Longevity in our nation has been moving upward throughout the last 35 years. According to the National Center for Health Statistics, from 1975 through 2011 the average life expectancy has risen from 76.6 to 81.1 for women, and from 68.8 to 76.6 for men.
Combined, the average married couple will need to provide for an additional 12.3 years of life during their retirement! It’s not surprising that many are worried about outliving their savings.
Though it doesn’t go back quite as far, the New Jersey Center for Health Statistics has similar data that shows in New Jersey the average age life expectancy has gone up by 2.7 years between 2000 and 2011.
More adult children are supporting aging parents than ever before, and concern is on the rise. A 2012 Merrill Lynch Insight Survey of 1000 investors reports that 47% of those between 35 and 50 have ‘high concern’ for an aging parent, 15% more than the 32% reported in a similar study in 2010.
A later study in 2013, “Family & Retirement: The Elephant in the Room”, suggests that the #1 choice for longer term care is to remain in your own home, yet two-thirds of the respondents 50+ suggested they had not taken any steps to maintain their independence.
Some of the popular ways of transferring money upward include annual gifts, paying medical and educational bills, intra-family loans, and upward trusts. There are pros and cons associated with each method, from minimizing the tax burden to emphasizing the security and correct usage of the funds.
If you are considering providing support for your parents, or how you might have to in the future, please talk to us about some of the best ways to go about it. Give us a call at (732) 255-5000 or fill out our online contact form.