Marketeers have created various catchy or cutting edge terms to describe different demographic groups. Over the years, we’ve come to call people born in the huge post war surge Baby Boomers, those born in the age group following the Baby Boomers (typically those born in the mid 60s to the early 80s), Generation X, followed by Generation Y, or Millennials.
A definitely less glamorous sounding name, but certainly one that is spot on in its description is the “sandwich generation”. This refers to middle aged adults, our erstwhile Generation Xs (50 to 60 year olds) who are sandwiched between taking care of their elderly parents while they are facing the challenges of getting their own children safely to adulthood.
The “sandwich” demographic is a fairly recent addition, principally as a result of increased longevity while supporting children for longer has happened as a result of children studying into their mid 20s or not being able to get onto the property ladder.
According to the Journal of Financial Services Professionals, at the beginning of the 20th century between 4% and 7% of people in their sixties in the US had at least one parent still living. Today, that figure is nearly 50%. At the start of the 90s, 25% of young adults between the ages of 18 and 24 in the US lived with their parents. By 2000 the number had more than doubled to 52% and is still rising, leading to a steady increase in the sandwich demographic.
As any “sandwicher” will tell you, there are times when being the parent to your parent and to your grown up children can be very taxing both emotionally and financially.
How do you tell your Dad that it’s best his driving licence is withdrawn? When your friendly grocer tells you that your mum has paid him three times in the past three days for an outstanding bill, how do you broach the subject about changing signatories on her account?
Tact is paramount, as the challenges to elders are just as daunting. After all, loss of control can be shocking and frustrating to people who have made their own decisions all their life.
From various situations we’ve seen with clients, each situation needs to be assessed on its own merits. Of course planning ahead is always the best and ideal scenario.
But we have found that a few pointers listed below always help to make the transition a little smoother.
Have all information available. No one can plan without proper information.
Elderly parents are often reticent to share information on their assets with their children. We often meet clients who have to trawl through reams of papers, statements and files, trying to piece a financial picture together. It is important that elders discuss their financial situation with their children, all the more so if one has been widowed.
For starters, anyone wishing to go into state care will have to give a statement of assets to the government; on the other hand, anyone seeking to go into private care needs to budget for the stiff costs. Furthermore being aware of all assets could provide an opportunity to free totally dormant funds or money that could be better invested to meet current needs.
Keep your financial affairs neatly filed and ensure that at least a spouse or child knows where your files are kept.
Seek professional help
This counts on all fronts, medical, legal and financial.
Deal with people you both feel comfortable with who are aware of your situation. Keep them in the loop on all developments. If your parents do not have a will encourage them to get one done to avoid any problems later on. Discuss the need for a power of attorney and in whose name this will be. Agree on a reporting structure.
It is essential that the “responsible parent” keeps records of all financial transactions and agrees on a half yearly or annual report with both the financial advisor and the family. Agree who your adviser can give information to at the start of your relationship and ensure a clear line of communication. As unfortunate as it may be, sibling rivalry can rear its ugly head with real or imagined stories of money being siphoned off for personal benefit.
Understand whose money it is
This is a crucial point. Being responsible for paying your parent’s bills, assisting them with their investments, tax returns etc doesn’t mean that the money is no longer theirs. It is important to respect their wishes and ensure they are comfortable with the decisions taken. Granted, this can at times get tricky, especially as parents age and lose touch with their actual needs and requirements. People often derive a sense of security just by knowing money is in the bank – even if the balance is well above their income needs and earning next to nothing.
I was recently gently amused when this lovely, thoughtful, still very much on top of things, 85 year old client was discussing how much to invest into a bond with his son present. His son was matter-of-factly telling him that between his two pensions and income on investments he was more than well taken care of and didn’t realistically need to keep more than a few thousands in his account. The elderly parent was keen to quip “I always tell you my generation was raised to always plan for a rainy day”. The meeting was interrupted by a phone call to the younger parent from his son to say that he got accepted for a student Exchange and would he be able to “loan” him some money for living expenses.
My only words of consolation to the sandwiched parent was that he still had to graduate to Club Sandwich level – ie aging parents, adult children and grandchildren
Local Market: MSE Index continues to climb
Equity turnover on the MSE rebounded to the €1.9 million level, nearly 75% up from the previous holiday shortened week, with activity in the banking sector accounting for more than 51% of this total. In all, 18 equities were active with 8 closing in positive territory, 4 closing down while 6 stayed put.
The MSE index rose to a new 2017 and multi-year high of 4,741.747. Although the increase was just a meagre 1.5%, this led the MSE index to close in positive territory for the second week running.
Malta International Airport plc (MIA) led the list of gainers with an increase of 2.95% to a four month high €4.151. MIA started the week at €4.07 advancing to €4.15 on Tuesday and maintained this level until the end of the week. A total of 21,284 shares were exchanged for a value of €87,327.
Go plc also had a very good week up 2.01% to a 9 month high of €3.499. Go kicked off on Monday at €3.43 briefly dipping to an intra-day low of €3.40 on Tuesday before recovering to €3.46 ending the week at €3.499. Volume was a respectable 68,734 shares for a market value of €237,327. On Wednesday, Go announced that the Board will meet on Tuesday 21 February to discuss and approve the Company’s audited Financial Statements for the year ended 31 December 2016.
Simonds Farsons Cisk (SFC) made up the previous week’s drop to recover 10c, or 1.39%, and retouch its high of €7.30. Turnover was a modest 6,285 shares for a value of €45,763.
The other three positive performers of the week were FimBank plc ahead by 0.56% to $0.86, Mapfre Middlesea plc up 0.5% to €2.23 and Bank of Valletta Plc up a minimal 0.09% to €2.19.
RS2 Software plc was back on the loser’s, list dropping a rather heavy 3.74%. It started Monday at €1.76 but slid back throughout the week to close at €1.699. Volume was fairly strong with 93,124 shares changing hands for a value of just under €160,000
Malta Properties Company plc (MPC) fell back 2.17% to €0.54. Here turnover amounted to just 13,130 shares for a value of €7,188. Turnover in MaltaPost plc was equally poor as just 2,360 shares traded for a value of €4,720 for a weekly drop of 1.91%
The only other negative performer was HSBC Bank Malta plc which gave up 0.53% to €2.049. The Bank will publish its annual Financial Statements this coming Tuesday 21 February.
Trading in the Corporate Bond market totalled just under €1.8 million spread across 180 deals. The 4.25% Gap Group plc Secured 2023 bond accounted for the lion’s share with a turnover €835,488 closing at €101.5.
In Government Bonds, €6.3 million worth of bonds was traded as the prices of a number of issues recovered somewhat from the previous week. Among the most notable was the 2.1% MGS 2039 which closed 2% higher at €98.5.