging parents. In 1900, nearly six out of 10 people over age 65 lived with someone from a younger generation. By the 1980s, only 17 percent did. According to a survey conducted by the Pew Research Center, just over 1 of every 8 Americans aged 40 to 60 is both raising a child and caring for a parent, in addition to between 7 to 10 million adults caring for their aging parents from a long distance.
Who’s living together and why
There’s no doubt the Sandwich Generations are making big financial sacrifices to help each other. Many 19-22-year-old college students, 60 percent of young adults, receive monetary assistance from their parents. In fact, a survey conducted of 2,500 adults found that 50 percent of those aged 40-59 have financially supported at least one child who is 18 or older.
The Full Nest Syndrome has been revived. Throughout the recession and the slow recovery, more adult children in their 20s and 30s, called the “Boomerang Generation”, have returned home from college or for a fresh start while they look for jobs. Nearly half (48 percent) of adults ages 18-34 who are not employed either live with their parents or moved in with them temporarily because of economic conditions. Among those who are employed full or part time, 35 percent are still living at home or moved back for a short time. The Office for National Statistics figures released in 2012 read that nearly a quarter of 20-34-year-olds were still living with their parents in 2011. In addition, the number of married couples living in a parent’s home has escalated to levels not seen since the turn of the 20th century.
As more and more people live longer, a significant portion of the older boomer generation or Sandwich Seniors, affectionately named “return-to-the-roost-ers,” will rely upon their family for support. According to the U.S. Census Bureau, the number of older Americans increased by 9.7 percent from 2000 to 2010, when there were about 40 million people age 65 or older. The first of the baby boomers hit age 65 on Jan. 1 and between 7,000 and 10,000 more will pass that mark every day for the next 19 years.
Finances and Healthcare
As the U.S. population grows older, not only will the Sandwiched Seniors and their relatives feel the financial strain, the country as a whole will suffer the consequences of the overextension. Medicare will be the first federal program to feel the economic pinch. With 2.5 million Americans enrolling in the program this year and another 70 million or so over the next 18 years flooding the system, providing aging Americans with long-term care is a major concern since the program will remain solvent only until 2024. The overflow into the system could deplete the very health insurance account that baby boomers have paid into their whole working lives.
Medicaid and Medicare statistics
The total number of Medicare recipients in Ohio in 1990 was 1.7 million and by 2010, the number increased to almost 1.9 million.
In the year 2000, there were 42,887,000 people receiving Medicaid in the United States—over 3 million of the recipients were age 65 and over—which totaled close to $169 billion.
Nine years later, in 2009, there were 61,825,000 recipients (an increase of close to 19 million people) including over 4 million aged 65 and over totaling $318 billion.
In addition, the Social Security system is already paying out more than it is taking in. According to the Social Security Board of Trustees’ annual report, the assets in the trust funds are expected to be exhausted in 2033.
In December of 2012 there were over 56.7 million people receiving Social Security benefits estimated at $65 million and approximately 39.5 million of them were aged 65 years or older.
Supplemental Security Income Statistics
The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources. SSI benefits also are payable to people 65 and older without disabilities who meet the financial limits.
In December 2010, there were 7.956 million people receiving SSI benefits and 2,041,490 of the beneficiaries were 65 years-old or older. One year later, in 2011, there were over 156,000 more people receiving benefits and an increase of 18,000 in the 65 + range. By December 2012, there were approximately 8.263 million people (up 150,000) receiving payments and an increase of 22,000 more people who were 65 years-old or older.
Looking at the figures, in just two short years the number of people receiving benefits expanded by approximately 306,000 and the number of people 65+ increased by over 40,000.
All told, in 2012 there were close to 2.1 million people aged 65 years or older —25 percent of the total number of recipients—receiving SSI benefits totaling approximately $867 million dollars.
The majority of the recipients were female (54 percent), 16 percent were under age 18, 59 percent were aged 18 to 64, and 25 percent were aged 65 or older. Eighty-five percent of the recipients were eligible on the basis of a disability. More than half (57 percent) had no income other than their SSI payment. Thirty-four percent of SSI recipients also received Social Security benefits. Despite their disabilities, about 313,000 recipients (4.5 percent) were working in December 2011.
In 2012, the highest federal SSI payment is $698 a month for an individual and $1,048 a month for a couple.
Members of the sandwich generation — caught between supporting elderly parents whose assets are nearly exhausted and adult children without jobs — might find some relief come tax time. With the life expectancy on the rise, baby boomers are caring for their elderly parents at home or footing the bill for an assisted living or nursing home facility, for lengthy amount of time. In addition, the unemployment rate for young adults age 20-24 was 13.7 percent in December, forcing them to return home, never leave and rely on mom and dad for food, lodging and more.
So, what does this mean for the “sandwiched” at tax time? Depending on the individual circumstances, a taxpayer may be able to claim both their parents and their children as dependents and file an exemption of $3,800 for each.
Look for more installments of “The New Norm” in future editions of The Delphos Herald.