Sunday, June 24, 2012
As I have previously discussed, the children of baby boomers might not receive as large an inheritance as they might want. Some have now reported that the baby boomers, as a generation, might be stuck between a rock and a hard place on this issue as well. Because of the rising costs of long-term-health care and an increase in life expectency the previous generations before the baby boomers might not be able to give a substantial inheritance to their children. The hard place in my analogy is that many of baby boomers might have to help support their aging parents. The reason for this is that the greatest generation did not expect to live this long, and so those who did save for their retirement are running out of funds to even support themselves. Members of the greatest generation also took a major hit during the recent recession and many lost of good portion of their investments.
A real problem is that financial issues are the types of problems that people generally do not want to talk about, and the problem is no different here. However, these elderly parents might want to consider talking about their problems with their adult children. There are several options that a parent can choose from to help save money to held with their financial struggles. Some financial planners suggest that parents might want to:
- Reconfigure their budget
- Move into a small residence or find another way to reduce living expenses
- Purchase an annuity that would provide a stream of income over the course of their lifes
- Ask their children to help with some of the health care expenses if they are able.
See Anne Tergesen, Baby Boomers Counting on an Inheritance? Count Again., Wall Street Journal, June 11, 2012.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.