What’s harder – building a fund to take you through retirement or managing income in retirement to make sure your money lasts a lifetime?  They are both  a challenge. 

Building a retirement fund (51%) is slightly more of a concern than managing retirement income (40%)– but they are both high on the top issues facing American consumers, according to a new survey by the Certified Financial Planner Board of Standards.

 The recent financial crisis has brought home the importance and challenge of managing income in retirement.  Mistakes are hard to correct since, at this time of life, there is often not enough time to rebuild savings.

 If that’s a concern for you, this white paper, Making Your Nest Egg Last a Lifetime, is helpful in sorting through the strategies available for how to manage your money in retirement. The paper is by Anthony Webb at the Center for Retirement Research at Boston College.

It goes through the three traditional strategies people use in deciding how to make their nest-egg last a lifetime: (1) spend the income, conserve the capital; (2) spend down over their estimate life expectancy; and, (3) spend a fixed percent of their initial nest egg each year.

 Using the first strategy, you may end up under spending – and foregoing some activities like travel– for fear of tapping the capital. In the other two cases, guessing wrong on life expectancy can leave you in the position of having spent all your money. And none of these deal with the very real possibility of a health event that can lead to increased financial expenses.

The paper makes a case for immediate annuities to cover at least basic living costs.

 ”Given the difficulties in managing the decumulation of unnanuitized wealth and the sever consequences of mis-steps, all household approaching retirement should consider annuitizing sufficient financial assets to secure at least their minimum standard of living,” the author recommends.

The article does a nice job of laying out the arguments, trade offs and possibilities.

If you are worried about managing your money in retirement, it’s worth a read.

While Congress tackles issues of health care reform, companies are testing technology that will truly change the way we receive health care and long-term care as we age.  Some are simple brain-games that keep our mind sharp. Other companies, such as GE and Intel are looking at how we can monitor chronic conditions at home and send regular updates to our doctors.

 This article, Intel WantsYou to Age Gracefully, at Home, provides a good sense of the way we may interact with the health care system in the future.  One of the most exciting benefits is that more of us will be able to age at home – where research continually confirms we want to stay as we get older.

If you are interested in this topic and the companies that are bringing innovation to this market, check out the new special report from Business Week.

And, here’s a tip if you are shopping for long-term care insurance.  Many long-term care insurance plans now have  provisions for advances that may be made in care and provide guidance for how these new technologies would be covered under a long-term care insurance plan.  If staying at home and independent is important to you, ask whether your long-term care insurance plan will allow you to take advantage of advances in technology.

If you are seeking assistance now for an aging parent or friend, find out if the assisted living or nursing home you are considering uses technology to monitor residents and communicate with physicians or plans to in the future.

American Airlines non-union retirees got some bad news about their retiree health insurance:  It’s gone as of 2010.  That shifts a big financial burden to 5500 retirees:  health insurance costs they thought were covered. Retirees will be paying the entire cost putting a big dent in their retirement budget.

American Airlines is hardly the first employer to stop retiree health insurance.  The trend toward reducing or eliminating retiree health insurance has been going on for several years.  But for the people who receive the letter, it comes as a shock and adds new concern for their financial future. It also probably means entering the Medicare maze of plan choices, outside of the employer selected plan, for the first time.

 If you find yourself in this situation, what should you do?  Here are three important steps.

1.  Learn About Medicare Health Plan Options.  Find out the difference between Medicare Supplement plans and Medicare Advantage plans and  Medicare Part D plans.  Determine which product is right for you. Make sure you compare out-of-pocket costs as you use the plan, not just the monthly premium. If keeping the same doctors is important to you, then find out what Medicare health plans they accept.  Medicare.gov has helpful information on the differences in the types of coverage as well as a compare plan feature.

2.  Shop and Compare at Least Two Plans.  In this new pay-on-you-own environment you need to shop and compare.  Once you start shopping you will find that there are a number of options and prices can vary dramatically for the same coverage among different insurance companies. Start with the company you had, if you were pleased with their plan.  But don’t stop there.  The insurance company you had may not be the right company now from a price perspective. You can use an insurance broker with expertise and experience in Medicare related health insurance products to help you find the right coverage for your budget and needs.  If you will be shopping for Part D prescription drug coverage have a list of your medications, quantity and frequency ready.

3.  Know Your Deadlines.  Know exactly when your coverage ends since that will trigger your eligibility to switch to a new plan and may protect you from having to go through health underwriting.  In most cases you have 63 days after you employer-provided coverage ends to get new coverage without having to wait for the annual Enrollment period (Nov. 15 – Dec. 31) for Medicare Advantage and Medicare Part D plans. But check the specific detials with the employer.

Don’t delay.  Start shopping right away so that you can find the best plan for your budget.

With all the talk about flu shots, things can get confusing for Medicare beneficiaries.  So here’s a quick look at seasonal flu and swine flu information for those on Medicare.

One way for older adults, especially those with chronic health conditions, to stay healthy is to get a seasonal flu shot.  For years, the regular flu shot has been recommended for those 50 and older.  The regular seasonal flu shot is now available and for those with Medicare Part B, the vaccine and the administration of the shot are covered by Medicare. If you have a Medicare Advantage plan check with your managed care plan first to see what the rules are for flu shots. 

An easy way to find locations administering flu shots in your area is to go to http://www.flucliniclocator.org. If you are in a managed care plan, make sure that your plan allows you to go outside the network for flu shots.

But the rules around the H1N1 flu shot  (swine flu) are a bit different.  This is a flu that hits the younger generation much harder so they are the prime target for flu shots.  Here are the CDC recommendations on who should get the H1N1 flu shot when it is ready:

• pregnant women,
• persons who live with or provide care for infants aged <6 months (e.g., parents, siblings, and daycare providers),
• health-care and emergency medical services personnel,§
• persons aged 6 months–24 years, and
• persons aged 25–64 years who have medical conditions that put them at higher risk for influenza-related complications.

Those over 65 are not a top priority.  So for now, you probably  don’t need to worry about getting the swine flu shot. Medicare said that it will cover the H1N1 flu shots.  Find out more about the swine flu at Centers for Disease Control and Prevention (CDC) .  And, always check with your doctor if you have any questions.

If you have health insurance through your employer or an individual policy, check with your insurer on their rules for covering both types of flu shots.

Taking advantage of preventative care, like a flu shot,  is one way to save on your health care costs.

Long-term care planning is an important part of your financial plan since long-term care costs can deplete your retirement savings in no time at all.  Many financial planners recommend long-term care insurance to their clients because they know that by shifting these potential costs to an insurance company, there is more flexibility in the way the rest of your portfolio is managed.

To better understand why to consider purchasing now, let’s look at two personal factors that impact long-term care insurance:  your age and your health.

Here are two rules of thumb:  (1) the younger you are when you buy, the lower your premium (cost) will be. And, (2) the healthier you are the better chance you have of being accepted for coverage and receiving a good health discount.

 1.  Age.  Long-term care insurance rates are based on your age at the time you apply.  With each birthday you celebrate, the cost of coverage goes up.  Buying at a younger age can save you money. It’s tempting to think that you can game the system, buy later and pay less overall.  But, because the price goes up each year due to your age (and insurance companies also increase rates on their plans) you can save money by locking-in your costs at a younger age.

 2. Your health status can impact long-term care costs in several ways.  First, if you have certain health conditions when you apply you will pay more than someone who is healthier.  Why?  You represent more risk to the insurance company so they charge you more for the insurance coverage.  But, the impact may be even more significant.  Certain health conditions may require putting off applying. For example if you have recently had an outpatient procedure, you may be asked to wait several months to apply – or years, if it is more serious surgery.

 If the condition is severe enough, you may not be able to get coverage at any cost. Or if you have two conditions which working together create a higher risk, you may not be able to be covered (insurance companies call these co-morbid conditions). If you have a family health history of conditions that are disqualifiers for long-term care insurance (i.e.: dementia, Alzheimer’s, MS, Parkinson’s, etc.), it might be even more important to you that you purchase soon.

So, long-term care insurance has evolved from a post-retirement purchase to a fundamental of financial planning and risk management for people in their 40s and 50s. According to research by the American Association for Long-Term Care Insurance (AALTCI), one third (33%) of buyers of individual long-term care insurance protection in 2007 were under age 55.  The average age of a purchaser is now about 56 years old.

No matter how old we are, there are still lessons to be learned from our parents. Retirement planning is no exception.  Watching our parents or older family members handle the financial impact of the recession on their retirement is leading more baby boomers to plan better for their own retirement.

 Fifty-one percent (51%) of those familiar with their parents’ finances say they are thinking more deeply about their own retirement planning after seeing how the recession affected their parents, according to the monthly Financial Security Index survey from Country Financial.

An increasing number of retirees are being impacted by losses in their retirement funds and by increases in health care costs.  That double whammy usually means scaling back retirement plans and lifestyle. 

And, while many older workers and retirees say that working longer will be the solution to their retirement planning, retirement is not always voluntary.

Only about half (51%) of all current retirees say they retired because they wanted to. About a third (32%) say they had to retire for health or other reasons, and about one-in-ten (9%) say their employer forced them to retire, according to a survey from the Pew Research Center.

So if the recession has you more focused on retirement planning, here are three steps that can help you improve the chance of reaching your goals:

1.  Learn about Medicare and Social Security – There are a lot of myths about Medicare and Social Security.  So the sooner you plunge in and learn the basics about Medicare and Social Security, the more realistic your retirement plans can be.  The websites for both government programs provide great information.  When you decide to take Social Security benefits can have a tremendous impact on your retirement income for the rest of your life.

2.  Protect Yourself from Catastrophic Events — – This is what insurance does best.  Long-term care insurance can provide financial resources for your family to take care of you if you can no longer take care of yourself.  Over 70% of people age 65+ end up needing some level of care during their lifetime, so why not plan for it?  The younger and healthier you are when you purchase long-term care insurance, the lower the premiums. At a minimum, have a plan for long-term care if you need it.

No matter what happens with health care reform, the need for a long-term care plan will still exist.  Health care reform focuses on medical care, not custodial or personal care which if what long-term care refers to.  

Same for Medicare health plans.  Medicare covers just 80% of health care costs unless you have a Medicare Supplement Plan (Medi-gap) or are enrolled in a Medicare Advantage plan.  Making sure you have the right Medicare health plan can save you thousands of dollars in health care costs. Learn the A-B-C’s and D of Medicare.

3.  Get healthier/Stay Healthy – Regular exercise, a healthy diet, taking medications as prescribed and regular check-ups. Why?  If you are healthy, you have a better chance of staying employed whether it’s at the job you have today or retooling for a new career.   If you are healthy, your health insurance will probably cost you less (if you are purchasing on your own), and your out-of-pocket costs will be less.

When was the last time you reviewed your life insurance coverage with your current life style, financial and family situation? As with many financial issues, we often make a decision (buy a policy, make an investment) then check it off as “done”.

It’s smart to take a periodic look to see if your life insurance policy still meets your needs and compare prices on current policies. With many of us facing a drop in our retirement funds, life insurance may play a more important role than ever in assuring financial security for family members.

What  major life changes should trigger a look at the amount of life insurance coverage you have?  Here are just a few :

• Marriage or divorce
• A child or grandchild who is born or adopted
• Significant changes in your health or that of your spouse/domestic partner
• Taking on the financial responsibility of an aging parent
• Purchasing a new home
• Caring for a loved one who requires long-term care
• Refinancing your home

One situation that a growing number of baby boomers are facing is caring for an aging parent or loved one.  Assistance can take many forms.  It may be financial assistance in paying bills or paying for special events, such as trips to see the grandchildren.  Or you may be providing caregiving assistance, such as dropping in every day to check up, taking care of household chores such as cleaning, grocery shopping and outside maintenance, or traditional caregiving duties such as staying in their home for a period to assist with everyday activities. 

If something were to happen to you, would there be money available to hire someone to cover what you are doing?  Does your will reflect how you would assure that funds could be directed for their care? 

If there has been a major change in your life, make sure that your life insurance is at a level that it will still do what you want it to do.  Make sure your beneficiary information is current and the policy is in a safe place so family members can easily find it.

You know that physical exercise is good for your health.  But did you know that exercising your brain should be part of your regular routine, too?

The field of brain health is exploding.  If you take mass transit to work, you see people doing crossword puzzles and Sudoku and playing hand-held brain games.  And they are baby boomers and older. You’ve probably seen ads on TV for Nintendo’s Brain Age games. The popularity of these games has gained as scientific studies continue to show that brains can generate neurons and change over a lifetime.  Neuro-imaging of the brain and well-documented clinical studies show that planned brain exercise can keep the brain healthy as we age.

And staying healthy not only improves the quality of your life, but also keeps your health care costs down. And in this economy, we’re all looking for ways large and small to reduce our expenses.

How to select the right electronic  program

 So, if you want to tone up your neurons, what’s important in selecting a program?

Sharpbrains.com  a market research and advisory company in the cognitive health and brain fitness market offers 10 questions to ask when you buy or use a brain health product.

 1.  Are there scientists (ideally neuropsychologists) and a scientific advisory board behind the program?  Neuropsychologists are neuroscientists with a specialization in measuring and understanding human cognition and bran structure and function.

2. Are there published, peer-reviewed scientific papers written by those scientists?  How many?  Check out PubMed (http://www.ncbinlm.nih.gov) which provides citations from science journals.

3. What are the specific benefits claimed for using this program?  Make sure the results described are measurable.

4.  Does the program tell you what part of the brain or cognitive skill you are exercising and can you see your progress?

5.  Is the program structured with guidance on how frequently you should use it?

6.  Do the exercises vary and teach something new?  Doing the same exercises over and over isn’t what you are looking for.  In order for the brain to grow, you need to be continually challenged.

7. Does the program challenge or motivate you, or does it feel like it will become easy once you have learned it.  It’s not all that different than weight training – continually increasing difficulty improves performance.

8. Does the program fit your personal goals? Different programs work better for different goals.  For example, do you want to manage anxiety, improve your short-term memory, listen better, or improve concentration levels?  Find a program that fits your goals.

9.  Does the program fit your lifestyle? Some of the questions you might want to ask are:  How much time does it take; how frequently do you need to exercise; and, is it portable?

10.  Are you ready and willing to begin and stick with the program?  If it’s going to add additional stress, it’s probably not the right time to start.  Stress can reduce the creation of new neurons. 

Not interested in electronic games?  Then try crossword puzzles or Sudoku.  Or use chop sticks occasionally?  Anything that engages your brain and makes it work a bit harder will help keep you sharp.

The last year has been a wild financial ride, especially for baby boomers and seniors.  The economic meltdown hit many retirement nest-eggs hard.  More of us are putting retirement plans on hold while working to rebuild retirement savings.

So what have we learned in the last year?

1. Controlling Debt Gives You More Flexibility..and a Better Night’s Sleep

Looking back at the past decade, it was a heady time. We bought, we charged, and we lived big.  The problem is the bill came due. For those of you who controlled your spending, congratulations!   For those with debt, keep paying it down and don’t add on anymore – no matter how tempting the deals.

The closer you are to retirement, the less debt you want. That’s why paying off a mortgage before retirement is a rule of thumb in retirement planning. And why, no matter how much you love your children, let them take on the school loans – not you.  They have more time to make the payments; you need to be directing your savings toward retirement.  And with less debt, you have more flexibility in adjusting your financial plan if the need arises.

2.  Returning to Savings

As a nation we have been saving more. But in July the savings rate started to dip again.  While the economy needs more consumers to spend, consumers also need to keep saving to build retirement funds. With more of us reliant on our own savings in retirement than pension plans, saving is critical to financial security.

 So if the economic crisis got you back into a savings habit, keep it up.  If you are still working, take advantage of tax deferred accounts like 401(k) s and IRAs. And if you are over 50, you still have time to take advantage of catch-up provisions that let you contribute an extra $5500. Make sure your emergency accounts of 3 – 6 months are in accessible funds.  And, keep up some of those cost-saving habits like clipping coupons, and comparison shopping whether it’s small items like groceries or big items like life insurance.

 3.  A Plan Helps Make Sense of the Unexpected

To say things don’t always go as planned, you only have to look to the stock market and housing market a year ago. While having a financial plan didn’t save you from being caught in the recession, it does make it easier to understand what you need to do next to reach your financial goals, whether it is to work more, save more or spend less. (or all of the above).

September is a great time to recheck your plan: review your investment portfolio; review your insurance plans; and make year-end changes that might reduce your tax bill.  For example, some people who thought they would be able to self fund long-term care risk are now finding that the hit to their retirement nest-egg has eliminated that possibility.  Long-term care insurance is one way to shift some or all of the risk of long-term care expenses from you to an insurance company.

4.  A House is Simply a Place to Live and Enjoy

The housing bubble has had a substantial impact on many Americans and their sense of wealth.  What we seem to be learning is that most times a house is a place to live—not an investment.  Counting on wild growth appreciation to fund a lifestyle, now or in the future is not prudent.

A home can help fund retirement and it can be a source of funds (through a reverse mortgage) but not when it is highly leveraged with little equity.  As you age, having a housing plan is an important step in your financial plan.

5.  Healthier Can Be Wealthier, Simpler Can Be Fulfilling

There are countless stories of people who have taken this economic set back as an opportunity to change their ways.  Not just financially, but discovering a new healthier and simpler lifestyle or getting back to exercise, and eating more healthy foods. We’ve also seen the recession pull families together helping each other through tough times, and a renewed sense of financial awareness among the young adults of Generation Y.

Consumer confidence and overall well-being improved in August, according to the Gallup-Healthways U.S Well-being Report. While we’ve still got a ways to go, more of us are feeling more confident that we can take steps to lead us to a financially secure future.

 What steps have you taken during the past year – big or small- that make you feel like you are getting your financial life back on track?

So what do you do if your employer is not one of those exemplary employers for people over 50? Many companies have cut their pre-retirement resources to the bone so people who might have been able to help you with retirement questions are either gone or overloaded with other work.  

Still, the first thing to do is check with your Human Resources staff for guidance and referrals.  This is particularly important if you are continuing to work but are approaching 65 and need to sign up for Medicare.  Understanding how your employer health insurance works with Medicare is really important.

Then, check these 3 places to get help with retirement decisions outside the workplace:

1.  Government Resources – If you have questions on Social Security or Medicare the government websites have lots of information.  You often have to keep poking around to find the right information, but there are brochures and Q&As to help you understand how the programs work, how they interact with employer benefits or pay if you are still working. The estimator tool on the Social Security site is excellent and will show you the impact on your benefits if you take benefits early.

2.  Local Resources – Check out your public library for information and also helpful seminars.  Find the local senior center in your area and find out what services or workshops they have coming up.  Many senior centers are actively creating programs to attract baby boomers and near retirees, so don’t be put off by the word ‘senior.”

3.  Professional Experts– Seek out professionals who can assist you. Make sure they have expertise in this stage of life.  For a fee, financial planners or advisers can help you figure out not only your financial situation but also make recommendations and referrals about other aspects of retirement living. Companies like Longevity Alliance,which specializes in pre-retirement and retirement products like long-term care, Medicare plans and annuities, can help you sort through the options and products to find solutions that meet your needs.