More Americans Work Longer to Help Parents
YOUNGSTOWN, Ohio -- Nearly one in three Americans who isn’t retired is planning to work longer so they can afford to care for or provide care for their parents, PNC Financial Services Group said Friday.
PNC Financial, based in Pittsburgh, is the parent of PNC Bank.
The results of its annual survey of 1,021 adults with investable assets of $100,000 or more, PNC Perspectives on Retirement, show that three in 10 will defer retirement so they can afford to care for, or have care provided to, an older relative.
Nearly one in four -- 23% -- “dedicate half or more of their time caring for an adult relative,” the survey found.
Nearly three in 10 -- 29% -- are saving more, which breaks down to 32% of those still working and 21% of those retired.
Nearly one in four -- 24% -- is delaying luxury purchases, which breaks down to 23% of those close to retirement and 27% of those retired. And 13% have withdrawn funds from their retirement savings to care for a loved one.
Measures those close to retirement and those retired are taking include less expensive vacations and keeping their cars an extra year before trading them in, says Karen Segesto-Hauser, vice president at PNC Bank downtown.
No only are people living longer, they’re living longer than they expected, says Segesto-Hauser, head of wealth planning in Youngstown.
In the October issue of The Atlantic magazine, which focuses on old age, Gregg Easterbrook writes, “Diminishing smoking and drunk driving have contributed to [Americans living longer]. All forms of harmful air and water emissions except greenhouse gases are in long-term decline. Less smog, acid rain and airborne soot foster longevity -- the old are sensitive to respiratory disease -- while declining levels of industrial toxins may contribute to declining cancer rates.”
Among Segesto-Hauser’s clients are the children of parents who have exhausted or nearly exhausted their retirement savings. “Their parents retired 30 years ago on fixed pensions,” she relates, and inflation has eaten away much of their buying power.
She finds one finding in the survey heartening: 36% of those providing care for an older relative said, “Care giving has given them a sense of purpose and fulfillment.”
But the results also speak to the need for both parents and their children to plan for a time when parents can’t care for themselves, she says. “Start conversations on when you’ll retire and retirement planning,” she urges. Such conversations are easy to defer.
What prompts such conversations is “a life event that happens to a neighbor,” Segesto-Hauser says, a sudden reversal in health or entering an assisted living or nursing home. “We’re all invincible until there’s a serious major health issue.”
Both parents and children should meet and discuss to ensure “what documents do you have in place,” such as a will, a living will, purchasing life insurance or disability insurance, who has title to the assets involved, whether to establish a trust, power of attorney and who will ensure the parent(s) have the needed levels of care.
From her experience, the child or children who live closest to the affected parent provide the bulk of care. As to how children take responsibility for financial support, “Every family dynamic is different,” she’s found.
The important thing, Segesto-Hauser says, is to begin thinking about retirement, choosing the vehicles that will fund that retirement, and what will happen should serious illness or incapacity strike.
The Perspectives of Retirement survey, conducted by Artemis Strategy Group, attempted “to identify attitudes and behaviors of successful savers,” PNC said. Artemis conducted the survey online between July 31 and Aug. 12 across the United States, the sample being a cross section of 1,021 adults ages 35 to 75 who had a minimum of $100,000 invested in various assets, at least $25,000 of that amount in liquid investable assets.
This cross section represents 20% of American households.
One quarter of those surveyed had $1 million or more in investable assets. Twenty percent of the 1,021 were retired. Findings are significant for the total sample at the 95% confidence level with a margin of error of +/- 3%.
Copyright 2014 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.