Author Archives: Warren Flick

Coming Home: Multigenerational Households are Growing—Part 1

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Coming Home-- Photo by Jamie Harris

Multigenerational households are growing in the United States, according to a 2010 study by the Pew Foundation. Such households were common in the early twentieth century, then they declined, reaching a relative low point around 1980. They have been rising since then, showing a distinct uptick with the recent recession. In a culture that emphasizes independence, multigenerational households generally expand out of necessity, providing further evidence that times are tough. These trends will affect the retirements of millions of Americans.

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Remember that Office To-Do List?

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Given all the aches and pains that intensify with age, it can be especially delightful to celebrate some things that were (or should be) left behind at the career place. Conquering the To-Do List in yesterday’s The Wall Street Journal may well deserve such a celebration. Many retirees gleefully toss out the old career-ladened to-do list, and despite Ms. Sue Shellenbarger’s excellent column, many of us can simply skip it. Now, back to that pain in my left shoulder …

Country Friends

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There’s still a little magic in every motorcycle ride to the country. When I was young, our family took automobile rides on many Sunday afternoons, and I always loved to watch the farms and forests roll by, imagining what it would be like to live where we passed. Sometimes my father stopped and talked with people we saw near the road.

On a recent motorcycle ride I stopped to watch a small herd of Holsteins in a roadside pasture. They were grazing slowly toward me, but once I dismounted and walked toward the fence, they turned and headed away. Their owner came out from the farmhouse across the street to say hello and ask about my interest in cows. He looked about my age, but he was smaller, more wiry.

“Pretty, aren’t they,” he offered.

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A Boy and His Turtles: Christmas 1987

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The story below is Andy’s. It is about accepting the real nature of things, which is always appropriate at Christmas. We helped him write it up, and we sent it out as our Christmas message in 1987. People in their fifties and older often enjoy remembering holidays with young children. We like remembering this one, and we hope you will like it too.

Dad said I either had to do the dishes or write the Christmas note. I want to tell you about my turtles. Last spring I wanted turtles and Mom bought two. They were small and friendly, and I named them Dribble and Drabble. When we brought them home I put them in a pan on the front porch. Kevin was there and he wanted one but I said no. Dixie, our neighbor’s dog, was there too and she ate the turtle food.

I went to play, and when I got back, Dribble was gone. I thought Dixie ate him, so I went to the garage to get a stick to beat her. Mom caught me just as I was headed across the lawn, and she wouldn’t let me go. Mom said there was no proof Dixie ate it, and even if she did, I still couldn’t beat her. The next day I drew Dribble’s picture in a notebook and he looked like this:

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New Entrepreneurs Among the Later Living

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Later life is more and more a time of entrepreneurship, says the Atlantic. One reason is the good health enjoyed by many people who have been spared a hard life of physical labor. Other reasons, not mentioned in the Atlantic, may include a growing number of unemployed among people 50 years old and above, and a growing interest in providing help to younger family members who themselves may be unemployed. Times are tough. The examples in the Atlantic are persons who have had careers, who may be already retired, and who have the interest and energy to start something new. Later life is a good time to start a business.

 

Offering Responsible Help

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The last post related how emergencies can put a retiree’s living standards at risk. Now the discussion turns to thinking and working through emergencies in ways that manage the risk appropriately.

If retirees pay regular living expenses from their investment portfolios, and then spend some of those investments to resolve emergencies, they put future withdrawals at risk. It’s different in middle life when living expenses are paid from salaries or wages, and savings are commonly used for emergencies.

Some Financial Approaches

One solution is to set aside a portion of a retirement portfolio for emergencies. A retiree with a $500,000 portfolio could set aside $100,000 for emergencies, using only $400,000 for ordinary living.  If the withdrawal rate is 4 percent, the retiree would withdraw $16,000 annually for ordinary expenses. The $100,000 emergency fund would be left alone.

In addition, retirees have other options:

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Risk Retirement for a Loved One?

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An idealized retirement story might sound like this: Saving for years, retiring from work, then taking planned withdrawals on through retirement. It sounds orderly and easy, yet many retirees know it is anything but.

Emergencies arise, not only in a retiree’s life, but also in the lives of loved ones. Ordinary life includes a leaky roof, a needy middle-aged son or daughter, or a troubled grandchild. If retirees have savings, even if they rely on them for monthly living, there is the ever-present urge to liquidate savings and put some money on the problem.

An Ugly Trick

There is an ugly trick with the urge to be generous, and it’s subtle.

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The Oldest Generation—Income, Location, Disabilities, and Health Insurance

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Last time we introduced a Census Bureau report that describes some characteristics of the oldest segment of our population—those 90 years old or older (90+). The group is small, mostly women, and mostly widowed. Still, about three-quarters of them live in households. Less than one quarter are institutionalized.

The median income in the group was $14,760 (2008 dollars)—that’s annual, per person, personal income. For men, it was $20,133, and for women, it was $13,580. Social Security has become nearly universal among this group: 92.3% of them receive it, and it is about 48%, or almost half, of the median personal income. The rest comes from investments, public assistance, other retirement income, or other sources.

During the same time, the median annual per person income in the US was about $27,500. The 90+ group has a per person income of about half the overall population.

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The Oldest Generation

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All of us living in the last half can benefit from a portrait of the oldest among us. We can’t foresee an individual life, but we can guide ourselves more clearly if we know some averages or trends that describe our oldest brothers and sisters.

In November, 2011, the Census Bureau published a new report entitled: “90+ in the United States: 2006-2008,” in which it characterizes this oldest segment of the U.S. population. (PDF here)

The generation 90 and over is small. There were about 1.8 million (mm) people 90 and over during 2006-2008, which was about 0.6% of the total US population. About 1.55mm (88%) are white. Women far outnumber men: there are about 1.3mm women, and about 0.46mm men—almost a 3 to 1 ratio.

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