Living with your Adult Children

While most of us cannot imagine living with our children as we age, it has become a reality for a growing number of senior citizens.  Sometimes, it is by choice.  The adult children look to their parents for help with baby sitting or similar assistance.  In other cases, it is because the senior citizens can no longer afford to support themselves on their meager retirement benefits.  Sometimes it is because they have developed dementia or health problems and the children take in their parents so they can care for them.  In some families it is normal for several generations to live together.  Whatever the reason, there are a number of issues you may need to consider before deciding if this is the right decision for you.

What If You Cannot Support Yourself as You Age?

In the last few years, my husband and I have known a few local retirees who had to move in with their adult children.  In every case, this was the last thing they ever expected to have happen in their later years. Apparently, this has actually become an increasing trend.  According to the AARP Bulletin for September 2012, in an article entitled, "When Parents Move In With Kids," as recently as 2011 there were 4.6 million parents living with an adult child.  This was a 13.7 percent increase from just three years earlier, in 2008.  The numbers continue to grow.

Since so many retirees lost substantial amounts of their savings during the 2007 recession, there have been increasing numbers of retirees who simply do not have enough money to live on their own.  Many of them also lost their homes to foreclosure.  If they were laid off during this period of time, they may have had to take Social Security early and, consequently, their income is not enough to cover their expenses.  In addition, they may have run through their savings or suffered substantial losses in the stock market.

Other Reasons You May Need to Live With Your Children

As mentioned above, there are also other reasons why retired senior citizens may find themselves living in their children's homes.  Sometimes it is their declining health which makes it difficult for them to care for themselves.  In other cases, it may be declining mental function. 

There can also be positive reasons why they might move in with a child.  For example, the child may want them to take care of the grandchildren.  In some families, it is common for the several generations to live together.  It can also make it possible for the families to purchase a home when the resources of two generations are combined.

Why a Written Agreement May Make the Transition Easier

When parents move in with their adult children, AARP recommends that the new living arrangement will be more comfortable for both the parents and their children if they set up a few ground rules in advance.  In fact, AARP suggests that both the parents and adult children write down the agreement, to avoid misunderstandings once you move in.  It may seem awkward to have a written agreement with your child; however, it could avoid a lot of problems in the future.  Listed below are some of the topics that you need to discuss and resolve in writing before you move in.  Feel free to add any other issues that concern you or your child.

Questions to Answer before Moving in with the Kids

How much will you contribute financially?
Who will pay for extra expenses such as a home healthcare aide?
Are you expected to help with chores, babysitting, running errands, etc.?
Will you travel with the family on vacation, and who will pay?
If you have a pet, can you bring it with you?
Will you have at least a private room and sitting area in their home?
Will there be a problem if you smoke or drink alcohol?
If you lose your driver's license, are they able to provide transportation for you?
If you pay your child for your care, what will the tax consequences be for them?
If you give them money, how will it affect Medicaid if you need a nursing home later?
If you purchase a new home with your child, what future problems could this cause?
If you have other children, will this living arrangement affect your will?
Will your other children have you stay in their homes periodically?
What social activities will there be for you to do?
If you are single, will it make your child uncomfortable if you date?
How do they feel about overnight guests, especially a boyfriend or girlfriend?
If your adult child is single, how will you feel about them bringing home dates for the night?

Seeking Professional Help before Living with Adult Children

As you can see, you may need professional help in order to answer some of these questions.  Check with an elder care lawyer or financial planner in order to help you both make the best decisions for your family.  If you have difficulty reaching agreement on some of these topics, don't simply move in and expect that everything will work out. 

You may also need to consult a family therapist to resolve issues that could cause stress in your relationship.  For example, does your adult child want you keep your mouth shut when it comes to the way they are raising their kids?  Are you willing to do that?  If you think that might be hard for you, then you may need to seek a different place to live.  After all, you are moving in with their family, and you want to create as few problems as possible.

Alternatives to Living With Your Children

You may not have considered alternatives to living with your adult children.  If you have financial issues, you may qualify for a senior apartment at an affordable price or a Section 8 voucher that will pay part of your rent.  You may also be qualified for Supplemental Security Income (SSI) and/or food stamps and help with your Medicare premiums.  With a little financial assistance, you may be able to maintain your privacy and continue to live on your own.

If you have mental or medical issues that mean you need assisted living, you may be able to apply for Medicaid to get your expenses covered in an assisted living or skilled nursing facility, including one for memory loss.  This would relieve your children of the burden of caring for you and would be safer than being left alone while your adult children go to work.

Remember:  If you are hesitant about moving in with your adult children for any reason, seek help from your local Social Security and Social Service offices.  They can let you know what services you are eligible to receive.

If you need more information to help you get the retirement help you need, use the tabs or scroll-down list at the top of this page.  They contain links to hundreds of additional articles on where to retire, medical information, financial planning, or changing family relationships.

You may also be interested in reading:

Healing Relationships with Your Adult Children
Retiring Former Hippies Spark a New Generation Gap
Cheap Places to Retire
Best Places to Retire in the United States on $100 a Day
Part-time Retirement Jobs for Baby Boomers

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo courtesy of photoxpress.com

Garden Spot Village Community for Seniors in PA

Are you looking for retirement communities located in small towns or rural areas?  One possibility is Garden Spot Village on the outskirts of New Holland, Pennsylvania.  This community for seniors in located in Lancaster County which is frequently referred to as the Garden Spot of the United States.  Although this retirement community is in a rural area, surrounded by spectacular views and an abundance of nature, you will find that it is also within driving distance of several large metropolitan areas including New York, Philadelphia and, a bit further away, Washington, D.C. and Baltimore.

Activities at Garden Spot Village

The heart of Garden Spot Village is the Village Square, a spacious building containing a sunny atrium, an indoor park, an exotic fish aquarium, a bank, mail center, small general store, a chapel, a beauty salon and an internet cafe.  Also located on the ground floor of Village Square is the heated indoor swimming pool and the superb fitness center.  Everything you absolutely need is conveniently located.  The community has planned activities, a choir, an annual marathon and exercise classes.  There is no reason to be lonely or bored in this friendly community.

Housing Choices at Garden Spot Village

New residents have a wide range of housing choices.  You may choose the Village Square Apartments that are attached to the Village Square, with sizes ranging from about 1500 to 1900 square feet.  Other nearby apartment buildings have sizes ranging from 725 to 1700 square feet.  However, for those who prefer something more private or spacious, you can select one of the lovely attached cottages or carriage homes.  The cottages range in size from 1088 to 1318 square feet, and the carriage homes are availabe in sizes up to 2029 square feet.

Medical Support at Garden Spot Village

As we age, we may not be able to manage quite as well on our own.  If this happens to you or your loved one, there is no need to leave your friends and activities at Garden Spot Village.  They have several options to make life easier for residents.  You can request the assistance of a part time aide  to help out in your own residence or you can move into the Mountain View independent living suites.  Those who develop dementia may choose to live in the Laurel Memory Support facility; patients with more serious medical issues or who need post-surgical temporary assistance may choose to stay in the skilled nursing facilities known as The Households.  Garden Spot Village also offers respite care, which gives family caregivers the opportunity to get a much needed break, as well as adult day services.

In addition, nearby Ephrata Community Hospital operates a clinic just inside the gate to Garden Spot Village.  This makes it possible for residents to walk to their doctors' appointments, pick up prescriptions, get lab work done, have an x-ray, and receive other medical services. 

Once you move to Garden Spot Village you can be confident that you have chosen a community where you will want to spend the remainder of your life.

If you are interested in living somewhere besides Pennsylvania, use the tabs or the pull down menu at the top of this post to find links to hundreds of additional articles.

In addition, you may want to read:

The Best Sunny Places to Retire
Cheap Places to Retire
Finding Niche Retirement Communities
Best Places to Retire Outside the US

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo of grazing deer in Pennsylvania courtesy of morguefile.com

Why Retire in Puerto Rico, the US Virgin Islands or Guam

According to a MarketWatch article mentioned in finance.yahoo.com, entitled "7 Money Matters to Consider if Retiring Overseas," there are more Americans than ever who are making plans to retire to another country.  They don't want to give up their U.S. citizenship; they just want to try living somewhere that is less expensive. 

Since many Americans lost a large part of their retirement funds in the past decade, the desire to live in a cheap, exotic location is greater than ever. In fact, The Social Security Administration reports that the number of people receiving their benefit checks overseas has grown from 242,000 in 2002 to 613,000 in 2014. 

The Market Watch article listed some of the issues that Americans should consider before they make a move to another country, and the author repeated over and over again the importance of getting professional assistance and expert advice from attorneys and estate planners who have experience in this area.  In fact, you may want to first consult an American attorney, and then work with attorneys, accountants and tax professionals in the country where you plan to reside.

Professional Assistance is Needed for these Issues:

Foreign income tax issues
U.S. income tax issues while living in a foreign country
Income taxes owed to your former state of residence
Fees for transferring Social Security to foreign banks and converting currency
Foreign health insurance (Medicare doesn't cover Americans living abroad)
Foreign real estate investments
Foreign securities investments
Estate Planning - especially if you want to transfer foreign assets after your death

Retire to the American Territories of Puerto Rico, the US Virgin Islands, American Samoa, Northern Mariana Islands or Guam

If dealing with these legal and financial problems overwhelms you, it is important to know that you can move somewhere inexpensive and exotic without the complications mentioned above.  Rather than live in another country, you could choose to move to one of the U.S. territories.  Living in Puerto Rico, the U.S. Virgin Islands, American Samoa, the Northern Mariana Islands or Guam will give you all the advantages of retiring somewhere far away and romantic, without the necessity of learning a new language, finding foreign lawyers, securing foreign health insurance, and worrying about the complications of filing foreign taxes or owning property in a foreign country.

Living in Puerto Rico

While living in Puerto Rico is not as cheap as living in a third world country, rents are affordable once you get outside of the major cities like San Juan.  You do not need a passport to travel to any of the US territories.  In Puerto Rico, there are no inheritance taxes.  If you buy land in Puerto Rico, consult with an attorney, and make sure that you have title insurance and a clear legal title to the land in order to avoid future legal complications.  However, the good news is that there are no restrictions on American citizens who want to own property in Puerto Rico.  Puerto Rico has beautiful beaches as well as gorgeous mountain towns.  There are a variety of climates from which to choose.  In addition, your Medicare is valid in all the US territories.

Living in the U.S. Virgin Islands - St. Thomas, St. Croix and St. John

Like Puerto Rico, if you move to the U.S. Virgin Islands you do not need any special documents.  You can travel freely to and from these tropical islands.  Among the islands that make up the U.S. Virgin Islands are St. Thomas, St. Croix and St. John.  If you have a beloved pet, it is possible to bring it with you when you move to this Caribbean paradise.  Some cell phone carriers offer free long distance to the mainland.  There are currently no large malls on the islands, although there are a few popular stores such as Tommy Hilfiger and Polo.  The weather is fairly constant, with high temperatures normally in the 70's and 80's.  Severe rain is unusual.  There is no sales tax or state tax.  New residents should also realize that this is a laid back, slow paced Caribbean territory, so don't expect things to happen on a mainland schedule.

Living in Guam and the nearby Northern Mariana Islands

Guam, in the northwestern Pacific Ocean, along with the other Northern Mariana Islands, is a beautiful island territory that is often compared to the smaller, less populated islands of Hawaii.  Pets can be brought here after a short quarantine period.  It is a pretty island, and the high temperatures are typically in the 70's and 80's.  It is a popular area for anyone who loves to scuba dive or snorkel.  It is very laid back, with low speed limits and slow moving traffic.  It is also only a four hour flight to Japan and South Korea, if you want to vacation in one of those destinations.  There is a large U.S. Navy base located on Guam and, like the other territories, U.S. laws are enforced there.

American Samoa

Another option is to move to American Samoa, in the South Pacific.  The disadvantage is that it is along way from the mainland of the United States and it is an expensive flight home.  However, most of the 55,000 to 60,000 residents speak English as well as Samoan and it is a very patriotic location, with the highest level of military recruitment of any state or territory.

Sources:

http://www.fool.com/investing/general/2014/08/24/retirement-more-boomers-head-overseas-for-cheap-li.aspx

http://www.marketwatch.com/story/7-money-matters-to-consider-if-retiring-overseas-2012-07-26

If you are interested in other overseas retirement destinations that are outside the US, use the tabs or pull down menu at the top of this article for links to hundreds of additional articles.  You may also want to read:

Best Places to Retire Outside the US
Americans Retiring in Panama
Live in Ecuador Comfortably on Social Security
Retiring in Luxury to Hua Hin, Thailand

You will find additional articles using the tabs at the top of this page ... particularly the one that focuses on places to retire overseas.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo or modern Puerto Rico courtesy of www.morguefile.com

Best Places to Retire in the United States on $100 a Day

Whenever I find a high quality list of good places to retire, I try to pass that information on for my readers to review.  In 2012, AARP Magazine and AARP.com released their 2012 list of great places to live on $100 a day.  This amounts to $36,500 a year, which they estimate would result in an after tax income of $27,375 a year or $2281 a month. (Note:  Due to inflation, I suggest you add 3% to the home prices and cost of living for every year you read this after 2012.  In other words, if you are reading this in 2015, add 9% to the financial figures you see here.  The principle still remains, however, that these locations are affordable and could be good retirement locals for people who will be retiring on Social Security alone.)

This level of income is well within the reach of many retirees, especially couples.  If one spouse has Social Security benefits of $2000 a month and their spouse will receive $1000 a month, they could afford to retire in one of these communities. 

One of the requirements that AARP had in determining the best places to live on $100 a day was that they had to have "affordable luxuries".  They defined this as cities with cultural attractions like museums or symphony orchestras, sports teams, great places to eat, and homes that sell for about $192,000 or less.  In those instances in which I have spent time in a city, I have added my own comments to the AARP list.

2012 List of Best Places to Live on $100 a Day (Prices May be 5 to 10 Percent Higher, Now)

San Antonio, Texas:  San Antonio is a charming town that is sunny 263 days a year.  The median home price is $135,000.  There are plenty of libraries, museums, golf courses and other affordable luxuries in this city.  As a former resident of Texas, we have visited this city several times during the months of July and August and it is important to disclose that San Antonio gets HOT in the summer.  However, one delightful way to cool off is to take a stroll along the famous Riverwalk (pictured above) and perhaps have a cool beverage in one of the numerous sidewalk cafes.  It's right across the street from the Alamo.

Roanoke, Virginia: Roanoke is in the Blue Ridge Mountains of Virginia.  It is sunny 217 days a year and has a median home price of $151,500.  The city hosts half a dozen festivals every year, and the downtown area has a planetarium, theater and museums.  One of our daughters went to college in nearby Lexington, Virginia and you should know that this town is about a four hour drive from Washington, DC, in a very rural part of Virginia.  However, it is also in an absolutely gorgeous part of the United States, and is a lovely location for enjoying fall foliage.

Las Cruces, New Mexico:  Las Cruces is in the high desert of New Mexico, which means you can expect very hot summers.  We have stayed in this town while driving across the country and love the desert landscapes.  However, the scenery may not appeal to everyone.  There are 287 sunny days a year, and the median home price is $148,000.

I have not stayed in the remaining towns on the list, so I will only list the main statistics here.  To read more, you can see the full descriptions at Best Places 2012.  I just wanted to make sure that I brought these great cities to your attention, so you could add them to the locations you are considering for retirement.

Spokane, Washington:  Spokane has 176 sunny days a year, with a median home price of $145,000.  It's a great city for people who love outdoor sports, whether it is fishing or skiing.  As most people realize, Spokane is much rainier than many other popular retirement locations.  However, we have friends who retired in this area, and they love it!

Eau Claire, Wisconsin:  Eau Claire is another location that is popular with people who enjoy outdoor sports, especially in the winter.  It has 200 sunny days a year and a median home price of only $121,100.  It is also home to a branch of the University of Wisconsin which provides lots of cultural, entertainment and adult education possibilities.

Morgantown, West Virginia:  Morgantown is a small college town in the center of Appalachia.  It boasts an excellent healthcare system.  There are 185 sunny days a year, and a median home price of $168,900.

Pittsburgh, Pennsylvania:  Pittsburgh is no longer a city that is defined solely by the steel industry.  With a wonderful symphony orchestra and a beautiful waterfront, it has become popular with retirees.  The 194 sunny days and median home price of $106,500 is very appealing, too.

Omaha, Nebraska:  Omaha is a Midwestern city that has become popular with high-tech companies in recent years.  It has a symphony and the largest community theater in the United States.  Omaha has 193 sunny days a year, and a median home price of $123,500.

Grand Junction, Colorado:  Grand Junction is a lovely town only a few hours away from the gorgeous ski slopes of Vail and Aspen.  It also has 214 sunny days a year, and a median home price of $159,800.

Gainesville, Florida:  Gainesville is home to the University of Florida, as well as the Florida Museum of Natural History.  It has 205 sunny days a year, and a median home price of $125,000.  Florida has long been considered a retirement mecca because of low home prices and low taxes.  It does get very hot in the summer.

Here is information about other wonderful places you may want to put on your retirement list:

The Best Sunny Places to Retire
Cheap Places to Retire
Best Places to Retire Outside the US
Finding Niche Retirement Communities

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo of the San Antonio Riverwalk courtesy of www.wikipedia.com/commons

Pros and Cons of Social Security Privatization

Social Security privatizaton has been under consideration since George Bush suggested it in 2005.  However, after the Great Recession hit in 2008, many people were shocked to see their stock portfolios and mutual funds crash.  Those who were forced to retire in 2009 were frequently left far worse off than they had ever anticipated.

Recently, the subject of Social Security privatization has resurfaced because of the nomination of Paul Ryan as the Republican candidate for Vice President.  In 2010, Mr. Ryan proposed in his work "Road Map for America's Future" that workers should be allowed to divert one-third of their Social Security taxes into private accounts that individuals could invest and control.

Politics aside, this is a subject that needs to be respectfully analyzed.  What are the pros and cons of Social Security privatization?

Pros of Social Security Privatization:

My husband has been an institutional stockbroker for 41 years.  He has pointed out to me that people in the investment business would stand to earn much more money, since billions of dollars would be invested in the stock market.  This would provide a huge influx of capital that would be invested in large corporations, mutual funds and financial markets.  This would raise incomes for people in the investment business.

In a bull market, successful investors could make more money than the guaranteed amount from Social Security. During those bull market years, people could retire with a large nest egg, which is what Mr. Ryan concluded in his analysis of the benefits of privatization.

Cons of Social Security Privatization:

If people could remove money from their Social Security investment accounts over the years for things like down payments on homes, medical costs or educational expenses, many people would raid their accounts regularly, just as they now raid their IRA's.

However, it is possible that raiding Social Security savings would be strictly forbidden.  Even so, not everyone would retire in a bull market.  Every few years, some people would be retiring in a bear market, which could mean that they would be worse off than if they had chosen to take traditional Social Security.  It would be a type of Russian roulette.

Some people would make investments that turned out to be disastrous.  Remember those who invested in Enron or put all their retirement savings with Bernie Madoff?  In both cases, they lost nearly everything.

For those people who did choose to invest one-third of their Social Security taxes into private accounts, and lost it, their traditional Social Security benefits would be cut by one-third.  Most retirees can barely survive on Social Security alone right now.  Losing one-third of their benefits would be devastating.

People can already put money in personal retirement accounts that they manage themselves.  Unfortunately, research shows that many of them spend that money during the first few years after they retire, rather than spreading it out over their lifetime.  Although investment planners recommend that people never withdraw more than 3% - 4% of their retirement savings in a single year, far too many people exceed this amount and run through their savings quickly. 

Would the government have to spend substantially more on low cost housing for the elderly, special supplemental payments and food stamps for all those who lost that portion of their Social Security taxes that they had managed and invested themselves?  Would the government be spending less on Social Security, only to spend more on providing supplemental income?  Although it is impossible to predict the future with absolute assurance, it is possible that what started out as a Christmas gift for people in the investment field could become the Grinch who stole Christmas for future generations of taxpayers and retirees.

Other Options for Saving Social Security

There are ways, other than privatization, that could help put Social Security on solid ground.  Social Security taxes could be collected on incomes above $110,000.  The retirement ages could all be raised by one year, including the age of early retirement, which is currently 62.  In fact, the age of early retirement could be raised to age 64.  If someone is disabled, they could still collect disability.  However, able-bodied people would be better off waiting to collect Social Security until age 64, at the very least.  These modest adjustments would insure that Social Security benefits could be paid in full for many decades.  (Disclosure:  I am 63, so these changes could affect me.  However, if they strengthened Social Security, they would be worth it.)

Another suggestion that could be made to Social Security is raising the tax from 15% (half paid by the employers and half paid by the employees) to 16%.  Some people have also suggesting reducing the Cost of Living Adjustments that retirees currently receive.  They would still receive a COLA, it would just be smaller.  Needless to say, theses ideas are not popular, but they would be effective in saving Social Security for future generations, and they may honestly be the changes that must be made.

Conclusions:

There are certainly both pros and cons to the idea of Social Security privatization, and undoubtedly there would be both winners and losers with this change.  However, since it seems to be a topic of consideration again, it is important that we carefully discuss the advantages and disadvantages, as well as other options for saving Social Security.  What do you think?

Other articles that may interest you are:

Do You Need a Million Dollars to Retire?
Retirement Deferred by Parent Student Loans
Retirement Income from Annuities or Investment Income
Cheap Places to Retire

You are reading from the blog:  http://baby-boomer-retirement.blogspot.com

Photo courtesy of www.morguefile.com