There’s lots of talk these days about working well into what used to be “the retirement years.”  One way people are doing that is by following a passion and becoming a social entrepreneur and making a difference, engaging in what is called “encore careers.”

This week five social innovators received Purpose Prize awards of $100,000 each and five others received awards of $50,000. They include:

• A former telecom executive who helped wire an Appalachian county and brought laid-off factory workers back to profitable farming.
• A professor who invented a way to transform toxic fly ash into green bricks.
• A psychiatrist who helps saves soldiers’ lives by offering free mental health treatment.
• A former NASA exec who works to treat alcoholism in Native American communities by reviving old customs and traditions.
• A couple who honor their son, killed on 9/11, by helping to bring mental health services to countries ravaged by terrorism, violence and war.

You can read more about the winners and see videos about their projects at http://www.encore.org. We think you’ll find them  inspiring.  There were more than 1000 nominees for this year’s prizes. 

“More than ever, the problems facing our communities, our country and our world call out for creative solutions,” said Marc Freedman, co-founder of The Purpose Prize and author of Encore: Finding Work That Matters in the Second Half of Life. “Fortunately, we don’t run out of ideas as we age.”

If you know someone – or are yourself a social entrepreneur over 60 – nominations for the 2010 awards are open until March 5, 2010. The application information is located here.

Motivated to find your own Encore career?  You’ll find lots of helpful information at this non-profit site — http://www.encore.org.

The costs of receiving long-term care continued to climb in 2009 making it as important as ever to have a plan in place to pay for long-term care.  Whether you are a baby boomer planning your financial future or concerned about the cost of help for aging parents, take note. The numbers are sobering.

 According to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs.

* Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year.

* Assisted living costs also rose 3.3% on average to $3,131 per month.

* Home health care aides now cost an average of $21 per hour, a 5% increase;

* Adult day services run $67 per day, a 4.7% increase.

 But the averages are just that – national averages.  What you really need to know is what is happening with long-term care costs where you live.  You can read the full MetLife report here which breaks down rates by state.

For example, a home health aide can cost you $30 per hour in Rochester, Minnesota (the highest in the nation) and $13 in Shreveport, Louisiana.

Adult day care averages $150 per day in Vermont (the highest in the nation) and $27 per day in Montgomery, Alabama.

The costs are often surprising since they may be driven more by scarcity of workers than general pay levels in the area. 

What do you do with this information?

 1.  Use it for long-term care planning.  How much will you need to pay for care if you need it in the future?  Whether you self-fund or purchase insurance, looking at costs today and projecting out future costs can help you realistically plan for future long-term care costs.

 2.  If you purchase long-term care insurance, use the charts in the report to determine how much coverage makes sense for you given your financial resources and where you expect to live.  While we can’t know what the future holds, we can at least make an educated guess on the prudent amount to have set aside for long-term care. This data also demonstrates the wisdom of purchasing long-term care insurance coverage with inflation protection.

 3.  If you are helping care for an aging parent or anticipate doing so in the future, this information can give you the costs of different ways of getting help for your loved one.

 4.  If you are looking at assisted living facilities, look at the information provided about add-on costs.  This can help alleviate surprises and give you a better sense of what to ask about when you are comparing facility costs.

 Resources:

2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services and Home Care Costs.

Long-term Care Insurance Quotes 

You can still save on 2009 taxes, but you better hurry.  Some of these tips apply to those who are working, others to those who are retired and others for both.  Always check with your tax advisor on what’s best for you.

1.  If you are 50 or older and reached your 401(k) $16,500 limit (good for you!), check with your benefits manager about the paperwork for a 401(k) catch up.  That will let you sock away another $5500 into your 401(k).

2. If you have a flexible savings account at work figure out how you’ll make sure to use those funds this year.  A visit to the dentist?  An extra pair of glasses?  Just make sure you know what’s eligible for reimbursement from your plan. Over-the-counter drugs may also count so save those receipts for reimbursement.

3. If you’ve already met this year’s deductible in your health plan or Medicare, are there any other health care needs you can take care of this year?  Preventative tests?  Elective procedures?  Remember, the New Year means meeting a new deductible level.

4. If you’re lucky enough to be able to gift funds to others, you can give an individual up to $13,000 per year without subjecting the funds to federal gift tax.

5.  Rather than wait until the last weeks of the year for charitable giving, make the contribution now.  That way you’ll make sure the funds get processed in this tax year.

6. In some states, long-term care insurance premiums are eligible for a tax credit or deduction.  And a portion of your premiums may qualify for a federal tax deduction if health care expenses are more than 7.5% of your adjusted gross income. Check with your tax advisor or long-term care insurance expert on the specifics. You may still have time to apply for LTC and get approved in 2009.

7.  If you are over 70 ½ and stopped taking required minimum distributions(RMD) in 2009 from your IRA or other defined contribution plan, a reminder that RMDs are back in 2010. So it’s not too soon to get plans in place to start those up again in 2010.

Looking for information about Medicare benefits in 2010?  The new Medicare and You 2010 is now available online.  Beneficiaries should receive a copy in the mail from Medicare  in November.

This information can be helpful for planning your premium costs and deductibles for Medicare in 2010.

Ressource:

Medicare and You 2010   http://www.medicare.gov/Publications/Pubs/pdf/10050.pdf

More people are saying “yes” to that question and vowing to take more responsibility for their finances, according to MetLife’s Lessons Learned Poll.

Here’s what people say they are doing to change their financial ways:

* Reduce spending on non-essential purchases (65%)

* Build a cash cushion (57%)

* Allocate a portion of investments to guaranteed income or very low-risk products like CDs and annuities (17%)

* Consult a financial advisor (15%)

* Diversify their portfolio (15%)

What’s high on the “regrets” list?  Not building enough of a cash cushion and amassing too much debt.

The financial crisis is also shifting the retirement mindset of many with more than 64% or respondents saying that it has had some influence on the way they plan for retirement. 

And the majority thinks that the events of the past year will have a lasting impact of ten years or more.  While younger generations are optimistic about their financial future, 38% of baby boomers say their personal economic recovery will take ten years or more.

Has the financial crisis made you hit the “reset button?”  What have you changed inyour financial life in the past year?

A frequent question we hear from our customers at Longevity Alliance  is “Should I change my Part D plan this year?”  The answer is – it all depends.

 Here are common reasons why people change Part D plans:

• The insurance company is no longer offering the plan
• The list of drugs covered (formulary) and co-pays have changed.
• The prescription drugs taken have changed.
• Changes in prescription drugs are expected next year.
• Not happy with the service from your Part D company.
• Premium prices went up significantly
• Employer dropped retiree health care benefits
• Moving from a Medicare Advantage plan

You may have some of your own.  But the important thing to know is that, except for a few exceptions, this is the one time in the year you can switch your Part D prescription drug coverage.  

You can switch Part D plans from Nov. 15 – Dec. 31.

So now is the time to find out if changing your Part D plan makes sense. 

Medicare has a Part D comparison tool on its website that can be helpful in getting started on deciding whether you need to change plans.  

If you decide to call an insurance company or an insurance broker to compare Part D plans make sure you have this information handy:

1.   The name of the plan you now have
2.   The prescription drugs you anticipate taking in 2010
3.    Why you think you might want to change plans.

 That will really help the person on the phone get you the best information on which to base your decision.

Another tip– don’t wait until the deadline is close.  Get your information now, so if a switch is the right thing for you to do you can be ready to apply when Nov. 15 comes.

Most Medicare beneficiaries will not see an increase in Part B premiums in 2010.  But they will see slight  increases in deductibles and co-pays.

Generally, if you are now a Medicare beneficiary paying the standard $96.40 per month, your rate will be the same for 2010. With no increase in the Social Security COLA in 2010, the rate on Medicare Part B premiums cannot increase for most beneficiaries.

But if you are new to Medicare or pay a higher rate because your income is more than $85,000 ($170,000 for a couple) or don’t have you Medicare Part B premiums withheld from Social Security payments, rates will be higher unless Congress takes action to stop the increase. 

The new base rate for those coming into Medicare (with incomes of under $85000 or $170,000 for a couple) in 2010 would be $110.50. 

The rates for 2010 for all incomes are listed in the chart below and available at the Medicare website.

But all beneficiaries will see increases in deductibles and co-insurance.  The new 2010 amounts are listed below: 

Part A:  For each benefit period you pay:

A total of $1,100 for a hospital stay of 1-60 days (up $32 from 2009)

$275 per day for days 61-90 of a hospital stay (up $8 from 2009)

$550 per day for days 91-150 of a hospital stay (up $16 from 2009)

All costs for each day beyond 150 days.

 Skilled Nursing Facility Coinsurance

$137.50 per day for days 21 through 100 each benefit period (up $4 from 2009)

 Part B deductible:

$155 per year (you pay 20% of the Medicare approved amount for services after you meet the $155 deductible. (up $5 from 2009)

Part B Monthly premium rates for 2010 

Resources:

Medicare premiums and coinsuance rates Q&A from Medicare

Information about Medicare health plans (Medicare part D, Medicare Advantage and Medicare Supplement at http://www.laihealth.com

Your state may be giving you a good reason to buy long-term care insurance.  It is called the “partnership program for long-term care.”  A confusing name, but it can be a great benefit.  It’s like having an extra safety net for your long-term care costs.  Find out more about at the Own Your Future long-term care site.  

The specifics differ by state – and about 30 states have approved these plans– and here’s generally how it works.

You purchase a long-term care insurance policy that meets the state and Federal requirements.  If you use up the benefits of your long-term care insurance policy and still need care, you may qualify for Medicaid benefits.  And, you won’t have to spend your savings down to the poverty level (usually $2000) to qualify.  The amount of assets you can protect is usually based on the dollar amount of long-term care coverage you purchased.

 It can be a great way to protect your family’s financial nest egg.  A specialist in long-term care insurance   can tell you if the plan is available in your state.  And, if it is, exactly how it works and whether it is right for you.

If you are looking at a long-term care insurance plan offered through your employer, it  may not include partnership plans.  So make sure you ask and if it is important to you , it may be a reason to purchase an individual policy rather than a group policy.

As the end of the year rolls around, a reminder that many states offer a tax credit or tax deduction for payment of long-term care insurance premiums. If you apply soon, you may still be able to get approved for this tax year.  You may also be eligible for Federal tax benefits. Check with your tax advisor.

Airfares are going up for the holidays.  So if you are planning to travel better get those reservations made soon.  If you see a price that looks good, book it.  With fewer planes in the air, seats will be more limited than during past holiday seasons.  When you compare prices, make sure you add up all the extras – checking a bag, a reserved seat, food on the plane etc.

 If you’re a fan of Elerhostel trips start looking for them under the new name Exploritas.  The group announced a new name and a new policy on age – lifting restrictions and including anyone over the age of 21.  The organization says they are not going after young adults, but are rather opening up the possibility for more families and friends of different generations to travel together.  “ Elderhostel has been, and Exploritas will continue to be, a program created for and attractive to older, primarily retired adults,” says President James Moses.  See what you think at Exploritas.  

 Mother-in-law Day is October 25 (really!) and the travel industry has responded with special travel packages.  This USA Today article lists three packages.

It’s official.  There won’t be a cost of living adjustment for Social Security beneficiaries in 2010.  But there is support for one-time $250 payment to each recipient in 2010.  President Obama announced his support for the $250 payment yesterday and Congress is expected to take up the measure soon. 

The COLA is tied to consumer prices which were down last year.  In 2008, Social Security beneficiaries received a 5.5% COLA – the largest  increase since 1982, based largely on increases in consumer energy costs. More about 2010 Social Security changes here.  

For those who are still working, there will be no increase in the maximum amount of earnings subject to the Social Security tax.

 The earnings test for those workers who are younger than “full” retirement age also remains at 2009 level of $14,160. 

No word yet from Medicare on Part B premiums. Consumers should have received notice from their insurance company about their Medicare Part D Prescription Drug premium rates and Medicare Part C (Medicare Advantage) rates for 2010.

 If you are thinking about changing Part D or Part C plans for 2010, now is the time to start shopping and comparing plans.  Generally, applications can be taken beginning Nov. 15.

Resources:

Associated Press article