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Family Matters: The Money Squeeze
Mon April 16, 2012
One Roof, Three Generations, Many Decisions
Originally published on Wed May 23, 2012 9:52 am
Part of the Family Matters series
The Great Recession slammed into all age groups, flattening the career dreams of young people and squeezing the retirement accounts of middle-aged savers. It financially crippled many elderly people who had thought they could stand on their own.
To cope with the hard times that began five years ago, millions of families pulled together — stacking two, three, even four generations on top of one another. Between 2007 and 2009, the total number of Americans living in multigenerational households shot up more than 10 percent, from 46.5 million to 51.4 million.
That's the largest number of Americans living in multigenerational households in modern history, according to the Pew Research Center, a nonpartisan research group.
Now, even as the recovery gains steam, record numbers of people are still living under a roof where adult children, middle-aged parents and elderly grandparents must learn to live together.
On Tuesday, NPR's Morning Edition begins a two-month exploration of this increasingly common experience. In a series called "Family Matters," reporter David Greene will take listeners on a journey, deep into the lives of three families struggling with issues of money, duty and love.
At NPR.org, stories will delve into the financial issues facing these three families — and millions of others like them. Among the topics to be examined: the need for financial planning; the options for elder care; costs of do-it-yourself care for the elderly; long-term care insurance; college costs; and reverse mortgages.
While people of all ages are living in multigenerational homes, this series will focus on those in the middle — the millions of people sandwiched between their aging parents' growing needs and their children's "launch" costs — from first-car purchases to higher education.
The baby boom generation often is defined as Americans born between 1946 and 1964. But the peak of the boom covered the mid-1950s through the early 1960s. Those are the people now in their late 40s and 50s — the group that may have assumed these would be their best years financially.
In the past, this middle-age phase marked the highest earning and saving years — the period after the kids were grown and the parents gone. But for this generation, the middle years have gotten tougher.
First, this group tended to marry and have children later than previous generations. And "launch" times have gotten longer for their children as the need for education has increased. As a result, people in their 50s often are still supporting children who, in theory, are adults.
Meanwhile, elderly Americans are living longer. In 1950, U.S. life expectancy was just over age 68. Today, it's nearly 79. In many cases, as people live longer, they are piling up higher medical and personal care costs, while draining the savings that might otherwise have served as an inheritance for younger generations. The price of getting help, such as that provided by long-term-care insurance, has gotten much steeper in recent years.
Yolanda Hunter, 43, is one of the people who opened her door to NPR. The Maryland resident is struggling with the costs — physical and financial — of caring for her grandmother. "I used to hear about people saying, 'Oh you know, we got to put our parents in a home, we can't deal with it anymore,' " she said. "And I used to think, 'Oh, how cruel are you?' you know, but now? I understand how people get to that last possible moment — it takes over your entire life."
And just as record numbers of families were dealing with the impact of having slow-to-leave children and long-to-linger parents, the Great Recession hit. That made everything tougher.
During the long and brutal downturn, real estate values plunged and retirement accounts shrank. In 2004, the average household net worth was $95,010 — including home equity. After the recession hit, that figure plunged to just $70,692 by 2010, according to Pew data.
So now, the generation in the middle faces an array of financial pressures. How can they make it all work — especially in a multigenerational household? It's a juggling act that can be financially and physically draining. It can also be deeply rewarding emotionally. It is about duty, caring and joy. It's life.
LYNN NEARY, HOST:
This is MORNING EDITION, from NPR News. I'm Lynn Neary.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep.
More and more Americans are living in multigenerational households - three generations or more under one roof. People do this for financial reasons, emotional reasons - or both. But many were not expecting to be living this way at this time.
Our colleague David Greene has been getting to know three families like this, and we're going to spend much of the next eight weeks with them, in a series called "Family Matters." That's because these families face almost every kind of financial decision - including, possibly, decisions like the ones you face.
David Greene, welcome back.
DAVID GREENE, BYLINE: Thanks, Steve.
INSKEEP: So who have you met?
GREENE: These three families you mentioned, they're really living out these stresses and pressures, and in so many different ways. And I want to get right to their voices so you can really get a sense for who they are. And let's start in Harrisburg, Pennsylvania. And you're going to hear now the voice of an 87-year-old woman named AnnaBelle Bowers. Her family calls her, lovingly, Snutzie. So she has two granddaughters who have, literally, opened their homes to her. She lives half her time with one household, half with the other.
These are families, Steve, that are dealing with all these other pressures - you know, how much money to put away for retirement, how to pay for college for their kids. And Mrs. Bowers, she knows she's adding to their pressures. And when I spoke to her, she did something that we've actually been hearing a lot. She broke up the tension in the room with a little bit of laughter.
How do you feel when you see your family taking care of you? Like...
ANNABELLE BOWERS: Well, I hate it. I just feel like I'm a burden, but the girls don't even think that way of me. I make their day miserable, but I make it.
(SOUNDBITE OF LAUGHTER)
GREENE: So Steve, we'll get to know that family. Now, let me take you to another family in Maryland, right outside Washington, D.C. There's a 24-year-old named Nicholas. He's living at home. He was exploring this career in the arts. But when his grandfather - who's in his 80s - started really suffering from dementia and moved in, Nicholas has been thinking about trying to find a career that'll make him more money so he can help out with the family. And everything is so fragile under this roof.
Nicholas had a friend staying over one night and when his grandfather, who has dementia, woke up and saw this unfamiliar face, it just threw the whole day off.
NICHOLAS: I had a friend on the couch, and Grandpa came out of his room. He automatically asked, who is that? And that was what threw everything off. So from that point on, it was no, I'm not getting in the car; no, I'm not going to day care; no, I think I'm going to stay here today - like, whatever the case may have been.
GREENE: It threw everything off, Steve; meant that family members had to decide whether to skip work that day to take care of Grandpa. And that brings with it all sorts of questions about, you know, making money that day.
And finally, the last family we're going to meet is right outside Baltimore, and it's these three generations of women. And in the middle is Geneva Hunter. And she lives with her 90-year-old mom, who's fallen ill. And Geneva is dealing with a lot of emotions. One, she's watching her mom fade away, which is something that so many people in her generation are confronting today. But she's also watching her own daughter sacrifice everything, including a job, to be the caretaker, to take care of her grandma full time.
GENEVA HUNTER: I've always wanted the very best for her. I want it even more now. I do want her to go back to work and be happy. You know, I want her to have her life back.
GREENE: And so, Steve, just some of the voices we'll be hearing. Those are voices from three different families who we'll be following.
INSKEEP: Amazing to hear people having to change careers; people missing work; people going through this process of slow, slow grief. Is this something that any of your families expected to happen to them?
GREENE: No. And that's really what we've been hearing about. I mean, families can do all the preparing and think that they're on top of everything. But when an elderly family member falls ill, when something happens, there's this flashpoint where you have to decide, you know what? The best option is just to bring everyone together under a single roof. All the financial questions, all the emotional stresses - these families say they just had no idea what to expect, and they weren't prepared.
INSKEEP: Well, maybe this series of financial stories over the next eight weeks is going to help a lot of people in that situation, and inform many people besides. David, stay with us. I want to bring another voice into the conversation.
Paul Taylor is executive vice president of the Pew Research Center. He's been doing demographic research on families like the ones we've been hearing. Is that right, Mr. Taylor?
PAUL TAYLOR: Yes, we have.
INSKEEP: How common are the stories you just heard?
TAYLOR: It's becoming more and more common. We estimate that about one in six Americans live in multigenerational family households. That's 54 million Americans. If you go back 30 years to 1980, only 28 million Americans. So this phenomenon has doubled in size, in the last generation or so. And it has been spurred in recent years by the rotten economy that a lot of people are having to cope with.
INSKEEP: People just can't afford to live independently. Children can't get jobs, and older folks can't stay independent.
TAYLOR: And you know what? It turns out to be a very successful, unofficial anti-poverty program. Families living in these circumstances, if you look at their overall median income, it is lower than the national average. But they also have lower poverty rates. They have figured out a way to pool resources, to make do, and to stay above a floor of poverty better than other Americans in their same economic circumstances.
INSKEEP: Now, let's not assume it's all bad. There can be something heartening about this. You're staying close to your parents. You're staying close to your grandparents. But it's also given rise to this term "the sandwich generation." What is that?
TAYLOR: The sandwich generation is - are people in middle age, and it happens to be a very large generation. That's the famous baby boom generation that was born right after World War II - 75 million. They're in their late 40s to their early and mid-60s. And they have a greater likelihood than any other generation their age to have living parents. They also have a greater likelihood to have not only minor children that they're still caring for, but young adult children they're still caring for, because we have the phenomena of either the boomerang generation or the never-launched generation - the 22-year-old, the 28-year-old, the 30-year-old who's having trouble finding that first job. So the caregiving is not done grudgingly. The caregiving, as you say, is generally done quite lovingly.
INSKEEP: Now, we got started on this series because people here were talking about financial literacy - about the difficulty people have in navigating the increasingly complicated financial decisions that they face. How knowledgeable do you think people are about the financial decisions that they're making, and that they have to make day-to-day?
TAYLOR: You know, my guess is, from looking at the data, that people who wind up in multigenerational family households weren't expecting it, weren't planning for it. But, you know, there's a great line from Robert Frost: A home is the place where, when you have to go there, they have to take you in.
People run into circumstances - whether they're older and they're in failing health; whether they're in middle age and they've lost a job, or their homes have been foreclosed on; whether they're young adults and they can't get started. And they have to adjust. It is the ultimate social safety net. I think some of it has to do with the tougher economy, so you have to double up. Frankly, some of it has to do with the fact that in terms of money, most of the household wealth in this country is parked at the upper end of the age scale. There's a lot of wealth. This is the healthiest and wealthiest generation of older people that we've ever had. So while there's a lot of caregiving that boomers give to their elderly parents as their health begins to fail, there's also a tremendous amount of financial assistance that the elderly parent gives to the boomer.
INSKEEP: So we're going to be learning right along with these families - and with NPR's David Greene, who's still with us. And David, where do we go next week as we begin this eight-week journey?
GREENE: Steve, we're going to spend some more time with the Shamone-Gilmore family from outside Washington, D.C. And that's the family of Nicholas, the 24-year-old you heard from. It's interesting - I hear Paul Taylor talking to you about this idea that the caregiving is not being done grudgingly; it's being done lovingly. And one of the real questions that this family faced, and a lot of families in the country face, is - you know, if you decide to think about a nursing home or in this case, an adult day center - you know, if that's the reality for your family, you have to do that because you can't care for an elderly parent, you know, 24 hours a day. You need to keep a job. But can you still offer loving care to this member of your family while using a facility like that? And we're going to take a trip into an adult day center in Maryland. And so that's what we'll be exploring next week.
INSKEEP: Looking forward to it. David Greene is our correspondent. Paul Taylor, of the Pew Research Center, is with us here. And the series is "Family Matters." You can follow the series online, and see photos of all the families we're following, at npr.org. Transcript provided by NPR, Copyright National Public Radio.