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• Why Your Children Shouldn’t Be Your Long-term Care Plan

  2:00 pm on February 3, 2010 Permalink | Reply
  

  Here are three frequent responses when the issue of long-term care planning comes up:

   1. It won’t happen to me (Get me that crystal ball and I’ll use it to pick stocks too!)

   2. I don’t want to think about it (Who does? But statistically it probably will happen)

   3. My children will take care of me. (Do they know?)

  So, here comes some new information that may alter your thinking about excuse #3:

  Employees in the U.S. who are caring for an older relative are more likely to report health problems like depression, diabetes, hypertension or heart disease.

  That costs employers an estimated $13.4 billion per year, according to a MetLife Study of Working Caregivers and Employer Health Care Costs.  And some of those health care costs are borne directly by the employee, as well.

  So, to put it bluntly, taking care of you may cost your children their good health.

  Here are some additional findings:

  * Employees providing eldercare were more likely to report fair or poor health in general.

   *Younger caregivers (18-39 years old) demonstrated significantly higher rates of cholesterol, hypertension, COPD, depression, kidney disease, and heart disease compared to non-caregivers of the same age.

  * Caregivers tend to skip their own preventive health screenings such as mammograms.

  * Caregivers are more likely to miss days of work and are often forced to switch from full-time to part-time to care for their elder reducing their income and losing health care coverage.

   * Eldercare may be closely associated with high-risk behaviors like smoking and alcohol consumption.

  While eldercare is usually considered an older worker (50+) issue, this survey shows the heaviest health toll is taken by those ages 18-39.  This report doesn’t go into the financial toll it can take as well on the caregiver who often delays their own retirement saving while they care for their elder.

  The report calls on employers for better coordination of wellness and eldercare programs, more work time flexibility and stress reduction seminars, among other benefits.  “They need solutions so they can be healthier and perform better,” said Gail Hunt of the National Alliance for Caregivers.

  But, this report is also a wake-up call to anyone thinking that having their adult children care for them as they age is a long-term care solution with no consequences.

  It’s good reason to put a long-term care plan in place for when you need it and to figure out now how to finance your long-term care, whether through your own assets or long-term care insurance or some combination.  

  That way your children can lend a hand and emotional support as needed and preserve their good health.

   

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• 5 Tips About Immediate Annuities and Retirement

  9:03 am on February 1, 2010 Permalink | Reply
  

  In the coming months, you’ll be hearing more about annuities as a solution to outliving your savings, especially immediate annuities.

  The White House said last week it plans to promote “the availability of annuities and other forms of guaranteed lifetime income, which transform savings into guaranteed future income, reducing the risks that retirees will outlive their savings or that their retirees’ living standards will be eroded by investment losses or inflation.”

  Income for Life

  For retirees and near retirees, the annuity type that is getting a lot of attention right now is the immediate fixed annuity ,also called life annuity or single premium immediate annuity (SPIA).

  The concept of an immediate annuity is simple: you give an insurance company a lump sum of money; it gives you a contract guaranteeing how and when you receive payments that include interest on your money.  The amount of money you receive depends on the contract terms including your age, gender, ownership and payment terms. 

  It is this contracted guarantee that makes an immediate annuity an attractive way to manage risk of outliving your money.

   A study from Americans for a Secure Retirement conducted by Ernst & Young, LLP, warns that “…many American will be forced to reduce their standard of living, some by as much as 51 percent, to avoid outliving their financial assets and that households with a guaranteed source of retirement income outside of Social Security, such as a lifetime annuity, showed greatest chance of financial success.”

  5 questions about annuities

  The good news is that immediate annuities are pretty straightforward.  Here are a few questions you’ll want to answer if you consider an annuity as part of your retirement portfolio:

   1. How much of your retirement savings will you use to purchase an immediate annuity?  Financial experts advise that this type of investment is best for only part of your savings leaving you adequate money for unexpected expenses and risks that are not insured.

   2. Do the annuity payments just apply to your life, or to you and your spouse (joint and survivor)?

   3. Does your annuity payment include inflation protection? 

   4. Is the insurance company financially strong and one that you have confidence will be there to pay throughout your lifetime?

   5.  Have you compared immediate annuity quotes from several companies to make sure you are getting the right annuity for your needs? 

  An immediate annuity is like creating your own pension plan.  Like any financial product, it may or may not be the right solution for your retirement needs.  And purchasing an immediate annuity is a permanent decision, so consider your options carefully.

  An immediate annuity does have the benefits: it increases the probability that your savings will last a lifetime; it makes budgeting easier by giving you predictable payments; and it provides peace of mind knowing that these funds are not subject to market fluctuates and are guaranteed.

   
• Boomers Flock to Facebook. How About You?

  1:12 pm on January 29, 2010 Permalink | Reply
  

  Are you on Facebook?  That’s the question more boomers and seniors are asking each other. Increasingly the answer to that question is “yes” with boomers and seniors among the fastest growing group of users.

  Facebook, for those unfamiliar with it, is a social networking site lets you connect with friends all over the country – world actually – by sharing comments and pictures.

  It’s an increasingly popular way for family members to stay connected.  You can find old friends and work colleagues.  And, you can follow celebrities, your favorite stores, and companies you like.   Some stores will use the site to post special offers and deals.  It can also be a way to get customer service assistance if you are not getting anywhere on the phone.

  (See our Longevity Alliance page on Facebook.  Become a friend of Longevity Alliance and get updates on health, wealth and lifestyle information and share your ideas.)

  Just as you do with any other website that holds your personal information, make sure you’re smart about what personal information you post and who has access to the information.

  Here’s an article that provides tips on how to set your security settings on Facebook.  Even if you’ve been on Facebook you may find some of these tips helpful as the security settings changed recently.  Here’s a link to Facebook’s security site.

  I just connected with work colleagues who I hadn’t seen in 20 years – fun to catch up and be reminded of people and events from a different time in your life.  Now it’s easier to stay in touch.  Last wedding I went to there were more boomers taking pictures and posting them to Facebook than 20+ year olds.  Even my dog has a Facebook page–and firends (both two-legged and four-legged).

  What’s your experience been with Facebook?

   
• Housing and Retirement: What’s Ahead?

  9:30 am on January 28, 2010 Permalink | Reply
  

  The “Great Recession” is changing our view of home ownership and the types of neighborhood we want to live in retirement, according to new research from the Urban Land Institute (ULI).

   If they are right, it has broad implications for the role of housing in retirement planning.

   Two key predictions from the report, Housing in America, for the decade ahead:

          * Home appreciation will slow considerably, to about 1 percent to 2 percent annually; and,

         * The current U.S. homeownership rate, now at 67 percent (a decline from the record high of 69 percent at the height of the housing boom) will fall further, to about 62 percent.

  Hard hit by the dips in home values are the baby boomers.  The report predicts that both younger and older baby boomers will be staying in their suburban homes –waiting for prices to increase – rather than downsizing or moving to retirement communities.  

  They also predict that the younger generation (those in their 20s) will rent longer, less anxious to buy a home given what they have seen happen to home prices in the past year.

  Here’s what they have to say about the housing preferences of baby boomers:

   *Aging baby boomers (55 to 64 years old) – Although they are nearing retirement age, many will keep working out of necessity or by choice. Some will be forced to stay in their suburban homes until values recover. Those who are able to move will not choose traditional retirement locations or senior housing, opting instead for more mixed-age living environments that cater to their active lifestyles. Suburban town centers with a walkable urban “feel” will appeal to this group.

  *Younger baby boomers (46 to 54 years old), now in or entering their prime earning years – This group will also face a tough time selling suburban homes, hampering the ability of these boomers to move. Because the recession has left many younger boomers with flat incomes and less home equity, their ability to purchase second homes will be greatly diminished, curbing prospects in general for the second home market. However, like their older counterparts, they will be drawn to more connected, compactly designed communities when they are able to switch houses.  

  Some seniors are already finding the housing market decline to have a disastrous impact on their ability to finance long-term care. The housing appreciation they hoped would pay for long-term care is gone and or they can’t sell their home to free-up money to move into a retirement community, assisted living or nursing home.  If you anticipate selling your home to finance future long-term care needs that may no longer be very realistic.  You might want to consider long-term care insurance that could help pay for care at home (some policies also permit funds to be used to pay for home modifications).  A reverse mortgages (for those 62 and older) are another way to help finance staying in your home as you age.   This article provides some tips on how home value plays into retirement planning.

  Has the decline in the housing market changed your retirement housing plans? Do you think the report is right that traditional age-restricted retirement communities are a thing of the past?

   
  • 

    TFR500 9:20 am on February 2, 2010 Permalink
    

    Interesting blog. Yes, the “younger baby boomers” are a crucial segment to grasp in understanding housing trends. Fortunately, we are learning more and more about them now that they have a name (Generation Jones) and identity which is receiving so much national atttention. Google “Generation Jones”, and you’ll see it’s gotten a ton of media attention, and many top commentators from many top publications and networks (Washington Post, Time magazine, NBC, Newsweek, ABC, etc.) now specifically use this term. In fact, the Associated Press’ annual Trend Report chose the Rise of Generation Jones as the #1 trend of 2009. Here’s a page with a good overview of recent media interest in GenJones: http://generationjones.com/2009latest.html

    It is important to distinguish between the post-WWII demographic boom in births vs. the cultural generations born during that era. Generations are a function of the common formative experiences of its members, not the fertility rates of its parents. Many experts now believe it breaks down more or less this way:

    DEMOGRAPHIC boom in babies: 1946-1964

    Baby Boom GENERATION: 1942-1953

    Generation Jones: 1954-1965

    Generation X: 1966-1978

    Sophisticated players in the housing industry will make serious bucks by learning about the key differences in consumer and real estate purchasing behavior among Jonesers which differs from its surrounding generations.

• New to Medicare? It’s Smart to Compare Medicare Insurance Plans

  12:10 pm on January 25, 2010 Permalink | Reply
  Tags: Medicare (8), Retiree health insurance

  Most of the time we buy health insurance through our employer, often life and disability insurance as well. 

   So, what happens as you approach 65 and no longer have an employer to purchase through and don’t have retiree health benefits and need to select a Medicare health plan?

   You are on your own.

   Your benefits office may have some guidance for you, the Internet can serve up an often dizzying choice of plans and your mailbox will probably start filling up with “turning 65” offers. And health care can be one of your biggest expenses in retirement, so selecting the right plan is important.  

   Here are 3 tips for finding your way through the Medicare health plan maze:

  1. Don’t Assume Your Current Insurer is the right choice for your Medicare Plan.

  Not all companies offer all plans.  Some health insurance companies offer either Medicare Supplement or Medicare Advantage plans, others offer both.  Those who offer Medicare supplement plans may offer only a few – the most popular–of the standardized plans available.

  If you are selecting a Medicare Advantage plan check and compare plans carefully to see what is included and not included.  If keeping your current doctors is important, start by comparing plans from companies that your doctors accept. Then compare co-pays, premiums and benefits.

  2. Shop and compare prices. Medicare supplement plan prices vary widely. 

  Medicare Supplement plans are standardized.  That means each company must offer identical benefits.  It doesn’t mean they have to charge the same price…and prices can vary a lot.  So once you decide on which plan (by letter Plan A, Plan B, Plan F, etc.) then get prices for that plan from 2 to 3 different insurance companies.

  3. Compare benefits and premiums.

  It’s not just the premiums when it comes to comparing Medicare Advantage plans and Medicare Part D plans.  You’ll want to look at co-pays, premiums, and additional benefits.  For example, some Medicare Advantage plans come with benefits like free health club membership.  If that’s not important to you, look at a plan without that benefit and see how it measures up. 

  The Medicare website has tools that help you compare plan details as well as prices.  This also might be the time when you want to contact an expert in Medicare health insurance plans to help you find the right plan.  Your local area office on aging has resources that may be helpful.  Or contact an insurance broker who specializes in Medicare health plans and has a choice of companies for you to consider. 

  Insurance rates are approved by each state’s  insurance commission.  So unless you are looking at a plan designed and marketed by a specific group (like an association), whether you receive a quote from the company directly or the agent, the rate for an identical plan should be the same.   So you can save yourself some time and effort by finding a source that can quote you plans from a variety of companies.

  So as you approach 65, start gathering information and make sure you know the sign-up deadlines so you don’t get hit with a penalty. 

  If you are 65 and still working, contact your benefits office to find out how your health insurance works with Medicare. 

  The Medicare  and You 2010 book can help you get familiar with the ins and outs of Medicare.

   
• Time for a New Career? Resources for Boomers and Seniors

  1:58 pm on January 21, 2010 Permalink | Reply
  

  So, you’ve decided retirement isn’t for you. Or you’ve been “right-sized” out of a job.  Now what? 

  Whether it’s for the money or to stay engaged and meet new people or learn something new, the good news is that there are a lot of resources for baby boomers and seniors ready to embark on finding a new career.

   Check out these resources to get you started:

   Encore Careers

  When this term first started being used it referred primarily to volunteer activities.  But the recession changed all that.  An encore career refers to a point in time when you finish up work in one field and switch to something new –usually in the non-profit or social mission area.

   One of the best sources on Encore careers is http://www.encore.org.   It includes information and resources no matter whether you are at the beginning or middle of your search.  There’s also a list of transition groups in different parts of the country to help you find local resources and people who share your stage of life.

   Here’s a Business Week article featuring 16 Encore success stories if you are wondering what type of opportunities to explore.

  You should also check out the resources at the career website What’s Next  which includes resources, guides and links to career coaches.

   Going Back to School

  A growing number of community colleges are offering courses specifically geared to helping people 50+ retool for a new career.  Here’s a map of community colleges with special programs.  

  If your local community college is not listed, call them and find out if they have any special programs.  Your local senior center might also offer community college courses at a reduced rate (don’t shy away from the senior center because of its name – many of them have great resources).

  You may also find special rates for people 60+ on classes and certificate programs at local colleges and universities.

   With the prospect of increased longevity and increasing costs on such basics as health care, an encore career might be just the right way to energize yourself and your retirement account.

   
• Switching Medicare Advantage Plans?

  10:02 am on January 18, 2010 Permalink | Reply
  Tags: Medicare Advantage (3)

  Not pleased with your Medicare Advantage plan? Meant to switch before the end of the year, but never got around to it? You have one more chance to change your Medicare Advantage plan for 2010.

   If you didn’t get it switched during the November through December annual election period, you have one more opportunity to switch plans during what is called the open enrollment period from January 1 – March 31.  Here’s a link to a tip sheet from Medicare on enrollment periods and what you can do.

  During the open enrollment period you can change Medicare Advantage plans if you feel you have the wrong plan.  Only one change per year is permitted.  So even if you changed plans in the recent annual election period (Nov. 15 – Dec. 31) you may be able to change plans during the open enrollment period January 1 – March 31.

  Changes that can be made during the Open Enrollment Period include:

   *Medicare Advantage Plan with prescription Drugs (MA-PD) to a different MA-PD

  *MA-PD to Original Medicare and a stand-alone Prescription Drug Plan (PDP)

  *Original Medicare and a PDP to an MA-PD

  *Medicare Advantage Plan without Prescription Drugs (MA) to a different MA

  *Original Medicare to an MA 

  Remember that if you switch from a Medicare Advantage Plan to Original Medicare (Part A and Part B) and want to purchase a Medicare Supplement plan you will likely to need qualify for the Medicare Supplement Plan by going through underwriting. That means that will look at your current health conditions and decide whether or not you qualify for their insurance policy.

   So make sure you don’t drop your Medicare Advantage Plan until you know that you are approved for a Medicare supplement plan to compliment Original Medicare.  Original Medicare only covers a portion of the costs (generally 80%), so a Medicare Supplement Plan is a wise way to cover the remaining health care cost risk.  It is best to work with an insurance agent or company who is knowledgeable about Medicare health plans.

   Resources:

  Understanding Medicare Enrollment Periods tip sheet

   Medicare.gov

   Medicare and You 2010 government brochure 

  Longevity Alliance – Information and quotes on a choice of Medicare Health Plans

   
• Donations for Haiti: Tips for Giving Safely

  10:07 am on January 15, 2010 Permalink | Reply
  

  As the horror of the magnitude of suffering continues to unfold in Haiti  the call for donations to help continues.  As you consider your donation options, make sure you know where your money is going and that it is being directed to efforts in Haiti.

  Unfortunately, online and telephone phishing scams will  proliferate. Here’s an article from SmartMoney with tips on how to give during this crisis.

   The article recommends:

  * Stick with established groups.

  * Assess the charity’s plans – how will your donation be used; what’s the charity’s history of the amount of a donation that goes toward administration and toward relief.

  * Designate your gift – if you want your donation to be used specifically for Haiti relief efforts, say so.

  * Write a check rather than use plastic – less of your donation will be eaten up by fees.  If you are texting a donation, the transaction fee may be waived. Find out.

  * Watch out for phishing scams – make sure the site you are at is the “official site”.  If you get a call, don’t provide your credit card number.  Your best bet is to ask where you can send a donation by mail or call them directly to make sure you are reaching the official charity.

   The U.S. Better Business Bureau runs this website where you can check whether the group you are thinking of donating to is legitimate.

   A list of groups and links from Google.

  The Clinton Bush Haiti Fund

   

   

   
• Know Reverse Mortgage Rules Before You Sign

  11:41 am on January 13, 2010 Permalink | Reply
  

  As the housing market doldrums continue, it’s likely that older homeowners will turn more frequently to a reverse mortgage to help cover some of their expenses.

  A reverse mortgage might be just the right thing to do.  Or it might not.  Like any financial transaction it all depends on your individual circumstances.

  A word of advice for anyone considering a reverse mortgage:  understand your commitment and the costs involved in a reverse mortgage.  Do the retirement planning math to determine if it is the best way for you to generate the cash you need.

  It’s particularly important as the economy and housing market remain sluggish and the marketing hype by less scrupulous lenders picks up.

  Reverse mortgages are available to homeowners age 62 and older who have equity in their real estate and want to turn it into cash to cover such things as daily expenses or long-term care or medical bills.

  Regulators have grown increasingly concerned about seniors’ lack of understanding of what they are signing up for.  Some of that comes from misleading marketing and advisers.  While counseling is required before taking out a reverse mortgage, we know that many of us don’t fully comprehend the details, especially if we’re under financial stress.

  So here are some warnings from the current proposed rules for lenders. 

   * Understand the costs.  Don’t be fooled by marketing that calls reverse mortgages low cost or low risk or a government benefit.  It is a financial transaction with some fairly substantial upfront costs.  There may be some other ways to tap the equity in your home that would make more sense for your financial situation. Also, the income you receive may impact your ability to receive assistance from government programs. Look at the whole picture – today and in the future. 

   * Understand your ongoing obligations. This is a mortgage that requires repayment – it’s just usually happens from proceeds of the loan. You are still responsible for maintenance of the home, property taxes and hazard insurance.  If there is no escrow attached to the reverse mortgage the homeowners need to pay those fees on their own.

   * Watch Out for Cross-selling of Products.  Walk away from agents who try to push you into taking proceeds and then investing the money in annuities or other investments, or any type of additional services.  How the proceeds are paid out is an important financial decision for you.  Make sure it’s not influenced by the commission your agent would be receiving for selling you additional products.

  A reverse mortgage can be a great resource for helping you stay in your home and there are reputable companies that can help you determine if it is right for you.  But make sure you fully understand the costs and obligations that come with it. And don’t get caught by a scammer, masquerading as a reverse mortgage lender but really just trying to get your data or sell you an investment.

  Here are 10 tips from the government about reverse mortgages.

  A Washington Post article about potential pitfalls of reverse mortgages.

  Article on reverse mortgage mailing that’s sounds like an official government program – but it’s not.  Don’t get caught.

   
  • 

    Laura 10:40 am on January 21, 2010 Permalink
    

    Here’s another resource if you are considering a reverse mortgage loan.

    The National Council on Aging (NCOA) is offering free counseling for seniors through its Reverse Mortgage Counseling Services (RMCS) Network.

    Through the end of April, RMCS counselors are waiving the usual $125 counseling fee in order to help more homeowners understand how reverse mortgage loans, along with community programs and other options, could help them to remain in their homes.

    Consumers age 62+ can schedule a free reverse mortgage counseling session through April 30, 2010 by calling 1-800-510-0301.

    “An increasing number of older adults are struggling with day to day expenses, yet have considerable value in their homes. Home equity can keep small financial challenges from becoming overwhelming problems, but many homeowners need guidance on how and when to use this asset,” said Barbara Stucki, PhD, Vice President of the Home Equity Initiative for NCOA. “We are offering free counseling so that more older adults can learn how to use their home equity at a time when other assets may be depleted.”

    NCOA counselors do not charge fees upfront, only at the time of closing should the client decide to take out a reverse mortgage. NCOA counseling is always provided at no cost for clients with annual incomes of less than $20,000 for individuals or $30,000 for couples.

    NCOA also offers a free consumer booklet on reverse mortgages, entitled Use Your Home to Stay at Home.
    http://www.ncoa.org/news-ncoa-publications/publications/ncoa_reverse_mortgage_booklet_073109.pdf

• Extra Help with Medicare Prescription Drug Plans

  12:11 pm on January 11, 2010 Permalink | Reply
  Tags: Medicare (8)

  For some Americans who are enrolled in Medicare and have trouble paying their prescription drug costs, a change in the law might bring some welcomed help.  It’s called the “extra help” program and is available to those with low income and limited resources. 

  The extra help program currently provides assistance to more than nine million senior and disabled Americans — saving them an average of almost $4,000 a year on their Medicare prescription drug plan costs.  

  Beginning Jan. 1, a new Medicare law eases the income and resource requirements in two ways:

   1 It eliminates the cash value of life insurance from counting as a resource.  

   2. It eliminates the assistance people receive from others to pay for household expenses, such as food, rent, mortgage or utilities, from counting as income. 

  The Extra Help program can pay for the costs–monthly premiums, annual deductibles, and prescription co-payments–related to a Medicare prescription drug plan. To qualify for Extra Help:

  • You must reside in one of the 50 states or the District of Columbia.
  • Your resources must be limited to $12,510 for an individual or $25,010 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. Your house and car do not count as resources; and
  • Your annual income must be limited to $16,245 for an individual or $21,855 for a married couple living together. Even if your annual income is higher, you still may be able to get some help. Some examples where your income may be higher are if you or your spouse:

                            * Support other family members who live with you;

                             *Have earnings from work; or

                             *Live in Alaska or Hawaii.

  If you or someone you are caring for could benefit from the program, more information and an application form are available at the Social Security website or call Social Security at 1-800-772-1213 (TTY 1-800-325-0778).