Chapter 4: Growing Up Financially … Again
Growing up in Montreal in the 1950s as the only child in a refugee family of DPs (displaced persons), I suppose I was poor but never thought of myself as such. My father worked as a clerk in a shoe store and, eventually, as the proprietor of his own perpetually semi-bankrupt business from which, at its height, he wrested $125 a week. My mother did better as the trusted backroom waitress in a steak house patronized by some of the more colourful denizens of the city’s Damon Runyonesque underworld. (Describing a cast of characters whose subsequent prosecution in the celebrated Crime Probe that first brought Brian Mulroney to public attention in 1974, she used to say, “They’re good eaters, good tippers. That’s all I know”). But it never crossed anyone’s mind that my sister and brother (who came along later) and I would not go to university and be better off than our parents. Somehow, Aron and Chaya managed to see the three of us through McGill, Harvard and the Hebrew U. of Jerusalem, graduate and post-graduate levels, which, in turn, helped launch us into successful careers of our own. We earned scholarships, true, and I worked three jobs as a teenager, but we’re speaking here of a clerk and a waitress. More baffling still, when our parents died, they left us not only the apartment they lived in but a tidy sum of money. To this day, I can’t fathom how they did it.
In thinking about Zoomers and money, it occurs to me that my parents provide an interesting jumping-off point. Eighty-five per cent of all people 50-plus in North America are parents. So one obvious question to ask in trying to understand the financial pressures on today’s aging Canadians would seem to be: What are the chances that they can do financially what my parents did: buy a home, see their kids through school, launch them into adulthood and bequeath an inheritance on passing?
Instead, the question turns out to be: What are the chances that a Zoomer today can fulfill all of the above, plus pull off several extra magic tricks, including continuing to support adult children (and increasingly their children as well), arranging and paying for caregiving services and residences for their own elderly parents, all while trying to squirrel away enough money to finance the 20-plus additional years we’ve all recently been given, let alone enjoy themselves a little?
Remarkably, the odds aren’t all that bad. Through a combination of unique demographic and historical good fortune and their own belated ambition, a significant number of Zoomers have been able to acquire the means to underwrite the brave new world that’s been thrust upon them — the most recent shocks notwithstanding — but, even for this lucky group, only if they finally get serious. In place of the Muskoka chair and the golf course and the sun, many once-upon-a-time, would-have-been retirees are today facing 10, 15 or 20 more years of child and parent support and working to supplement savings and pensions. As George Costanza famously lamented on Seinfeld (paraphrasing Michael Corleone in The Godfather): “Every time I think I’m out, they pull me back in!”
Take the issue of adult children, the bottom half of the proverbial “sandwich generation” (or “Dagwood generation”, if you factor in paying for grandchildren’s upkeep as well). As Stephanie Coontz, a history professor at Evergreen State College in Washington and director of research at the Council on Contemporary Families pointed out in a recent New York Times article, becoming an adult in the 1950s entailed “a clear set of quick transitions.” Children finished school (university or, more often, high school), found employment, moved out of their parents’ houses and got married. In 1960, two-thirds of North American men and three-quarters of North American women had already acquired what Coontz calls “financial and residential independence” by age 30. By contrast, today less than half of 30-year-old women and under a third of 30-year-old men have achieved economic self-sufficiency. One factor has been the increased difficulty young people have recently had finding jobs in a period of sudden economic trauma; another is the progressive specialization of certain professions, which has extended the education process. A young person who wants to do accounting-specific law, for instance, or pursue a specialty in medicine could very well be in school well into their 30s.
There’s also the cultural factor. Zoomer parents have had fewer children and have tended to infantilize the ones they’ve had. It’s not that they don’t expect their kids to work hard — at school, at hobbies, at sports, at internships — it’s that they don’t necessarily expect them to work for money (i.e., they don’t exactly expect them to be mature). There was a time not too long ago when, if a young adult didn’t leave home on their own, they’d pretty much be thrown out.
Nowadays, we have increasing numbers of 20-, 30- and even 40-year-olds returning to live in Zoomer basements. In 1960, the father of a contemporary of mine generously offered to loan him the money to attend university — at prime plus one. Whatever you think of this tough love (Liz Pulliam Weston, a personal finance columnist for MSN Money, recommends letting your offspring go bankrupt if they spend more than they make), it’s clear that we now live in a brand new world when it comes to potential self-sufficiency. For the first time in recent history, successive generations of children are facing a diminished economic future compared to their parents and grandparents. Again the question: Will they be able to buy a home, see their kids through university and leave them an inheritance? Their chances seem less than stellar.
The “top half” of the sandwich presents a similar dilemma. A growing number of Zoomers have elderly parents no longer able to live alone or care for themselves. Again, not so long ago, the solution was relatively simple: aging parents who couldn’t fend for themselves moved in with their kids. It was part of the “deal.” The social safety net was the family. When I was a teenager, my father fell ill and couldn’t work for quite a while. I stepped in and took over the store, no questions asked.
Today, Zoomers with infirm parents may still have adult children living at home and are far more likely than previous generations to have both spouses still working and out of the house. This creates a caregiver issue where none used to exist. Zoomers are also more financially able to place their aging parents in nursing or retirement homes — but that too is a decision fraught with family tension and guilt. Where elderly parents have the financial means to stay in their own homes with round-the-clock care, Zoomer-aged children, all of whom are likely working, now have the added responsibility of hiring, supervising and running what is essentially a private mini-nursing home. Finally, we have ourselves to worry about. In 2006 David Cravit, author of The New Old: How the Boomers Are Changing Everything … Again (and vice-president of ZoomerMedia) ran some focus groups with people between the ages of 60 and 75. One of the questions was, “What is your biggest fear?” The unanimous answer? “Outliving my money.” A major complication, ironically, is that we’re living longer. It’s the Catch-22 of modern aging. Having money has been clearly shown to increase longevity — in some instances by up to 10 years — but longevity creates money pressures and stresses of its own.
Growing up, western Zoomers lucked out and enjoyed a long, relatively smooth post-Second World War period of political and financial security and promise. As a result, being young was a blast for most, and they’ve remained more interested in staying young than any aging generation before them. Surveys show that Zoomers today are less likely to have plans for their retirement, less likely to have an up-to-date will and less likely — in fact, highly unlikely — to have purchased a burial plot or provided for something else. In the Canadian working population, not just Zoomers, some reports indicate, nearly 45 per cent of single people have no retirement plan at all, and only a third are saving enough to cover basic retirement expenses. Part of this may be the complications of modern aging; people overwhelmed by the present tend, like Scarlett O’Hara, to cope by not dealing with the future (“I’ll think about that tomorrow”). Another part may be a complacency borne of a naive Zoomer trust (deflated in dramatic style lately) in perpetually rising salaries and markets. But a critical part of it is the process of elimination: if something has to give in the new equation of financial responsibilities for Zoomers, that something is increasingly the Zoomers themselves.
Parents of my own parents’ generation had a stern enough load as they moved through middle age into their senior years. Today, Zoomers are required to do even more: i.e., the aging game has moved into overtime. In a sense, we’re being asked to grow up twice — once in the ’50s and ’60s, when we left our parents’ homes; now, again, in our 60s and 70s, when we need to “re-up” for an extended tour of duty as providers.
What makes the situation more acute is the fact that Canada’s older demographic isn’t composed solely of well-off Zoomers whose most traumatic decision is forgoing a new car in order to fund their grandkids’ education. It also includes a large and largely invisible group of people in their 70s and 80s and beyond — many of them single women — who struggle every day to survive with dignity on dwindling savings and inadequate government pensions. Six hundred and fifty thousand Canadians over the age of 65 live at or below the poverty line. Financial “maturity” doesn’t simply mean securing our own or our families’ economic well-being; it also means advocating on behalf of those who are in trouble and who have no voice. We are a wealthy and privileged generation. Coming of age the first time meant discovering our political and financial clout. Coming of age this time means learning that we still have that clout and can use it to better the lot of all in Canada’s aging society.
Moses’ Zoomer Philosophy — which launched in ZOOMER Magazine in October 2009 — is a series of monthly essays on age and aging, and the secrets and the science to living better, longer, healthier and happier lives. The first volume of his collection is now available in e-book format on the Kobo Books website. Click here for more information.