The views expressed represent the opinion of modern wealth management LLC and SEC registered investment advisor information provided is for illustrative purposes only and does not constitute investment tax or legal advice. Modern wealth management does not accept any liability for the use of the information discussed consult with a qualified financial legal or tax professional prior to taking any action. You have people who reach that pinnacle of financial independence and they're say, okay, I'm going to stop working, but then as soon as they stop working and they want to have that life, the travel, do this, do that. All of a sudden, now mom's sick, no, now dad's sick, now my mother-in-law, now my father-in-law, and you spend that first decade of your retirement years not doing what you wanted to do, but actually having to care for those aging parents. All right, Chris, let's talk about this whole sandwich generation thing. I mean, I want to go way, way, way back when I was early in this business of helping people get to and through retirement. Back in the 90s, you had the baby boomer generation that was saying, hey, we are the sandwich generation. Our parents are older. Some of them didn't save enough. We're having to take care of them. We want to retire, but we've got to take care of them. And then we got our kids that we're responsible for because we waited later in life to have children. But today, that baby boomer generation is now becoming that aging parent who is maybe needing some care from the Gen Xers. Yeah. Then I know, and before we get too far into it, I want to unpack what the sandwich generation is referring to. And that's defined by Miriam Webster is that those individuals that are both planning for retirement and perhaps caring for their kids and caring for loved ones that are older. So you're really kind of stuck in the middle. You're stuck in the middle. Yeah, like a sandwich. And so you're exactly right. Is that what we're seeing now? Is those baby boomers that you referenced earlier are now on the receiving end of caring and not on the giving? And now it's that's that that, I guess, in a lack of a better term, that Burton, right? And not always a burden. Some people are willing, but that responsibility then falls to the kids. Yeah. And you think back over time, before we became such a mobile society and families went in multiple directions across the country and some cases across the globe, the aging mother or father would, in many cases, move in with the adult children to take care of that individual over time. And I saw that with my mom. I mean, she moved in my grandparents because they were not able to take care of themselves. My grandma had Alzheimer's and they quite frankly didn't have enough money. So they had to combine resources and, and, you know, we're able to get by and do things. Now, fortunately for her, she wasn't having to care for young children. She had all of her children at a very young age. And so, you know, but that that caring for an adult, you know, in their 70s, 80s, 90s, is a lot of work. And if that person hasn't been financially responsible, it can be a burden on you financially as well. No, that's that's exactly right. And so what you're seeing is that maybe, you know, because the baby boom generation had to take care of their parents and raise kids at the same time, maybe they weren't able to put as much away for retirement thinking, Hey, you know, I'll figure this out on the back end. And life gets in the way things cost more. They don't put as much to savings. And now, again, that that that financial responsibility then falls to the next generation. And so you have somebody preparing for retirement that may be your parent for whatever reason wasn't able to save. And now you're picking up kind of the slack, you know, for for past generations in a way. Yeah. And it's interesting. The people between age 40 and 49 are the most likely to be in that sandwich generation where they've got a parent that's 65 plus and they still have children under 18. And so that, that right there is kind of the key. But that if that happens, it becomes difficult to save for retirement. And to make this even, you know, more alarming, Chris, the number of people according to the World Health Organization that are over the age of 60 is projected to increase from 1 billion in 2020 to 1.4 billion by 2030 and by 2050. It's projected to be more than 2.1 billion. And the number of people age 80 and above is expected to triple over that same timeframe. So life expectancy is longer. People are living longer. And if they're not saving, they're becoming a burden on their adult children who are trying to get to retirement or the ability to stop working themselves. No, you're hitting the nail on the head is that, which is a testament to, you know, health advances and medicine and, you know, modernizing those both is that people are living longer. Now, the argument can also be made. That would be for another radio show is that, are they living healthier longer? Right? Is that that's not always the case? But they are living longer, which means that you got to save more money. And so that's why I think what we do a great job. And if you're not getting this, you ought to, is start stress testing it for longevity. I mean, we run our plans to 90 and we always have conversations and clients are always saying and prospects. Hey, you know, my parents died at a reasonably young age compared to 90. But we're seeing more and more clients come in older and older and health starts to decline is that it really is something you need to start stress testing for, not only for yourself, but again, for your kids. Yeah. Yeah. Let's go through a little bit more of this, Chris, because look, retirement or the, let's call it this financial independence. It's the ability to do what you want to do every day because it's what you want to do and it's no longer about the paycheck. And if you want to keep doing what you're doing at work because you really enjoy it fine. As long as you know that you can stop and you know you've got enough money to take care of you for the rest of your life. That's the financial independence part of it. Life is more than just money. Yep. Okay. Absolutely. And, and so a lot of times what we see happening is we get an aging parent. I've witnessed this with clients of mine. I'm sure you have as well. And people that are watching us on YouTube are listening to us on podcast or radio or however they're taking in our information have probably witnessed this too. But you have people who reach that pinnacle of financial independence and they're saying, okay, I'm going to stop working. But then as soon as they stop working and they want to have that life, the travel, do this, do that, all of a sudden now mom sick, no, not dad sick and now my mother-in-law, now my father-in-law, and you spend that first decade of your retirement years not doing what you wanted to do. Yeah. But actually having to care for those aging parents. Right. Right. And if you- Or, or Chris, maybe you didn't even get an opportunity to retire or leave your employment on your own terms because you had to stop because you had to care for an aging parent. That's exactly where I was going to go is we're seeing this more and more with clients and saying, hey, the responsibility is a much better word. The responsibility of caring for parents. It's assumed they're caring for kids and we do that into the data gathering of the age of kids and whether or not they want to do college planning and how much they want to help them. Maybe it's a down payment on a house. Maybe it's a wedding. I mean, those are all really assumed, but we're seeing a lot more of clients wanting and needing to take care of their parents, whether it is financially or more importantly, even if it isn't financially, say it's a loved one took out a long-term care policy. And the finances are there still taking time. I mean, we're seeing a lot of clients build out in their plans. Hey, can I afford to take time off of work, whether it's an extended period or reduce it to 30 hours a week? Maybe part time to care for a loved one as they're going depending on where their health status is at. But no, we're seeing a lot more of that Dean. That's real. Yeah, I think you're working with somebody now who has asked the question, "I know that I've got a parent that's not going to be around in five years. Can I leave work for two years and then come back and how does that impact my ability to be free from the requirements to work in the future?" That's exactly right. No, no, that is. That's a very real scenario. And that's where we go through the priority exercises to say, "Hey, if we aren't a good state to be able to be financially independent, what does that look like for you?" Right? Because it looks different for everybody. That's why I think if you're not getting an individual plan, you ought to. But yeah, this particular individual said, "Hey, I have a great relationship with a parent, and I know that they have a terminal illness, and it would really mean a lot to me to be able to take care of them, and can my plan sustain?" And so it took some extra planning, but that's what that client wanted, and that's what you ought to be doing. It's interesting you talk about the prioritization exercise. I want to talk about that just a little bit, because when we begin working with people as their financial advisor, it's almost their financial coach, and we walk through a prioritization exercise, and we do what's important, right? What are the most important things in your life? And you do that for both spouses, right? Yeah. What's the most important thing in your life? And we have things that we list out, and in almost every case, I can't say 100% time, but I'd say at least 90% of the time that I go through this prioritization exercise, one of the things that people say all the time is, "I don't want to be a burden to my children. I don't want to be a burden to my children." And when you ask, what does that mean? It means that they don't want their children to have to take care of them, right? And it's not to be a burden financially. Right. I don't want to be a burden emotionally to my children. And in most cases, those people who are saying that were burdened emotionally by their parents, right? Absolutely. And so if that is an objective, you need to have a family meeting, and you need to tell your children, "Here's my expectation, I don't want to be a burden to you. I have money set aside to be in an assisted living type of facility," or whatever it is. And look, you don't have to feel obligated to come see me every day if you want to find, but I don't want you to feel like that's an obligation of yours. Or, again, to put it another way, that's a lot of responsibility is that the skilled care involved, right? If somebody isn't healthy, is that my wife is a nurse and she sees a lot and goes through a lot of training, it's through her that I see sometimes going back a couple decades that you mentioned of moving in is that that was nice to get around, but sometimes some of these ailments get pretty progressive, you're better off getting care at a long-term care facility or something like that. It does require skilled care. And I think that in an ideal world, when people are incapable of taking care of themselves, they still want to stay in their home. They want to stay in their home. And if you think about that, you want to put that and build that into your plan. So if you don't want to be burdened, what does it mean, right? And if you are incapable of taking care of yourself, how do you want to be taken care of? Do you want to be cared for in your home? Do you want that to be your children? Do you want that to be a skilled caregiver? What do you want, right? And build that into the plan and what's the cost of that? How are we going to fund that? No. And I want to go back to your story too and revisit kind of this individual's case is that what I think we want to do too is that we often as financial advisors or financial coaches or sometimes financial physicians or doctors is that we're looking at it and we're saying, "Hey, honestly giving permission for somebody to do what they want to do." And so we want to say too is not only, "Hey, you mentioned having the meeting with your family and taking that burden off." I think that's great. But also, hey, if you want to take care of an aging parent and you want to retire on time and you do want to do a live of financially independent life, can you do that, right? And what does that look like? I think that you, this all starts and we talk about the sandwich generation as if that's when you start planning is when you realize that you're in that sandwich generation. This, this planning has to begin well before that, right? So if you're in your 50s or 60s, you're watching this, you need to be talking to your kids that are in their 20s or 30s about, "Hey, this could become a reality for you. Here's what we're doing in order to prevent that." But, you know, you need to think about this. You don't have kids yet. You're 35 years old. You're going to have kids later in life. All these things are very real, but a lot of times I think people have blinders on and they don't see the need to plan for things like this until it's right in front of them. And by that point in time, it's too late to plan. Yeah, I think everybody kind of has this feeling that that won't happen to me. That doesn't happen to me. But to your point about the aging is that this problem is only getting bigger. It's only happening to more and more families. And so by putting kind of the proverbial wool over your eyes, you're not doing yourself or your family members any favors. And so nobody, you know, it's a tough spot to be in. So we do want to cover that. It is tough. It's tough to plan for retirement, right? It's tough to put kids through college. It's tough to help them out. And then you get an aging parent. The last thing you want to do is say, "I don't have time for you." Somebody that's dedicated their entire life for you is that, you know, it is worth planning, but you got to be proactive and your advisor's got to be proactive with you. And another thing that you have to take into consideration here is when should you claim your Social Security? One of our managing directors in Tennessee, Mark King, recently did an education series. You can find that on our Modern Wealth channel on Social Security planning strategies. But if you think about the difference between claiming Social Security at 62 versus claiming Social Security at 70, it's really a doubling effect, right? So if you were going to get 2,000 a month at 62, you do the math, you're probably going to get 4,000 a month or a little more at age 70. So if you have not done a good enough job of saving enough where you know a parent has not done a good enough job of saving enough, you need to try to figure out a way that you can bridge whatever income need there is for that first few years of retirement and delay that Social Security for as long as possible so that you get that bigger check for what could be a longer lifespan. We went through the longevity numbers here from the World Health Organization a little bit ago, but I get pushed back on this all the time, Chris, and I know you do as well because people, they have this thought process, well, if I don't start taking early, then I'm not going to get as much money out of the system. So if I die by 75, I won't have gotten as much out. And my comment is, the risk is not dying too soon. The risk is living too long and you have too much life at the end of your money. That's the risk. That is exactly the risk. So it is this real longevity risk. It is. No, you hit the nail on the head, and there's so many myths surrounding Social Security that we could do an episode on unpacking all of those, but you're exactly right. We have a popular saying around here is that you plan for the known and you hedge against the unknown. Is that I make a joke with clients all the time, just like you mentioned just there, is that we can put together the best Social Security strategy that everybody has ever seen ever if they just give us one thing. And nobody's been able to give me that thing yet, and that's when you're going to pass. Right, because if we knew you were going to pass, take it as 62 or retire early, but because we don't, we plan for the known and we hedge against the unknown. And the unknown is telling us that people are living longer and you're right, is that by deferring Social Security, you get an automatic bonus. It's just prudent to defer it if you don't need it. Yeah, well, I was just reviewing with a long time client this last week, and they're 62 and 63 in January, and we're talking about, okay, you're there. Are you going to do it? Are you going to stop working? I think so, am I? And one of those things, my employer really needs me, and I'm like, okay, what do you want to do? I want you to think about this. You have enough money that when you wake up in the morning, you should be doing whatever it is you want to do. And it should never be about a paycheck again, right, right? So, is waking up and going to your job what you want to do every day? And there was no, right, no, okay, so then why are you? Right, right, you need to really give us some thought. We go back to that same priority or exercise that you talked about earlier, and another one that doesn't get talked about enough is I would dedicate more time to health. Yes. Is that I think Americans trade, you know, they trade off a lot of taking care of themselves for working extra hours, making more money, saving, and that sometimes is, sometimes is necessary. But what we see is the other side is that, hey, because you sacrificed so long, maybe you're on blood pressure medications, or maybe, you know, your waistline is a little bit more than what you wanted, is that we see a lot of people come to us and say, you know, I want to dedicate more time to exercise. I want to be healthier because they recognize the second we tell them you're good to retire and you're financially independent and you can care for a loved one. And you can care for your kids as well as that, you know, it is focusing on your health is your wealth, right, because as you pointed out is that the statistics is that the 80 year olds, it is focusing on health care, but let's say that you're a healthy 80 year old and you can't travel because you didn't save enough or the flip side is maybe you have enough money, but you're not able. We see that a lot too is that we have clients that are financially able to do whatever they want and they're not able to get on a plane or get on a cruise because health won't allow. Yeah, and I think, you know, over the years, I've witnessed the people who work too hard, they put too much in too much stress, and you can really see a change in their overall physical health over the first couple of years every time because they do have that time to take care of themselves again, right? But I think there's also a paradigm shift, and that paradigm shift generally happens at about the age of 50 where you realize that you're not immortal, that, you know, now you're seeing parents age, you watch your grandparents pass, and, okay, I'm now over 50 and, oh my gosh, I better get serious and, you know, I'm not going to live forever. And so there's a lot I think a psyche there that plays into that. No, I think you're hitting the nail on the head there is that what we see a lot of times is that paradigm shift is often my 401k, my IRA, hopefully a Roth, as this Rothaholics like to build up, is not your most valuable asset, it's not your home, it's not the car that you drive. That's exactly right, yeah, is that over 50, we start to see time is the most valuable resource, and that's the only thing you can't make more of. And I think that's where the aging parent really comes in too, and they see this, I don't have that much time left, and yet here's my adult kids, you know, traveling and going and having fun, and so a lot of times there's maybe even a guilt trip of, you know, I'm not going to be around forever, trust. Right, and that happens. Absolutely. No, but I think too as it goes back to spending time with loved ones is that for a second, let's say that you have an aging parent, you know, I have an aging parent that it's not necessarily requires financial or medical needs right now, but I had the opportunity to go back to Michigan and visit with some clients there and spend some time with family, but my dad was just going, you know, making a drive, hey, you want to go, and it's sometimes it is just spending time, we do get caught up in saying, hey, caring and needing and things like that, and all those are very important, but sometimes somebody just wants to retire just to spend time with loved ones, even if it's not caring for them medically or financially. You go back to our, you go back to our whole prioritization exercise, one of the other things that they, people always say is I want to spend time with the people I care about. That's exactly right. And what are you talking about? I'm talking about my kids. I'm talking about my grandkids. Well, why don't you spend more time with them? Well, they're busy. Yeah. And so then you go into this whole idea of, we've done this for a lot of people. Yes. All right. Let's plan to put into your budget family vacations. Yeah. Your kids are working. They could afford to pay for their own vacations, but let's put it in so that you're paying for their vacation. Well, they got to do a show up and plan it two years in advance and a location where everybody will be excited to go to. You talk about creating some memories and leaving a legacy. That's huge. That's exactly right. The people that are doing that today, that we've coached through that are, they're just, I mean, maybe they're near their 70s or 80s now, but they're still doing it. And their grandkids are enjoying it. And their kids are enjoying it. And they're going to, they're going to continue that for their kids and their grandkids. I had a couple of clients listen to a show that you and I did on something like that and they decided to look at their plan and we reworked it to see if it's something they could do and they did it and they said it was one of the greatest things that they have. So again, planning works both sides as we want as planners to be able to offer that flexibility to clients to say, can you take care of your parents? You know, if you want to and are able to, right? And then the trade office taking care of your kids as well, but also dictating how you want to spend your time and your money. It's all, you know, it's all about life, right? And the great thing about building a financial plan is that you can have the freedom after that plan has been built to live the life you want to live without any worry about, you know, financial security. So, absolutely. Chris, appreciate you joining me here on America's Wealth Management Show. I'm being Barbara along with Chris Rat. Until next time, everybody stay healthy and stay safe. [Music]
