Sandwich Generation: What Exactly Is It?
There is a very interesting phenomenon unfolding in the United States at the present time. During the period after World War II between 1946 and 1964, there were an inordinate number of babies born. This is called the “baby boom,” and if you do the math, you can see that these people are attaining senior citizen status right around now.
How many baby boomers are we talking about? A good way to put it into perspective is to look at Social Security Administration statistics. People that are not currently enrolled in the program become eligible for their full benefit when they are between 66 and 67 years of age. The exact age of full eligibility depends on the year of birth.
Administrators have stated that there are between 10,000 and 15,000 applications for Social Security benefits being submitted each and every day. This volume is expected to persist into the foreseeable future, because someone who was born in 1964 is not going to become eligible for a full benefit until 2031.
Clearly, the senior citizen population is a huge one, and it is getting bigger every day. Once you reach the age of 65, it becomes very likely that you will need living assistance eventually. The vast majority of people who are this old and older are enrolled in the Medicare program as a source of health insurance.
Since Medicare is intended to address the medical needs of seniors, and most of them will need help with their activities of daily living, you would naturally assume that it covers long-term care. Many people would say that it makes no sense, but whatever you think about it, Medicare does not cover living assistance unless it is considered to be convalescent care.
This is a major gap in the coverage, because it is not easy to write a check for long-term care of any kind. Genworth Financial sells financial products for seniors, and they do a good job keeping track of the current state of long-term care costs.
The median annual cost for a one-bedroom unit in an assisted living community in the Hilton Head area in 2021 was $54,000. Believe it or not, an in-home health aides cost even more at $66,924. A private room in a nursing home comes with a median annual price tag of over $86,000.
Adult Children Juggling Responsibilities
Because of the aging phenomenon coupled with the fact that many young people are remaining at home for longer periods of time, a lot of mature adults in their 30s and 40s are accepting dual responsibilities.
They are still caring for their children in one way or another, and they are simultaneously providing assistance to their parents. These individuals are members of the “sandwich generation.” That is a tough situation to be in, and at some point, many elders can no longer get the help that they need from their children.
We can potentially provide a solution if you are overwhelmed by the responsibilities that go along with being part of the sandwich generation.
Medicaid will pay for living assistance, and the Medicaid waiver program will cover in-home care costs. However, it takes careful planning to gain eligibility, because Medicaid is only available to people with limited resources in their own names.
It is possible to position assets wisely with future Medicaid eligibility in mind. This being stated, advance planning is key, because you have to give gifts or fund a trust at least five years before you apply.
We have a thorough understanding of the program and the strategies that can be implemented that lead to eligibility at the right time.
If you would like to discuss the subject with Hunter Montgomery, our doors are open. You can send us a message to set up a consultation at our Bluffton, SC estate planning office, and we can be reached by phone at 843-815-8580.
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