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  • Planning for the Different Phases of Life

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  • Planning for the Different Phases of Life

    The stages of our lives were described rather succinctly in James Hallowell’s nursery rhyme “Solomon Grundy” (c 1842):

    Solomon Grundy,

    Born on a Monday,

    Christened on Tuesday,

    Married on Wednesday,

    Took ill on Thursday,

    Grew worse on Friday,

    Died on Saturday,

    Buried on Sunday.

    That was the end,

    Of Solomon Grundy

    I particularly like this portrayal of the stages of life because of its brevity.  As we look more deeply into its significance, our greatest anticipations are largely focused on our “Mondays,” “Tuesdays,” and “Wednesdays.”  While not without their own challenges and heartbreaks, our “Mondays,” “Tuesdays” and “Wednesdays” are filled with hope, joy and anticipation.   However, the last stages of our lives are frequently viewed with apprehension if not ignored outright.  More often than not, any effective planning is avoided until a crisis is reached. 

    The services we provide to our clients necessarily evolve as they and their families move through these stages because both their needs and interests change.  I have found that the greatest challenges in planning have been getting clients to address the last “days” of their lives because reflecting on their own future infirmity and death seems both unpleasant and morbid.   (As this may sound right now.)    I cannot tell you the number of times a client has said “if I die” when the subject is brought up.  Typically, most people will engage in retirement planning, and some may participate in basic planning for extended illness or infirmity, but comprehensive planning is something they (and we) tend to ignore until some life-changing event appears on the horizon. 

    We have read a lot about the aging Baby Boomers (1946-64) and their special needs. Many of the articles I have read seem to focus on transitioning business ownership to successors, how to transfer critical business knowledge to successors, how to ensure the next generation views our services as invaluable, or addressing replacements to the impending loss of fee revenues as Boomers pass. We recognize that they will require substantial support during the latter stages of their lives.

    The “Sandwich Generation” faces unique challenges in both raising children and providing care and financial support to their aging parents.   Those individuals grouped under the “Sandwich Generation” classification include late Baby Boomers and the early members of Generation X (1965-80) although Boomers are gradually aging themselves out of the classification and becoming the object of care and support from their children.  According to the 2013 Pew Research Center Survey, The Sandwich Generation: Rising Financial Burdens for Middle-Aged Americans, 62% of middle-aged Americans (40-59) provide financial or other support to a parent and are also raising a minor child or providing financial support to a grown child.   For those providing financial support to their parents, 72% report their financial support is necessary in order to meet their parents’ ongoing financial needs.

    As might be expected, members of the Sandwich Generation report significantly more stress in their lives than individuals who only have one generation to care for.  The financial stress of supporting two generations is considerable as 41% of this generation report either only having just or not having enough to meet their own basic needs as compared to 28% of individuals supporting only one generation.   In terms of the type of care provided, 71% personally provide not only financial support, but also assist with managing their parents’ affairs, assisting with daily care, and also provide emotional support.  

    Time constraints seem to be the largest source of stress for the Sandwich Generation as 31% report being constantly rushed to complete their most important duties. One would think that managing both the needs of their parents and their children would lessen their quality of life, but counterintuitively, the report suggests 83% of Sandwich Generation adults report being at least “pretty happy” in their lives as compared to 79% of other adults.   The main stressors seem to be on ongoing time commitments, a lack of breaks, conflicts with children’s schedules, and locating resources needed to provide care and support to their parents.  

    The article CPAs Go Slow in Adopting ElderCare / PrimePlus Practices (2005) reported that CPAs have been slow to embrace the services clients may require during their latter stages of life.  Significantly greater tax (87%) and estate planning services (80%) were provided to clients than any other services in demand by clients.  Some of the reasons for not embracing nontraditional services were the perception that such services would only be demanded by high-income individuals and there were insufficient individuals in their markets to justify providing the services.   Mainly, it suggests a perception that such services are outside of the firm’s scope of competencies, particularly in the areas outside of traditional income tax or estate tax planning.   

    My wife, Terri, and I are members of the Sandwich Generation and are personally experiencing the challenges of caring for both our child and parents.  In addition to being owners of a CPA firm, we have a very active teenage son, an adult daughter, grandchildren, and are also facing increasing responsibilities in caring for the needs of our parents.  Terri’s mother was still living until very recently.  Terri was her mother’s financial and medical agent.  Her older sister, a retired nurse, helped by providing medical care to their mother.  Her help substantially reduced the stress in caring for her mother.  In the latter stages of her life, she began to fall a lot, so Terri moved her into an assisted living facility.  After losing her vision, Terri had to move her into a nursing home.   The move to the nursing home was particularly emotionally devastating for her mother, Terri and her and siblings.

     I am the only one of my siblings still living in Terre Haute although my sister, a registered nurse, comes home every month to help take care of my parents.  The help and support she provides is enormous.  My own mother is in the early stages of Alzheimer’s and requires substantial assistance with her finances, shopping, in planning and preparing meals (and ensuring she eats them), and taking her medications.  My father is very frail and is on in-home dialysis.  Because of his health and vision problems, he no longer can maintain their home, although he dearly wants to.  He also cannot drive, which, until recently, my mother was able to manage.  Both have varying degrees of memory problems so it is necessary for me to schedule and attend their doctor appointments to ensure they get the care they need.  They now need basic transportation, medical care, help with shopping, assistance in maintaining their home (as they wish to remain in their home until they die), help with meal planning, paying their bills, to say nothing of emotional support.   As their needs have changed, we have learned of new available sources for assistance (often with a struggle) and reworked our schedules and other commitments to accommodate their needs. Our main challenges have been with scheduling everyone’s activities because, as you can imagine, keeping track of six schedules in addition to managing our own household, our firm, and client relationships, is becoming an increasingly daunting task, even more so during busy season.    We have often struggled with feelings of inadequacy as there is always more we want to be doing but cannot because of time constraints.

     As we have become aware of the increasing complexities of caring for our parents, we have begun turning to our clients to ensure they are planning for their own and their parents’ “Thursdays” and “Fridays.”  We are beginning to leverage the knowledge and relationships developed from caring for our parents to assist clients in planning for and in providing the care they and their parents may require.  We see enormous good that can be done in assisting our clients and their children work through these stages and foresee enormous goodwill that will come from proactively addressing these issues before they become crises.              It clearly is part of being a trusted advisor to our clients.  CPAs clearly hold this position in the eyes of the public: it is up to us to ensure we can meet their expectations.