Please note: I raised the subject matter of this posting back in September, and it came up again in my recent posting on long range planning. Back then someone commented to me that we need to take things one thing at a time: tuition needs to be dealt with before we can go on to other problems we are facing in Klal. That is short-sighted thinking, to say the least. Please read on.
The number of visits of Bikur Cholim to friends and relatives seems to have gone up 10-fold this year. It seems like everyone has an "eppes" that is reminding people that they aren't 21 anymore. And yes, sadly, there have been funerals for those in our generation as well. Where once long ago we might have declared that we would never become like our parents, the truth is that that is exactly what we have become. The Boomers are growing older. We looked at ourselves as the movers and shakers of the world, and that movement is slowing down and we're shaking in different ways.
There's a whole slew of our friends who are already retired. Many more are almost there. Eavesdrop on the conversations when Boomers get together and you're likely to hear about the havoc that the economy is playing with retirement funds. People are worried about how they will make it for the years left, and having to face the fact that they might not make it. You'll hear about which parts of the country are the best for living in in the retirement years, which are cheaper. You'll hear a lot of doctor stories, and advice about how to stay healthy when you grow older. You'll hear the horror stories about what hospitalization and rehab can cost out of pocket. And you'll hear about those whose health has thrown them a curve ball. You'll hear about some people who are downsizing their involvement in community activities because they need to concentrate on themselves now. They can't afford the type of monetary involvement with Klal that they once could.
Yes, you also hear the latest stories about how the kids and grandkids are doing. A lot of those stories are scary as all get out. You hear of the high cost of yeshiva tuition, about how even having a "good" job doesn't mean you're going to be financially secure. You hear, more and more, about Boomers who are being asked to pitch in with money to help out kids, not with the one-time cost of buying a house (although that is there as well) but with day to day expenses, particularly tuition.
I've said this before and it bears repeating: tuition for yeshivas is the number one problem for younger adults today, but the 3-billion ton elephant in the room is what are we putting into place to handle the real concerns that are already starting to come up about an aging Boomer generation. Any solution to the tuition problem that counts on the direct and continuing help of the Boomers, of grandparents, is doomed to failure. Nor am I particularly enthused about some of the macabre statements made by some of the younger generations. When I asked one of these younger people how his children were going to make it if he didn't have the resources to support them in the way his parents have been helping out, his answer chilled me: "At that point my parents won't be around any more and the yerusha will take care of my kids."
Sorry youngsters, but my generation isn't going to be dying out quite that fast, and we may not be leaving all that much money behind either. Estimates are that we will live, on average, until our late 80's. The older you get the more money it takes to keep you going, not less. Those estimates that say you only need 80% of pre-retirement income aren't figuring in the very real and very high costs that can come with aging and that can wipe out savings. So I'm going to make public my opinion that there are TWO major concerns that are of utmost importance to Klal, and tuition is "only" one of those two. The other is what's in place or needs to be in place to handle the problems that are going to come up when the Boomers can't boom any longer and need Klal's help instead of being the ones who are the helpers now.
Any solutions and recommendations for change regarding tuition that don't factor in a loss of money from the Boomers, as well as needed expenditures for services for these Boomers, is not going to work in the long run. The tuition problem needs to be looked at both short term and long term. I did a count of yeshivas in the NYC area; there should be more than enough of them already in existence to handle the inflow of students from the next generation. In fact, we might even have too many, and mergers might be in order. Yup, class size may have to get larger, but it can be done. Then I did a count of skilled nursing and rehabilitation and senior citizen centers under Jewish auspices, ones that offer fresh kosher food and Sabbath observance. I looked at assisted living facilities that offer services for the frum. I looked at the frum social service agencies set up specifically to deal with senior concerns. Not all that many of them. When I mentioned this to someone the answer was "So we'll create those service agencies and facilities." Funded with what money?
This posting is not meant to spread doom and gloom. It's purpose is to serve as a wake-up call to those who think that there is only one major problem facing Klal today. You can't concentrate solely on one issue and leave the other to sort itself out somehow. The two issues--tuition and the aging Boomers--are locked together.
36 comments:
1) I agree that the life expectancy for Boomers and even the generation older than them is long, and people are foolish to rely on inheritance to pay their tuition / kollel bills.
2) I think that by the time (most) Boomers (ad meah vesrim) are no longer around, Jewish education will already look radically different. Schools and schooling are now radically different than they were 35 years ago, and it's unlikely the current model can survive in its present form.
Additionally: for some people, getting money from the older generation for tuition is a necessary evil. It makes them feel ashamed that even with education (that their parents encouraged and financed), and good jobs, they can't totally support their families. For other people, like the fellow you quoted, it seems like just the opposite ... almost like he wouldn't mind if the older generation keeled over right now and he'd get the cash that much sooner.
"Additionally: for some people, getting money from the older generation for tuition is a necessary evil".
I think that's one of the points of the posting--getting money for tuition from the older generation is going to stop and then what? Yeshivas assume that grandparents will pitch in for tuition. They base their budgets on counting on this money. So what will happen when this money inevitably reduces itself to a trickle? And it is inevitable.
Some boomers will work past 65, a lot won't. Some will reduce their work hours, reducing their income. It's emotional blackmail for yeshivas--and some kids--to say we can't make it if you stop working. That is not the answer. Yeshivas need restructuring to come in line with the money available to support them, without relying on an iffy source of income like the boomers.
Yes, some kids are very ashamed that they can't make it on their own despite the education and effort on their part. They don't take money from their parents gladly. But feeling ashamed isn't going to solve the problem. Changing yeshiva structure might.
Some people expecting a yerusha will be surprised that all they get is a pile of debt to be paid off after the estate sale.
I'm not a boomer, I'm tjhe next generation. And my husband and I are caught in just the situation you say is coming. 3 out of 4 of our parents have had major medical situations in the last two years. For my in laws this just about wiped out their savings. My father can't work any more. All of us kids are having to help out our parents with ceertain expenses and they aren't living luxury lives.
And then there are our own kids. All of them work and they still have trouble meeting their expenses. None of them are living luxury lives either and we still need to help out where we can. But that's the problem. We're helping out two generations and we aren't going to make it.
A horrible world where you have to choose between your parents or your kids because you just can't help both.
For too long in our modern times our leadership has been focusing on all the things they want the frum community to have without figuring out the costs in money and in energy. They're building klal on a shaky foundation. They need very badly to put some reality into their dreaming. And so do the members of our cojmmunity.
My elderly father is living with us but requires an aide 24/7. There is no money left of his to care for him. The cost is mine. And I'm hitting 65 next year. I've got 2 married grandchildren already both pregnant. Thank God that we have grown as a family, but please stop looking at me as if I'm a cow that gives milk twice a day.
You bet I worry about how my kids and grandkids and great grandkids are going to make it financially. But right about now I'm more worried about how my wife and I are going to make it. Call it selfish, but I need to worry more about myself right now and everyone else will have to take care of themselves.
What it boils down to is that the frum community can't have it all, and certainly not at the levels existing now. We can't have elaborate simchas of all types, we can't have summer camps and years in Israel, we can't have yeshiva education the way it is funded and arranged right now. We can't have McMansions in expensive areas. We can't eat in restaurants as a matter of accepted habit. We can't buy clothing and wigs that cost 1/2 month's rent or a months rent. And we can't have these things because we can't pay for them on the money available if we only look for parents to be paying for everything.
And as the posting points out we can't count on unlimited funding from the grandparents any more. Not only will they not be able to help out their kids and grandchildren, but they are going to require services that we don't have in place yet and which are going to cost real money to establish.
Only a major reorganization of our frum society is goihng to help us meet our financial obligations. We can't blame this all on the problems in the economy today. This has been many years in the making.
Sure we need to reorganize the way we approach things. And it isn't going to happen. Why? First, shul rabbanim will never take on the yeshivas and tell them that enough is enough--change what you are doing.
And the rosh yeshivas and principals do a really great job of talking up kibud av v'aim but they translate that a whole lot differently then the rest of us do. It doesn't apply when they want their exorbitant tuitions--then you're supposed to take from your parents and take and take. never mind if they really can't afford to give it to you.
And they don't want to hear about people getting older. They tell you that retirement is not a frum idea and frum people don't retire. They see no problem in sending people in their 60s and 70s to work full time, whether they can do it or not, as long as their tuitions are paid.
They don't want to hear that we need services for the older members of our community. Their answer is that parents should move in with their children, which will free up all kinds of money. They either are really ignorant about what is going to be needed or they are pretending they don't know. Doesn't matter which, because they want theirs before anyone else can get theirs.
I don't get it. Why should it cost more after you are older? There is social security that you collect. And there are other government programs for older people like medicare and medicaid. They get their drugs and medical care paid for. They could qualify for food stamps if they have to. Their houses should be all paid up for by the time they get to that age.
Lots of my friends have parents almost in the 60s or there already. They take care of themselves and their health is just fine. Isn't that just a scare tactic to say that all older people are going to have health problems? Most don't.
Any solution for tuition that is not internally viable is doomed to failure.
Just so you know, at least in terms of grandparents and schools, it is not only the frum community. My aunts and uncles are not frum, and they all send their children to non-Jewish private schools. My grandparents recently mentioned that at the various schools that my cousins attend, there have been "bring your grandparents to school days", which had seemed like an innocuous invitation till they got there and were bombarded with the shameless marketing ploy of "look how wonderful this place is for your grandchildren, now please open your checkbooks generously so we can make it even better".
Seems like most of America is operating on this boomer bail-out strategy, and it's gonna get ugly for everyone...
Rochel--while government programs can help somewhat you can't live on what they give you unless you have savings income coming in and some insurance plans in addition. They don't pay for all your medical expenses and medications, only some of it and not always the larger part of those expenses. They may pay for an aide for 4 hours a day in your home, but what about the other 20 hours? They limit the number of days they pay for in a nursing facility. If you need really long term facility care or permanent living in a care facility, you are going to be paying for that out of your own pocket, and every little thing is extra. Those facilities are not in business as a charity--they are looking to make a profit.
Forget social security as the backbone of paying for regular expenses. Even if you qualify for the highest social security payments because of your pre-retirement earnings just how much do you think you are going to get? And if your spouse's earnings were lots less then yours so that they take half yours instead of what they earned on their own, how much is that? Somewhere about $36-40K total IF social security can still afford to pay out when you need it. That's if you take it at 65. If you wait to 68 or 70 you get more, but then you need money to live on until then.
My parents' supplemental health insurance runs them $1000 a month. They also have a senior care policy that runs them another $7000 a year. The government is not the full answer to how to live when you are older.
No one has mentioned it so I will. Why the extra cost when you get older? None of our kids live in the same place--one in Israel, one in the midwest, one in NY and one in Canada. We are in Jersey right now but will be heading to Florida permanently. Do you have any idea of what the costs are if you want to see your kids and grandkids even just once during the year? The kids would love it if we would fly them in with their families so they could see old friends and visit with us where we are paying all the bills. Sorry but no can do. Have you priced what it costs to fly in a family of 7 from Israel? It's enough what we pay for the two of us to fly and see the kids. When one of the kids made a bar mitzvah a few years ago they wanted us to pay to bring in all their siblings and nieces and nephews for the simcha, something they could not afford to do. Yes it hurt but we had to tell them that we couldn't afford it either.
Sometimes people would like to make us out as the bad guys, but we're not. We are just plain not made out of money.
In addition to Malky's comments, a big issue in NJ for seniors is property taxes. Even if your house is paid for, you have a big problem if you can't pay your astronomical taxes.
Oh are you right tesyaa. It's one reason why we're moving down to Florida. The taxes in Jersey are a killer if you don't have a job income coming in and are living only on interest income and ss benefits.Cost of living is going to be way cheaper in Florida and we will still be able to do some of the things we want to do instead of giving our 'fun' money to the government.
Helen: Welcome to the sandwich generation - although usually it means being sandwiched between children who are not yet adults and parents who need care. You are sandwiched between grown parents and grown children.
For me, the choice between helping elderly ill parents who don't have the option of getting a job, changing their lifestyle, cutting back on expenses (i.e. food, rent, prescriptions)etc. and helping grown children who need to figure out how to live on what they earn is a no brainer. Absent emergencies, adult children should not be asking parents for help at the expense of their grandparents.
ProfK: Excellent post. However, even if there were no tuition problem and families were not relying on grandparents, there still would be a looming issue of caring for our elderly in dignified ways that maximize quality of life and independence. Maybe you know a lot of boomers with pensions or savings, but I know a lot who will be living only on social security through no fault of their own. And, the following generation of retirees will be even worse off due to so many fewer people having pensions.
A horrible world where you have to choose between your parents or your kids because you just can't help both.[space]
You might also say it's a wonderful world where your kids can have grandparents alive. My kids are even luckier, they have 4 grandparents, and they have one great-grandmother alive. She has no assets at all, and we've ("we" meaning various family members including me) helped her over the years, including buying her a modest apartment in Florida for the winters.
Mark [tail end of the boomers]
This is an excellent post. But amazingly, the situation is even worse than you say. You emphasize medical costs, but longer-living populations alone is enough to deplete the wealth. Unless you're very wealthy and have enough stored away for retirement that you can live on less than the passive income the investments earn, your savings will shrink every year past retirement that you live. A person who retires at 65 and dies at 85 may have very little left even if there are zero medical outlays! Think about it: 20 years of living is easily a million dollars on the low end (50k a year), and that doesn't count any "contributions" the retirees are expected to make to their children's finances.
Many frum retirees will outlive their money due to not having saved enough for their long (and expensive) lives. Because of this and the reasons given in the post, the inheritances coming to the current working generation is bound to be tiny overall. This is a financial tsunami heading our way. The generational capital of the frum world is running dry, something we've never experienced before. I suspect this is going to act in concert with other social issues to hugely change the face of Orthodox Judaism in America. A generation that never had to make any sacrifices to be frum is going to be shocked when there are hard choices to be made, and the next generation is going to be shaped those choices.
The discussion here points out something I've complained about before: there is no central leadership for Klal, nothing even close. If there were then presumably they would have looked at what was going on and made adjustments along the way. Also presumably they would have changed some of the lifestyle choices that are eating away at the money available.
But we don't have that central leadership, so now what? What you are saying is true Prof, the boomers won't be bankrolling Klal any more and coming up fairly soon. They are going to need to collect the "interest" on the money they pumped into the system in the millions. I have yet to see an ad for a conference on the problems of the aging and what needs to be put into place.
I guess it is being left to each of us individually to prepare ourselves for later on. And lots of people are going to be very unhappy when the first preparation will be learning how to say no to requests for money, whether from children or from organizations.
Not that I read every blog out there but I have never seen this topic raised on any other blog. Truth is I've never seen it raised by any organization in public either. And it should be.
We live in an area with a large home for the aged under frum auspices. It's over-subscribed with a waiting list, and mostly we are still talking about the Holocaust survivors in there with only a few who are boomers. Frum rehab facilities? Only a very few and pretty much centralized in Brooklyn, and a long travel from here.
And then there is the money. Those retirement formulas don't count in being frum and needing to live in retirement where there is a shul and kosher shopping and kosher services available. If you talk NY or NJ then you are talking mega taxes as was mentioned above. You need more money to retire in this area.
It's going to be a financial mess for everyone who is frum unless someone finally gets the guts to say we have to change the whole system and do it now.
The Frum may have some advantages in their senior years. Larger families mean more people to help care for elderly parents and grandparents, and better social networks and support systems, even if that just means more people who will check on an elderly neighbor, give them a ride to a doctor's appointment or pick up groceries. So, it's not all doom and gloom.
You are both right and wrong Anonymous. In theory having more kids means having a larger support network. That is, if the kids are not all working, or if they all live in the neighborhood where their parents live. That's not a given.
The opportunity already exists with the seniors we already have to check in on a neighbor, to offer a ride, to buy groceries for them. How many people do this? Unless a local organization organizes this formally so that people know who needs help and what kind, most people don't adopt strangers or even known neighbors on a regular basis.
Someone at dinner yesterday commented that the frum community has outgrown its money. Not a bad way to describe things. The only way the community will be able to afford the things it needs, and thinking about and helping out the seniors is one of those things, is if they make some real and radical changes in practices of the community. You can't have it all unless you can pay for it--something we need to learn really fast.
Pam: Usually when a community grows, that means more money, not less. Is there less per capita than before on an inflation adjusted basis? Is it that newer generations aren't earning enough because they aren't getting the right training/education or aren't as entrepreneurial? Is it because it costs more now to be frum? Have tuitions outpaced inflation? Have expectations and lifestyles (whether summer camp, size of homes, cars, lavish/large simchas) outpaced inflation?
The answer to all of your questions Anonymous is yes.
"the frum community has outgrown its money" .
This is going to be a disaster.
You know all that triumphalism about Orthodoxy inevitably taking over? Don't count on it.
Thanks for making my day Pam. That line of yours says it all--we've outgrown our money. Unless lots more of the frum community is told to get an education and preparation and then go out to work we're going to implode.
All the advice from the Rabbis discussing our money problems in public seems to be go find other sources of income to support our structures. Well, that other source of income should also include that everyone should be out working.
KS: So who was responsible for these changes/attitudes? The boomers. Can they recognize their (well intentioned) mistakes and try to help the next generations not to make the same mistakes. Can you imagine a 60 something old sitting down with their 30 or 40 something year old suggesting that the grandchildren not be indulged so much, get a college degree and a job (and work part-time during college) before marrying. Even more important, is the boomers letting the children/grandchildren know in advance that they should not count on them for funding the grandchildren's tuitions, weddings, etc. and explain the family finances. Maybe there could be choices - if you want us to pay for that dream wedding, that's fine, but that means we won't be abe to help with tuition or a down payment -- it's your choice.
Anonymous,
Yes, the boomers certainly created part of the problem by indulging their kids. They also indulged the yeshivas and other organizations, if that's the right word. They gave and gave and never said show me the books. They never asked if their money was being spent wisely. They built without asking how much is enough.
But let's also place some blame where else it belongs. Those boomers valued secular education and hard work. They weren't sitting on pots of inherited money. And what did the yeshivas do as a thank you for all the money the boomers poured in? They inculcated their students with the idea that working is not necessary, that working is somehow to be ashamed of. They made it clear that studying after high school should only mean yeshiva or seminary. They poured out the story that you won't get a good shidduch if you haven't done that extra learning.
We are now in a situation where it is the parents versus the yeshivas, and the yeshivas are still winning. More and more of the boomer's kids have moved towards the right religiously, leaving their parents values with their parents.
I hate to bring up the sad parts of growing older but they play a part in the finances too. The fact is that most older people can expect to be widowed at some point. It's rare for a couple to both be in their 80s. When that happens there is a money loss.
Only one social security payment will be coming in. Many pensions are set up so that they pay out only to the person who earned the pension and the pension stops upon the death of that person. It is the case that the men of the boomers earned higher salaries then the women. Their social security payments are the higher ones. Now add that women live longer then men.
Happened in our family. While my uncle was living he and my aunt did okay. He died first and with him gone his pension stopped and my aunt had only her social security at half of what her husband's was. My cousins are all pitching in money for their mother but it comes at a cost to them. The money they give her they can't save for their own older years.
To add to what Eli writes about pensions, some corporate pensions only pay out until a certain age. Seems by fil might outlive his pension baruch Hashem. And then what? Well, the financially oriented kids in our family (that would be us) will be have to start that conversation so that we can get prepared to make this work. I don't believe savings + social security + medicare will be enough to cover property taxes, daily living expenses, and prescriptions, to say nothing of the possibilities of in-home care (I do work for someone who provides in home care at the price tag of over $50K per year) or just spending money to enoy.
Yerusha?. . . it would be silly to count on that.
Its hard, but when you tell your grandchildren's yeshiva to send your grandchildren to public school but you ARE NOT PAYING ANOTHER WOODEN NICKEL, they will not call your bluff.
I also find older people have a hard time hanging up on solicitors by phone. One "I don't pledge over the phone, send me an envelope" is enough, after that just hang up.
Gavra: Isn't the whole point of ProfK's articles is that eventually the yeshiva will have no choice other than to say "sorry, but we have no funds to take on more non-paying kids or to give more financial aid." How longs are teachers going to work without getting paid?
It's hard to imagine any big change in the system until schools start losing (paying) students in big numbers.
Ana 5:11: At that point (after your child/grandchild actually spends a day in public school), if you believe in the system then send them tuition. It will break (my strong belief) before that point. By giving them money, you are prolonging the problem.
Prof K: Here is a radical idea. How about parents tell their kids no, we are not going to pay for [lavish wedding, summer camps, whatever] but we will take the money and use it to buy long-term care insurance and life insurance to help insure that you have an inheritance [or give the kids a choice as to what they would prefer]. Alternatively, grown children with parents still healthy enough to get LTC and life insurance could get together with their siblings to buy such insurance for their parents (yes, that might mean some short-term sacrifice). I sure wish I had known about such options when my parents were young and healthy.
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