By Dr. Charles Alonzo Peters
The recent deaths of my two grandmothers, both passing within the last month, forced me to face the reality that my own parents are getting on up in age.
And witnessing the horrors our health care system, I realize that it will be up to my siblings and me to contribute significant financial resources in order to ensure they receive the best and most dignified medical care they deserve.
No longer can Americans count on the social safety net that for so many years kept the elderly from starving on the streets. Faced with massive deficits, Social Security, Medicare, and Medicaid are increasingly subjects of debate.
Already many in Congress are itching to raise the retirement age and reduce the yearly cost of living adjustments for Social Security. Some like Paul Ryan of Wisconsin want to turn Medicare into a voucher system whereby recipients would receive a voucher to buy expensive private insurance on the open market.
The only problem – the vouchers would decrease in value relative to rising health care costs, leaving many seniors on the hook for the difference.
It’s within this environment that many Americans have found themselves part of the sandwich generation – responsible for taking care of both aging parents and their own children.
A task made difficult not only by rising health care costs but also by skyrocketing college tuition.
While I don’t have children yet, I realize that like many of my friends, my money will have to do triple duty, help raise kids and pay for college, save for my own retirement, and help support my aging parents.
Yet many Americans, especially African-Americans find themselves unprepared for the challenge. According to a recent Washington Post – Kaiser Family Foundation – Harvard University study:
Just 1 in 4 African-Americans own stocks, bonds, or mutual funds compared to about half of their white counterparts. And while only 46% of Blacks hold IRAs or 401k’s, nearly 65% of White Americans do.
Now much of this has to do with lower wages, higher student loan burdens, and our being involved in job fields that generally provide less in the way of benefits.
But this makes it all the more imperative that we stretch our dollar further and look for ways to cut costs in order to save more.
In this light, personal finance becomes more than articles we glance at in magazines, but a way of life we should embrace to ensure our loved ones are taken cared for.
It’s forced me to take a look at my own finances, and I’ve come to the conclusion that I’m behind in the game. Despite crushing student loan debt, I need to put myself into high gear savings wise – for I’m not just saving for myself but the people I love and care about.
Being savvy about money is no longer an option but a necessity.
BMWK, are you part of the sandwich generation. Are you responsible for taking care of elderly parents and your children. Have you started saving for retirement or your children’s education? If so, how did you start? If not, what’s holding you back?
Every Monday you can find great insight and tips on managing your greenbacks by Dr. Charles Alonzo Peters of MochaMoney.com here on BlackandMarriedWithKids.com.
I have been blessed with parents that planned for tomorrow. My mother retired about 4 months ago but about 10 yrs ago she went into a retirement plan at her job that she paid a little more monthly towards the medical benefit that would cover both her and my father between age 62 and 65(for her) and then there is some added benefit towards medicare once she hits 65. Their burial plots were purchased by my father’s parents decades ago(there was a sale at a cemetary and my grandparents purchased enough plots for themselves, children, and the children’s spouses) and my parents have prepaid for their funerals. Between pensions and social security my parents are and will continue to do fine. I didn’t realize until last month when my grandfather passed how important it is to be prepared for the future, I mean I knew but I didn’t KNOW.
I knew that I wanted my children to be able to go to college with as little financial burden to us and them. As soon as their social security cards came in the mail after their birth I opened savings accounts for them and monthly make deposits when we are doing our family budget. Our oldest is now in 7th grade and she is actively talking about college and we let her know that she does have money in the bank but for her to strive for scholarships to help with the costs. We have explained to her that the more scholarships she receives the more of the savings she will be able to use for something else, if she has enough money left in her account after completing her 2nd yr of college she will be allowed to take out money to purchase her 1st car…great incentive to doing the best in school!!!
I am worried about our own retirement because I don’t feel that we have put enough into it. I’ve been mentally banking on the fact that we will have around a decade between the last child finishing school and our expected retirement dates and that we will have about 5 yrs between having multiple children to support and just 1….