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• Workers Confident about Retirement…But Not Prepared

  2:41 pm on March 11, 2010 Permalink | Reply
  

  

   Good news–we’re feeling much more confident about our retirement prospects.

   Bad news–  workers are not doing any better –in fact worse– at being financially prepared for retirement. 

   More than half of workers surveyed reported savings and investments of less than $25,000, according to the new Retirement Confidence Survey from the Employee Benefit Research Institute.

  And, I’ll bet a lot of them say — not to worry – I still have time.  Or, I’ll just work longer.

  But then the unexpected happens.

  So, we see a big gap between expectation and reality about the age at which we’ll retire. 

   9% of workers say they plan to retire before age 60, yet 31% of retirees report they retired that early.  In 2010, EBRI found that 41% left the work force earlier than planned.  Why? health problems or disability(54%), changes at their company (26%) such as downsizing or closure, or taking care of a spouse or other family member (19%).  Just 5% cited a positive reason for leaving early.

  What are workers worried about in retirement:

    * 51% are worried about medical expenses,

    * 61% are worried about long-term care expenses and

    * 35% are not confident they are doing a good job of preparing for retirement.

  If you are confident and prepared -give yourself a pat on the back and keep at it. It hasn’t been easy, especially this past 18 months.

  If you aren’t prepared, remember that you don’t always get to pick the time when you stop working. sometime it picks you.  While you are still working is the right time to create a long-term care plan and decide if long-term care insurance is the right way to help shoulder some of your potential long-term care costs.  Take the time now to understand how Medicare works and what it covers and does not cover, and what it costs or what your retiree health benefits will cost. 

  It’s important information in figuring out your expenses in retirement.  Less than half of workers say they have tried to calculate how much money they will need in retirement. 

  So if you’re feeling better about the prospects of retirement, take the next step and start planning today for your income, medical and long-term care needs in retirement.

   

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• Why Create an Electronic Family Health History?

  10:17 am on March 9, 2010 Permalink | Reply
  

  One of the things we accumulate as we age is a health history. 

  It’s probably still in bulky paper files in our doctor’s office. And  in our own files at home. Not easy to access or navigate. 

  Each of our family members and extended family members probably has the same.  And our ability to share health history is limited.  Often what we “know”  about Aunt Betty’s or Grampa’s health may not be especially accurate.  Yet, that family health history may hold some very important information for our health care practitioner.

  Have you ever found yourself at a loss when your doctor asks about health conditions of family members – such as sibling who you don’t see often? Or stuggled to find an aging relative’s health data for a new doctor or be able to share it with family members who may help with care. 

  And, when considering some types of insurance, such as health insurance and  long-term care insurance, knowing health history of family members can make for a more informed choice about risk and how much insurance coverage to purchase. 

  Now it’s easy to create a family health history online with a tool from the U.S. Surgeon General.  You can gather data from your immediate as well as extended family. 

  The Surgeon General’s “My Family Health Portrait” is an internet-based tool.  The tool is easy to access on the web and simple to fill out. It assembles your information and makes a “pedigree” family tree that you can download. It is private–it does not keep your information. It gives you a health history that you can share with family members or send to your health care practitioner.

  It should only take about 15 to 20 minutes to build a basic family health history. Individuals with larger families will spend more time entering in their information. Then you have the option of sharing it with other family members, if you wish. They may help provide information you didn’t know. And relatives can start with your information and create their own history. You will also probably want to provide your health history to your health care practitioner. You and your health care practitioner should review it together before making it part of your medical record.

  The technology used is Microsoft’s Health Vault.  The tool does not keep a government record of the information.  You should carefully review the privacy statement before you use the tool.

  While the coming of electronic health records will improve our ability to access health records, this kind of tool helps us pull together a family health portrait that can be of use today and to future generations. I know in my family a lot of health information that gets passed down is sketchy at best; inaccurate at worst.  And as I accompany aging family members to their doctor’s appointments, it’s comforting to know that I have information in one, easy to access place.

  Your family history includes health information about you and your close relatives. Family history is an important risk factor for problems like heart disease, stroke, diabetes and cancer. A risk factor is anything that increases your chance of getting a disease. The reason a family history can help predict risk is that families share their genes, as well as other factors that affect health, like environment, lifestyles and habits.

  Having a family member with a disease raises your risk, but it does not mean that you will definitely get it. Realizing that you are at risk gives you a chance to reduce that risk by following a healthier lifestyle and getting tested as needed.

  So rather than carry my file of papers with notes written in the margins the next time my doctor refers me to a specialist, I’m looking forward to bringing in a print out that captures not only my health history, but my family’s health history, too.  I just need to figure out how to nudge some of the less tech savvy family members into sharing their health information, too.

  Resources:

  My Family Health Portrait  – we based tool to gather family health history

  Compiling Your Medical Health History – Mayo Clinic article

   
• Getting a Grip on Retirement Health Care Risk

  9:10 am on March 3, 2010 Permalink | Reply
  

  

  Longevity Alliance Retirement Risk

   The closer you get to retirement, the more you see how big a bite healthcare cost can take out of your retirement savings.  So how do you plan and what are the biggest risks in figuring out your healthcare costs from age 65?

   A new research report from the Center for Retirement Research at Boston College tackled these questions and came up with some recommendations. 

  First, let’s take a look at what you can know and plan for in retiree health care:  Medicare Part B, Medicare supplement and Medicare Part D, Medicare Advantage or retiree health insurance premiums; co-payments for what insurance does not cover; and services that are not covered such as dental, eye glasses, hearing aids.

  So where is the risk?  Co-payments for Medicare-covered services and payments for non-covered services, including long-term care costs.   Long-term care costs are the BIG potential risk.

  So here are the facts on long-term care.

  * It’s generally not covered by Medicare ( a maximum of 100 days)

  * About one-third of people turning 65 in 2010 will need at least 3 months in a nursing home

  * 24% of those people will need more than a year of long-term care

  * 9%  will need more than five years of long-term care 

   Of course what you can’t know is which one will you be.  And there’s the risk. 

  The research took data and applied various chronic diseases to the impact of health care spending after age 65.  Here’s what they found: 

  At age 65, a typical married couple free of chronic diseases can expect to spend $197,000 on remaining lifetime health care costs.  There’s a 5% chance that number could exceed $311,000.  Those costs do not include long-term care.

  Include long-term care costs in the calculations, the typical costs increases to $260,000 with a 5% chance that the costs will be more than $570,000.  Most of us don’t have that kind of money set aside for health care costs in retirement. 

  So what do you do?   Here are three questions the report recommends you ask yourself as you ready for retirement: 

  1. What risk are you prepared to accept of having your assets substantially depleted by health care costs? 

  2  Given your current health and family history, are you above or below the average risk of incurring exceptionally high healthcare costs? 

  3. Should you insurance against health care costs by purchasing long-term care insurance? 

  If you take the step to look at long-term care insurance, Longevity Alliance recommends that you consider whether you want insurance to cover potentially all your long-term care costs or whether you are willing to share –paying some of the costs yourself and having an insurance policy that will pay a portion.  That strategy can lead to more affordable long-term care insurance rates.

  Resources:

  What is the distribution of lifetime health care costs from age 65? Center for REtriement Research at Boston College

  Longevity Alliance – Insurance products and solutions to make a longer life better

  Long-term Care Quote — online quotes for long-term care insurance

   
• Health Benefits of Exercise at Any Age

  8:44 am on March 2, 2010 Permalink | Reply
  

   After two weeks of watching the Olympics, are you ready to pick up the pace of your exercise program?  Or start a program to improve your overall health?

  There is new evidence that you don’t need to train at an Olympian’s pace – just by adding walking to your daily routine or light weight lifting, you can increase longevity and improve your body and mind. 

  A recent New York Times article highlights some of the recent research that starting an exercise routine at any age can help fight cancer, osteoporosis, heart disease, diabetes and dementia. It’s worth a read if you’ve been putting off physical activity because of your age.  “Physical inactivity is one of the strongest predictors of unsuccessful aging for older adults and is perhaps the root cause of many unnecessary and premature admission to long-term care,” according to two geriatricians in a recent article in the Archives of Internal medicine. 

  One of the new studies points to positive impact on preventing or delaying loss of cognitive functions.  Here’s an interesting program on the aging brain – what it does best and not so well – from NPR. 

  And, there are financial rewards for being healthier, as well.  You may also benefit from lower health care expenses and less need to hire people to assist you in doing everyday activities. 

  If you don’t know where to get started, try your local senior center.  They frequently have low impact exercise programs that can be a great place to start.  And always, check with your doctor before you start a new exercise regimen, especially if you have been inactive.

  So if you missed your “get excercising” New Year’s Resolution, it’s not too late to get started. Or you got off course becuase of the winter snow and cold, get started now.  The health benefits, no matter what your age, of just a bit of routine physical activity should be enough to get you moving.

   
• Medicare Advantage Rates Continue to Climb

  9:27 am on February 24, 2010 Permalink | Reply
  

  No matter where you turn it seems health insurance rates are going up.  

  Medicare Advantage plans are no exception. Enrollees in Medicare Advantage Prescription Drug Plans will pay an average of $39.61 per month in 2010, an increase of 14.2% from 2009.   

  Even harder hit are people who remained in the same plan between 2009 and 2010.  They saw their premiums increase an average of 22%.  The data analysis comes from Avalere Health, a healthcare consulting company. 

  If you have a Medicare Advantage plan you still may be able to switch to another Medicare Advantage Plan (as long as they both have drug coverage).  The Medicare open enrollment period runs through March 31.  

  So if you saw a big increase in your premiums and didn’t shop around, you may still be able to switch plans if there is one that is more affordable and meets your health care needs, including physicians. Remember, Medicare Advantage plans usually require you to use a network of doctors and hospitals. 

  Experts say the premium increases are a result of cuts of 3 to 5 percent that the plans took in payment from the government.  While it appears those cuts may not be as high for the 2011 plans, Medicare Advantage rates, like most health insurance rates, are expected to continue to rise. 

  If you decide to shop and compare Medicare Advantage plans remember to look beyond the premium, recommends Longevity Alliance.  Look at the amount of any co-payments you would pay at the time of any services.  Also look at the extra benefits and see if they are of value to you.  If not, another plan may be a better value and match for your needs. But it is to your advantage to get insurance quotes from at least two different insurance companies and compare rates and benefits. 

  Medicare Advantage plans have special sign up periods.  After this open enrollment period, which ends March 31, the next enrollment period is Nov. 15 – Dec. 31 to sign up for 2011 plans.  You can find out more about Medicare Advantage plans and other type of Medicare plans at http://www.Medicare.gov.

   
• Managing Your Credit and the New Credit Card Rules

  8:23 am on February 23, 2010 Permalink | Reply
  

  If you have a credit card, you’ve received a notice outlining changes in some features of rules for using your credit card.  And, for the most part, it’s good news.

   So open the email or envelope and read your new credit card agreement. (It’s not so bad as the companies have tried to use more consumer friendly language).

   We’ve highlighted some of the changes below as well as provided links to sites you might find helpful. 

  Whether you are working or retired, knowing the rules can help you manage your money better.

  And, even with the changes, there are three basic rules that still apply to wise use of credit cards:  

  1.  Pay on time.  Whether you pay in full (preferable) or you pay the balance over time, a late payment or two gives the credit card company the opportunity to change the rules to its favor, not yours.  Miss two payments – 60 days late paying the minimum – and the rate goes up. Know the rules of payment for your card and put reminders wherever you need to –sticky notes, Outlook reminders, mobile phone reminders – paying on time saves you money. 

  2. Pay more than the minimum – pay in full, if you can.  Get into the habit of paying your credit card in full each month.  New disclosures on your statement show you how long it takes to pay off your credit card balance if you are just paying the minimum – and how much it ultimately costs you.  It’s good perspective next time you think about charging a deal that’s too good to pass up.  The reality is that with interest charges the “great deal” turns into “more than full price.” 

  3. Nearing retirement – keep debt to a minimum.  As you approach retirement, keeping debt to a minimum gives your finances (and you) more “room to breathe” each month. Using the credit card for convenience and paying it off each month – or for emergencies with a payback plan in mind – helps you keep you debt in line with your retirement income. 

  Here are highlights of the new credit card rules that go into effect Feb. 22: 

  * Raising rates on existing balances is now prohibited, unless you don’t pay on time.  That doesn’t help you if you are already paying a high rate of interest.  But going forward, you’ll know the rules and can make accurate calculations about what it will cost to pay off your debt. 

  * Credit cards can’t charge a fee for over-limit charges unless you tell them it is okay to do so (opt-in).  Previously, people were hit with over-limit fees that could amount to hundreds of dollars as they used the card unknowingly exceeding their credit limit.  If you don’t let the card company charge the fee, remember the charge will be declined.  A good reason to be well below your credit limit in the first place. 

  * Your payment (anything above the minimum) gets paid against the highest interest rate balances first. Before, the banks would generally apply it to the lower rate balances.  So this does automatically what you always want to do – pay off your highest rate balances first. 

  * You’ll find some new terms and disclosures on your statement.  If you carry a balance, you’ll now know how long –and how much you’ll pay – to pay off that balance if you only pay the minimum.  In the example provided by the Federal Reserve Board if you have a $3,000 balance, a 14.4% interest rate and pay the $90 minimum amount due it will take you 11 years to pay off the debt and it will cost you $4745.  Pay $103 per month and it takes 3 years to pay off at a total of $3712. 

  * There will be fewer credit card offers on college campuses as the new rules require proof of income to issue a card to anyone under 21 years old.  If you want your college student to have a card, it means you’ll need to co-sign.  So make sure you both agree on the rules for use of the card, since card use now becomes part of your credit history. 

  Resources: 

  Here’s a helpful summary of the new rules for credit card companies from the Federal Reserve Board   

  5 Tips for the New Credit Card Era from CNBC    

  Credit card reform and your wallet – The Washington Post  

  What to Expect from the New Credit Card Rulesfrom SmartMoney

   
• Spending Less to Save More. Will it last?

  10:42 am on February 17, 2010 Permalink | Reply
  

  Do you ever feel like you just can’t think of one more way to cut back on spending?  You know even small savings can add up over time, but where do you look now? 

  New research from Harris Interactive gives you some idea of what others of your age – and other generations – are doing to make their money last longer. 

  Here’s where baby boomers and seniors are making changes in spending:

   * Purchasing more generic brands

   * Going to the hairdresser less

   * Cancelling one or more magazine subscriptions

   * Cutting down on dry cleaning

   * Brown bagging rather than purchasing lunch

  The “great recession” has made some things we once thought we couldn’t live without dispensable. The one thing none of the generations seem to be willing to cut back on is cell phone service.

  The researchers say these may seem like small savings, but they are the things many financial planners say people need to do more of to save money. And, it seems in these times of greater economic hardship, Americans are finally heeding that advice.

  The big question is whether these cuts are temporary or will they become lifestyle changes?  What do you think?

   

  SPENDING/SAVINGS OVER PAST SIX MONTHS – BY GENERATION“Have you done or considered doing any of the following over the past six months in order to save money?”Percent saying “Have done”
  Base: All adults
  		Total		Generation
  				Echo Boomers (18-33)		Gen. X (34-45)		Baby Boomers (46-64)		Matures (65+)
  		%		%		%		%		%
  Purchasing more generic brands		63		60		66		63		61
  Brown bagging lunch instead of purchasing it		45		51		56		46		20
  Going to the hairdresser/barber/stylist less often		39		39		43		38		35
  Switched to refillable water bottle instead of purchasing bottle of water		34		40		37		31		28
  Cancelled one or more magazine subscriptions		33		24		31		36		45
  Cut down on dry cleaning		22		18		24		21		27
  Cancelled or cut back cable television service		22		24		26		22		14
  Stopped purchasing coffee in the morning		21		25		27		19		14
  Cancelled a newspaper subscription		19		16		20		20		20
  Changed or cancelled cell phone service		17		19		20		17		11
  Cancelled landline phone service and only using cell phone		15		20		16		15		6
  Begun carpooling or using mass transit		14		26		16		7		4
  Note: Percentages may not add to 100% due to rounding

  Results of The Harris Poll of 2,576 adults surveyed online between January 18 and 25, 2010 by Harris Interactive

   
• Social Security Help for Those with Early-Onset Alzheimer’s

  9:22 am on February 15, 2010 Permalink | Reply
  

  The Social Security Administration expanded its list of diseases that qualify for expedited processing including early-onset Alzheimer’s.  The addition of 38 new conditions means that “tens of thousands of Americans with devastating disabilities will now get approved for benefits in a matter of days rather than months and years,” according to Commissioner of Social Security Michael J. Astrue.

  Among those who will be eligible for speedy action on their applications – known as Compassionate Allowance– are people diagnosed with early-onset Alzheimer’s and mixed dementia. About 200,000 people in the U.S. are thought to have early-onset Alzheimer’s, according to the Alzheimer’s Association. 

  Compassionate allowance is a way of quickly identifying diseases and other medical conditions that clearly qualify for Social Security and Supplemental Security Income disability benefits.  It allows the agency to electronically target and make speedy decisions for the most obviously disabled individuals. 

  “The diagnosis of Alzheimer’s indicates significant cognitive impairment that interferes with daily living activities, including the ability to work,” said Harry Johns, President and CEO of the Alzheimer’s Association.  “Now, individuals who are dealing with the enormous challenges of Alzheimer’s won’t also have to endure the financial and emotional toll of a long disability decision process.” 

  It is estimated that about five million* Americans suffer from Alzheimer’s disease, and about 360,000 people are newly diagnosed every year. Alzheimer’s affects about 10 percent of people ages 65 and up, and the prevalence doubles roughly every 10 years after age 65. Half of the population ages 85 and up may have Alzheimer’s. 

  The new Social Security process begins March 1. Here is a checklist from the Alzheimer’s Association on how to apply for Social Security disability and Supplemental Security Income Benefits for early-onset Alzheimer’s. 

  Go to this Social Security website for more information on Compassionate Allowances and a list of the 38 new diseases eligible for the program.  The Alzheimer’s Association has information here that is a bit easier to understand.  

  A reminder, too, for those with long-term care insurance with a diagnosis that impacts two or more activities of daily living — contact your long-term care insurance company as soon as  possible after the diagnosis.  This will provide you with clear information about your policy coverage and help you plan for future care.  If you are qualified, it may also trigger the creation of a care plan and beginning of the count on elimination days (your deductible). 

  If you have a history of Alzheimer’s in your family, you might want to consider purchasing a long-term care insurance in your 40s or 50s to cover some of the potential costs of care – whether at home or in a long-term care facility.compassion

   
• Encore Career Purpose Prize

  1:54 pm on February 10, 2010 Permalink | Reply
  

  Do you know someone over the age of 60 who is engaged in an encore career?  Encore careers combine personal meaning and social impact with continued work in the second half of life.

  Ann Higdon isn’t your average baby boomer.  Inspired by her own difficult childhood, she’s now running a nonprofit that helps disadvantaged teens in Dayton, Ohio, turn their lives around. She’s also one of 10 people to win the 2009 Purpose Prize for changing lives – starting with her own.

  The 2010 Purpose Prize is accepting nominations, including self-nominations, at Encore Careers by March 5, 2010.

  The eligibility criteria:

  • Be at least 60 years old (by the deadline of March 5, 2010).
  • Be a legal resident of the U.S. (including U.S. territories).
  • Be someone who has initiated important innovations (in a new or ongoing organization) in an encore career.
  • Be currently working in a leadership capacity in an organization or institution (public, private, nonprofit, or for-profit) to address a major social problem in the United States or abroad.
  • Have initiated important innovations (in a new or ongoing organization), and have demonstrated recent creativity and leadership with the promise of more to come.

  Ann’s organization, Improved Solutions for Urban Systems (ISUS), helps high school dropouts get their degrees and build careers.  Her students not only get a high school education, they also learn job skills in health care, computer operation and construction. Many students take their training and use it to improve their community, such as building homes in run-down neighborhoods.

  The Purpose Prize is looking for 10 people over age 60 to win up to $100,000 each to support their work solving some of our most pressing social issues – from health care to the environment, poverty to education.

   Find out more about criteria and eligibility at Encore Careers.

   
• Baby Boomers, Social Security and Retirement Income

  10:00 am on February 9, 2010 Permalink | Reply
  

  There is a rash of recent articles about the financial state of the Social Security system and the impending retirement of baby boomer.  While there are numerous immediate financial concerns for retirees, the impending doom of the Social Security system is not one of them. 

  Here’s an article from USA Today warning of impending doom. Here’s an article from CNBC that lays out many of the issues facing Social Security.  It’s worth a read to provide some perspective.

  Social Security expert Nancy Altman reminded a group of aging experts yesterday that the 2009 Social Security Trustees reports says Social Security will have sufficient income to pay benefits in full until 2037, and at a 78% level after that.  Obviously, Congress will have to step in before that to put a plan in place for Social Security.  She’s chair of the board of directors of the Pension Rights Center.

  What is alarming though are the statistics of how many people rely so heavily on Social Security to cover their expenses once they retire.  Altman says 2 in 3 retirees get half or more of their income from Social Security and 1 in 5 retirees get all their income from Social Security.

  So, if you are still planning your retirement, and considering how long you will continue working and the sources of income you will have to draw on in retirement to pay your expenses. here are two things to think about in deciding when to begin Social Security payments:

  1.  Rather than thinking of Social Security eligibility as a single age, think of it as bands of retirement ages.  The longer you wait to begin Social Security payments, the more money you will receive on a monthly basis. You can begin at 62 and take a reduced benefit or you can wait until your full retirement age (linked to when you were born) to receive full benefits or wait until say 70 and receive an even higher monthly payment.  

  Here’s how it works. If your full retirement age is 67, the reduction for starting your benefits at

  • 62 is about 30 percent;
  • age 63 is about 25 percent;
  • age 64 is about 20 percent;
  • age 65 is about 13 and 1/3 percent; and
  • age 66 is about 6 and 2/3 percent.  

  Because so many of us rely so heavily on those payments in our retirement years, this is a really important decision in determining how much money you receive monthly to cover your expenses in retirement.  Here’s a link to the Social Security Retirement Estimator.   

  2. The age at which Medicare begins and Social Security begins are no longer linked.  Medicare is age based – 65 (unless you are disabled) and based upon having worked 40 quarters (10 years of payroll tax payments). Social Security is generally 66 or 67, depending on the year you were born.

  If you are not already getting benefits when you turn 65, you should call 1-800-772-1213 three months prior to your birthday so they can help you decide if you should sign up for Medicare. You should do this even if you plan to continue working or do not think you have enough work credit under Social Security, because Medicare enrollment period rules are very strict.

   If you would like to file for Medicare only, you can apply by calling 1-800-772-1213.

  Making the right decision about when to begin receiving Social Security and signing up correctly for Medicare can make a big financial difference in your retirement income.

  For example, if you do not enroll in Medicare Part B when you are first eligible (and not covered by an employer health plan) you’ll have to wait until the next General Enrollment Period, which is January 1 through March 31 of each year. You may then have to pay a higher Medicare Part B premium because you could have had Medicare Part B and did not take it.

  So as you plan your retirement, make sure you know the rules around Social Security and Medicare.

  Resources

   Social Security Administration Website         

    National Academy of Social Insurance – When to Take Social Secuity 

  Longevity Alliance – Managing Risk in Retirement