What are the Scariest Statistics for Retirement?

Think Advisor’s recent article entitled “11 Scariest Retirement Statistics: 2020” says that there is a lack of preparation, savings difficulty and general uncertainty that American retirees are facing. Here are those scary stats:

Just a quarter of Americans are on a trajectory to maintain their lifestyles in retirement. The other 75% will need to work longer, move to lower-cost housing and cut spending to maintain their standard of living, largely due to the coronavirus downturn.
The Social Security trust funds would be empty by 2023, without the payroll tax. While President Trump let employers temporarily defer the employee portion of payroll taxes, he said the deferred taxes could later be forgiven, or the cut made permanent. When he signed the order, he vowed to “terminate the tax,” if reelected. Republican lawmakers subsequently debuted a plan to fund any shortfalls from the Treasury.
Social Security benefits will be decreased by 21% if the trust fund runs out. Congress will have to intercede, or it could happen 10 years from now, if not sooner.
Those born in 1960 will have a big problem because of the complicated formula the Social Security Administration uses to calculate benefits. Pre-retirees born in 1960 will see a nearly 15% cut to their lifetime benefits from Social Security when it’s time to collect. If the pandemic suppresses the economy into 2022, those cuts will impact more pre-retirees. The impact to their Social Security benefits will also be permanent.
The 2021 Social Security cost of living adjustment, or COLA, will be just 1.3%. Retirees should note that rising health care costs and a potential 6% increase in Medicare Part B premiums may absorb that benefit increase.
More than 50% of Americans think the economy is worse now than in 2008, with 51% of Americans seeing the COVID slowdown as worse than the 2008 recession. A survey from Edelman Financial Engines also found that 26% had withdrawn money from retirement or savings for living expenses.
About 60% of retirement savers have fallen behind, according to a TIAA study. Among these, 30% said it was directly due to the pandemic.
Internet searches for “move out of the U.S.” have increased 16 times. International Living magazine says it had seen the jump in search traffic around the phrase since May. A total of 20% of respondents in a survey it conducted also said they wanted to move due to the pandemic. However, just 45% cited a desire to save money.
Approximately 42% of investors sold stock, and most of them (88%) of them regretted it. In response to the drop in stocks in mid-March last year, 42% of investors in a survey by MagnifyMoney sold at least one stock and 24% sold all their holdings. About 69% of those who sold stock at the start of the pandemic greatly regretted it, and 19% said they were somewhat regretful.
Roughly 80% of older Americans don’t understand retirement planning and don’t know the basics of how to successfully plan for a financially secure retirement, according to a study by The American College of Financial Services. The survey also found only 30% of respondents had a plan in place to fund long-term care needs, and just one in four actually had long-term care insurance.
About 3 million workers may have been driven into early retirement due to the pandemic. From March to August of 2020, 2.8 million older workers might have been pushed out of their jobs prematurely, with economic turmoil and poor health making it hard for them to resume their careers elsewhere, according to by the Schwartz Center for Economic Policy Analysis at the New School. The report found that 38% of unemployed older adults stopped looking for work and left the workforce, and an additional 1.1 million were expected to do likewise.

Reference: Think Advisor (Oct. 30, 2020) “11 Scariest Retirement Statistics: 2020”

Underlying Conditions Most Dangerous for COVID-19?

AARP’s recent article “Three Most Dangerous Underlying Conditions for COVID-19” reports that it is well-established that risk increases with age. The CDC lists nearly two dozen health conditions that could put you at higher risk of becoming seriously ill or dying of COVID-19. AARP did some research with doctors, who said three conditions worried them the most: diabetes, high blood pressure/underlying heart disease and obesity.

This corresponds with the results of one of the largest studies so far on COVID-19 mortality, published in the journal Clinical Infectious Diseases in December 2020. It looked at data from nearly 67,000 hospitalized coronavirus patients and found that these health conditions are associated with a higher risk of death:

Obesity,
Diabetes (with complications such as organ damage), and
High blood pressure (with complications, such as heart damage or kidney disease).

Each is an inflammatory disease that is prevalent among American adults, and experts say they are closely linked.

Obesity is a risk factor for diabetes and high blood pressure, and diabetes can contribute to high blood pressure. Moreover, diabetes and high blood pressure both can trigger kidney disease and lung disease—two other conditions that make COVID-19 riskier, says the CDC.

Some of the other dangerous conditions mentioned by the physicians include dementia, chronic kidney disease and chronic obstructive pulmonary disease (COPD). Immunocompromised patients, those who smoke and those with organ transplants also are a concern.

Lets’ look at those three health conditions that are associated with a higher risk of death:

High-risk condition: Obesity. Obese people diagnosed with COVID-19 are more than twice as likely to be hospitalized and about 50% more apt to die compared to patients who are a healthy weight. If you test positive for the coronavirus, ask your doctor if you are a good candidate for monoclonal antibodies. It is a life-saving treatment that can reduce hospitalizations among high-risk patients by as much as 70%.

Obesity is frequently associated with other health problems, but doctors note how hard COVID-19 impacts even those obese patients who have no other underlying conditions.

Obesity can make it difficult for a person’s lungs to expand, impairing breathing and oxygenation. Obesity is also believed to increase your risk of blood clots.

High-risk condition: High blood pressure. Researchers reviewed 22 studies from eight countries in 2020 and found that high blood pressure was present in 42% of hospitalized COVID-19 patients. That makes it the most prevalent health condition by a big margin. Even more surprising is the fact that those patients had twice the risk of death compared with patients without high blood pressure, said Vikramaditya Samala Venkata, M.D., one of the study’s authors and a hospital medicine physician at Cheshire Medical Center in Keene, N.H.

However, the Clinical Infectious Diseases study on COVID-19 mortality found that hypertension on its own raised the death rate only for those under age 40. For those age 40+, mortality risk increased only if their high blood pressure had caused a complication, such as heart damage or chronic kidney disease.

Experts think that the coronavirus damages the cells that line blood vessels, causing clots and making it more difficult for them to carry oxygen. Therefore, it is important to keep your blood pressure under control. Studies show that patients with unregulated high blood pressure are at greater risk from COVID-19 compared with patients who take medication to control it.

High-risk condition: Diabetes. Research of the medical records of 61 million people in England published in The Lancet Diabetes & Endocrinology found that the risk of dying from COVID-19 was almost three times higher for people with Type 1 diabetes and almost twice as high for people with Type 2 diabetes, compared with those with neither. High blood sugar weakens the immune systems, which makes it harder for the body to fight off infections. Diabetes puts you at risk for both cardiovascular complications and infectious complications. Both of those are common with COVID.

So, watch your blood sugar levels because patients with well-controlled diabetes have a COVID-19 death rate of about 1%, according to a study published in Cell Metabolism. What about those with poorly controlled disease? Their rate is closer to 11%.

Reference: AARP (Feb. 3, 2021) “Three Most Dangerous Underlying Conditions for COVID-19”

Should I Worry about Medicaid Estate Recovery?

What is It? The Medicaid Estate Recovery Program (MERP) may be used to recoup costs paid toward long-term care. It’s designed to help make the program affordable for the government, but it can financially affect the beneficiaries of Medicaid recipients.

AOL’s article entitled “What Is Medicaid Estate Recovery?” explains that’s where Medicaid can help fill the void. Medicaid can assist with paying the costs of long-term care for aging seniors. It can be used when someone doesn’t have long-term care insurance coverage, or they don’t have the assets to pay for long-term care out of pocket. It can also be used to pay for nursing home care, if you’ve taken steps to protect assets using a trust or other estate planning tools.

However, the benefits you (or an aging parent) receive from Medicaid are not necessarily free. The Medicaid Recovery Program lets Medicaid recoup or get back the money spent on behalf of an aging senior to cover long-term care costs. Federal law requires states to attempt to seek reimbursement from a Medicaid beneficiary’s estate when they die.

How It Works. The Medicaid Estate Recovery Program lets Medicaid seek recompense for a variety of costs, including:

Nursing home-related expenses or other long-term care facility stays
Home- and community-based services
Medical services from a hospital (when the recipient is a long-term care patient); and
Prescription drug services for long-term care recipients.

If you (or an aging parent) die after receiving long-term care or other benefits through Medicaid, the recovery program allows Medicaid to pursue any eligible assets held by your estate. Exactly what that includes depends on your state, but generally any assets that would be subject to the probate process after you pass away are fair game.

That may include bank accounts you own, your home or other real estate and vehicles or other real property. Each state makes its own rules. Medicaid can’t take someone’s home or assets before they pass away, but it’s possible for a lien to be placed upon the property.

What Medicaid Estate Recovery Means for Heirs. The biggest thing about the Medicaid estate recovery for heirs of Medicaid recipients is that they might inherit a reduced estate. Medicaid estate recovery rules also exclude you personally from paying for your parents’ long-term care costs. However, filial responsibility laws don’t. It is rare, but the laws of some states let healthcare providers sue the children of long-term care recipients to recover nursing care costs.

How to Avoid Medicaid Estate Recovery. Strategic planning with the help of an elder law attorney can help you or your family avoid financial impacts from Medicaid estate recovery. You should think about buying long-term care insurance for yourself. A long-term care insurance policy can pay for the costs of nursing home care, so you can avoid the need for Medicaid altogether.

Another way to avoid Medicaid estate recovery is to remove assets from the probate process. For example, married couples can do this by making certain that assets are jointly owned with right of survivorship or using assets to purchase an annuity to transfer benefits to the surviving spouse when the other spouse passes away. You should know which assets are and are not subject to probate in your state and whether your state allows for an expanded definition of recoverable assets for Medicaid. Speak with an experienced elder law lawyer for assistance.

Medicaid estate recovery may not be something you have to concern yourself with, if your aging parents leave little or no assets in their estate. However, you should still be aware of it, if you expect to inherit assets from your parents when they die.

Reference: AOL (Feb. 5, 2021) “What Is Medicaid Estate Recovery?”

Underlying Conditions Most Dangerous for COVID-19?

Obesity,
Diabetes (with complications such as organ damage), and
High blood pressure (with complications, such as heart damage or kidney disease).

Each is an inflammatory disease that is prevalent among American adults, and experts say they are closely linked.

Lets’ look at those three health conditions that are associated with a higher risk of death:

Obesity is frequently associated with other health problems, but doctors note how hard COVID-19 impacts even those obese patients who have no other underlying conditions.

Obesity can make it difficult for a person’s lungs to expand, impairing breathing and oxygenation. Obesity is also believed to increase your risk of blood clots.

Reference: AARP (Feb. 3, 2021) “Three Most Dangerous Underlying Conditions for COVID-19”

Do You Know These Social Security Surprises?

If you don’t understand how Social Security works, you may get caught off guard by some of Social Security’s rules and nuances, says Motley Fool’s recent article entitled “Don’t Let These 3 Social Security Surprises Ruin Your Retirement.” Here are some things to keep in mind:

Taxes on benefits. Many assume that Social Security is not taxed, but it may be, depending on your provisional income. Your provisional income is calculated by taking your non-Social Security income plus 50% of your annual benefit payments. If that total is between $25,000 and $34,000 for a single or between $32,000 and $44,000 for a married couple filing jointly, you could be taxed on up to 50% of your benefits. Moreover, if your provisional income is more than $34,000 as a single tax filer, or $44,000 as a joint filer, you may be subject to taxes on up to 85% of your benefits. Typically, if Social Security is your sole retirement income source, you will avoid having your benefits taxed at the federal level. However, there are 13 states that tax Social Security.
Withheld benefits when you still get a paycheck. When you hit your full retirement age (FRA), which is when you are entitled to collect your monthly Social Security benefit in full, you can earn as much money as you would like from a job, without having that income impact your benefit payments. However, if you work and collect benefits at the same time before reaching FRA, you may have some of your benefits withheld if you exceed the annual earnings test limit.

You can earn up to $18,960 in 2021 without losing any benefits. Above that threshold, you will have $1 in Social Security withheld for every $2 you earn. If you will be attaining FRA this year, the earnings test limit is higher, $50,520, and after that you will have $1 in Social Security withheld for every $3 you earn.

These withheld benefits are not lost permanently. They are added onto your monthly benefit once you reach FRA. However, claiming Social Security before FRA will also reduce your monthly benefit for life. Bear that in mind, if you are planning to continue working.

Ultra-low cost-of-living adjustments. Social Security benefits are subject to a cost-of-living adjustment (COLA), which is designed to help seniors keep up with inflation. However, in recent years, it has not. From 2002 to 2011, COLAs averaged 2.43%, but between 2012 and 2021, they averaged only 1.65%. As a result, many seniors on Social Security have had trouble paying their bills. COLAs are tied to fluctuations in the cost of goods and services, but this does not necessarily relate to seniors. Because of this, some lawmakers have been advocating for a better way of calculating them.

If you are planning to depend primarily on Social Security in retirement, be certain that you know the details of the program.

Reference: Motley Fool (Feb. 1, 2021) “Don’t Let These 3 Social Security Surprises Ruin Your Retirement”

How to Be an Effective Advocate for Elderly Parents

Family caregivers must also understand their loved one’s wishes for care and quality of life. They must also be sure those wishes are respected. Further, it means helping them manage financial and legal matters, and making sure they receive appropriate services and treatments when they need them.

AARP’s recent article entitled “How to Be an Effective Advocate for Aging Parents” says if the thought of being an advocate for others seems overwhelming, take it easy. You probably already have the skills you need to be effective. You may just need to develop and apply them in new ways. AARP gives us the five most important attributes.

Observation. Caregivers can be too busy or tired, to see small changes, but even slightest shifts in a person’s abilities, health, moods, safety needs, or wants may be a sign of a much more serious medical or mental health issue. You should also monitor the services your family member is getting. You can take notes on your observations about your loved one to track any changes over time.
Organization. It’s hard to keep track of every aspect of a caregiving plan, but as an advocate, you must manage your loved one’s caregiving team. This includes creating task lists and organizing the paperwork associated with health, legal, and financial matters. You’ll need to have easy access to all legal documents, like powers of attorney for finances and health care. If needed, you might take an organizing course or work with a professional organizer. There are also many caregiving apps. You should also, make digital copies of key documents, such as medication lists, medical history, powers of attorney and living wills, so you can access them from anywhere.
Communication. This may be the most important attribute. You need communication for building relationships with other caregivers, family members, attorneys and healthcare professionals. Be prepared for meetings with lawyers, medical professionals and other providers.
Probing. Caregivers need to gather information, so don’t be shy about it. Educate yourself about your loved one’s health conditions, finances and legal affairs. Create a list of questions for conversations with doctors and other professionals.
Tenacity. Facing a dysfunctional and frustrating health care system can be discouraging. You must be tenacious. Here are a few suggestions on how to do that:

Set clear goals and focus on the end result you want.
Keep company with positive and encouraging people.
Heed the advice of experienced caregivers’ stories, so you understand the triumphs and the challenges.
Be positive and be resilient.

Reference: AARP (Sep. 24, 2020) “How to Be an Effective Advocate for Aging Parents”

The Difference between Power of Attorney and Guardianship for Elderly Parents

The primary difference between guardianship and power of attorney is in the level of decision-making power, although there are many intricacies specific to each appointment, explains Presswire’s recent article entitled “Power of Attorney and Guardianship of an Elderly Parent.”

The interactions with adult protective services, the probate court, elder law attorneys and healthcare providers can create a huge task for an agent under a power of attorney or court-appointed guardian. Children acting as agents or guardians are surprised about the degree of interference by family members who disagree with decisions.

Doctors and healthcare providers don’t always recognize the decision-making power of an agent or guardian. Guardians or agents may find themselves fighting the healthcare system because of the difference between legal capacity and medical or clinical capacity.

A family caregiver accepts a legal appointment to provide or oversee care. An agent under power of attorney isn’t appointed to do what he or she wishes. The agent must fulfill the wishes of the principal. In addition, court-appointed guardians are required to deliver regular reports to the court detailing the activities they have completed for elderly parents. Both roles must work in the best interest of the parent.

Some popular misperceptions about power of attorney and guardianship of a parent include:

An agent under power of attorney can make decisions that go against the wishes of the principal
An agent can’t be removed or fired by the principal for abuse
Adult protective services assumes control of family matters and gives power to the government; and
Guardians have a responsibility to save money for care, so family members can receive an inheritance.

Those who have a financial interest in inheritance can be upset when an agent under a power of attorney or a court-appointed guardian is appointed. Agents and guardians must make sure of the proper care for an elderly parent. A potential inheritance may be totally spent over time on care.

In truth, the objective isn’t to conserve money for family inheritances, if saving money means that a parent’s care will be in jeopardy.

Adult protective services workers will also look into cases to make certain that vulnerable elderly persons are protected—including being protected from irresponsible family members. In addition, a family member serving as an agent or family court-appointed guardian can be removed, if actions are harmful.

Agents under a medical power of attorney and court-appointed guardians have a duty to go beyond normal efforts in caring for an elderly parent or adult. They must understand the aspects of the health conditions and daily needs of the parent, as well as learning advocacy and other skills to ensure that the care provided is appropriate.

Ask an experienced elder law attorney about your family’s situation and your need for power of attorney documents with a provision for guardianship.

Reference: Presswire (Jan. 14, 2021) “Power of Attorney and Guardianship of an Elderly Parent”

What are the Issues with COVID Vaccinations Sign-ups for Seniors?

With states across the U.S. providing the COVID-19 vaccine to people 65 and older, seniors are trying to determine how to make an appointment to receive their shots. Many government agencies ask people to make appointments online. However, website errors, overwhelmed phone lines and a collection of changing rules are frustrating seniors who are frequently less tech-savvy, may live farther from vaccination sites and are less likely to have Internet access—especially minority populations and the poor.

ABC News’ recent article entitled “Online sign-ups complicate vaccine rollout for older people” reports that almost 9.5 million seniors (16.5% of Americans 65 and older) lack internet access, according to U.S. Census Bureau data. Moreover, the access is worse for minority seniors, with more than 25% of Black people, about 21% of Hispanic people and over 28% of Native Americans age 65 and older have no way to get online. Compare that with 15.5% of white seniors.

In the San Francisco Bay Area, Dr. Rebecca Parish has been saddened by the bureaucratic red tape and continued calls for help from seniors. An 83-year-old patient called her in tears, unable to navigate the online appointment system at her local drugstore. After several of these types of calls, Dr. Parish took action. She contacted Contra Costa County and acquired 500 doses to vaccinate people at a middle school in Lafayette, California. She’s also working with nonprofits to identify seniors who don’t live in nursing homes and risk falling through the cracks. All her appointments have been taken, but she’ll begin adding more when more doses are available.

Many health officials have been trying to find other solutions to ease the confusion and help senior citizens sign up, as the Trump administration asked states to make the nation’s 57.6 million seniors eligible for the COVID-19 vaccine.

Some spots have discovered that simple ideas can work. For example, in Morgantown, West Virginia, county health officials used a large road construction sign to list the phone number for seniors to call to make an appointment. Some are looking at working with community groups or setting up mobile clinics for more remote populations.

Some medical systems, like UCHealth in Colorado, are trying to partner with community groups to get vaccines to underserved populations, like seniors. Local doctors are volunteering at a clinic hosted by a church that brings in the vaccine and helps build trust between health care workers and residents.

For now, UCHealth schedules appointments online, but a COVID-19 hotline is in the works because of the volume of calls from seniors. Howwever, even a Colorado health provider setting up vaccine clinics for underserved communities, Salud Family Health Centers, said their phone lines aren’t equipped to handle the number of calls they’re getting and encouraged people to go online.

Reference: ABC News (Jan. 15, 2021) “Online sign-ups complicate vaccine rollout for older people”

Can Mom Live in the Backyard?

When one Georgia senior thought about moving closer to her daughter in an Atlanta suburb, she realized she couldn’t afford to buy a home.

Therefore, her daughter researched building a cottage in her own backyard. This fall, they made a deposit on a Craftsman-style design by a local architect who will manage the project from permits to completion. The 429-square-foot home will have one bedroom and bathroom, a galley kitchen and living area and a covered porch.

Kiplinger’s recent article entitled “A Retirement Home Is a Tiny House in the Kids’ Backyard” reports that driven by an aging population and a scarcity of affordable housing, accessory dwelling units (ADUs) are a new trend in multigenerational living. These units are also known as in-law suites, garage apartments, carriage houses, casitas and “granny flats.” Freddie Mac found the share of for-sale listings with an ADU rose 8.6% year-over-year since 2009.

Homes such as these can be created by finishing a basement or attic, converting a garage, reconfiguring unused space, adding on, custom-building a detached unit, or installing a prefab. This unit can also be a source of rental income. A homeowner could also use it to house a parent, child or caregiver; downsize into it themselves to rent the main house; or make it into an office or guest quarters.

Converting existing space is less expensive than building a detached unit. A prefab ADU is cheaper and quicker to install than one built on site. However, a custom project allows you to include aging-in-place features, like a step-free entry, wider doorways and a handicapped accessible shower.

An ADU also allows seniors some privacy, so they’ll feel at home, rather than a visitor or intruder. You might add a private entrance and soundproofing to the shared walls of an in-law suite. Sitting areas indoors and outdoors will let you or a parent enjoy solitude, entertain friends without asking for permission and avoid feeling locked in.

Prior to using your nest egg to create an ADU on a child’s property, think about the way in which you’ll pay for the care you will inevitably need someday. You can’t sell the ADU to raise funds and renting it out after you’ve moved elsewhere is unlikely to cover the cost of your care.

In addition, note that if a parent gives a child money to build an ADU within the look-back period when applying for Medicaid, they may be penalized with delayed coverage.

Reference: Kiplinger (Dec. 31, 2020) “A Retirement Home Is a Tiny House in the Kids’ Backyard”

States with Most Affordable Long-Term Care?

Seven in 10 people 65 and older will require some type of long-term care during their lifetime. This expense will vary based on the patient’s required level of care, care setting and geographic location, says Think Advisor’s recent article entitled “15 Cheapest States for Long-Term Care: 2020.”

A recent study by Genworth found that the cost for facility and in-home care services increased on average from 1.9% to 3.8% per year from 2004 to 2020. That amounts to $797 annually for home care and as much as $2,542 annually for a private room in a nursing home.

At the current rate, some care costs are more than the 1.8% U.S. inflation rate, Genworth said.

These findings were taken from 14,326 surveys completed this summer by long-term care providers at nursing homes, assisted living facilities, adult day health facilities and home care providers. The survey encompassed 435 regions based on the 384 U.S. Metropolitan Statistical Areas, as defined by the U.S. Office of Management and Budget.

In a follow-up study, Genworth also found that these factors are contributing to rate increases for long-term care:

Labor shortages
Personal protective equipment (PPE) costs
Regulatory changes, such as updated CDC guidelines
Employee recruitment and retention issues
Wages demands; and
Supply and demand.

Here are the 15 cheapest states for long-term care, according to Genworth with their average annual cost:

15. Utah: $59,704

14. Kansas: $57,766

13. Iowa: $57,735

12. Kentucky: $57,540

11. South Carolina: $57,413

10. Tennessee: $56,664

9. North Carolina: $56,512

8. Georgia: $53,708

7. Mississippi: $52,461

6. Arkansas: $50,835

5. Oklahoma: $50,641

4. Texas: $48,987

3. Missouri: $48,753

2. Alabama: $48,240

1. Louisiana: $44,811

Reference: Think Advisor (Dec. 14, 2020) “15 Cheapest States for Long-Term Care: 2020”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

Underlying Conditions Most Dangerous for COVID-19?

Should I Worry about Medicaid Estate Recovery?

Underlying Conditions Most Dangerous for COVID-19?

How to Be an Effective Advocate for Elderly Parents

The Difference between Power of Attorney and Guardianship for Elderly Parents

What are the Issues with COVID Vaccinations Sign-ups for Seniors?

Can Mom Live in the Backyard?

States with Most Affordable Long-Term Care?

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Underlying Conditions Most Dangerous for COVID-19?

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Underlying Conditions Most Dangerous for COVID-19?

How to Be an Effective Advocate for Elderly Parents

The Difference between Power of Attorney and Guardianship for Elderly Parents

What are the Issues with COVID Vaccinations Sign-ups for Seniors?

Can Mom Live in the Backyard?

States with Most Affordable Long-Term Care?

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