Social Security Scammers Embracing Artificial Intelligence

Seniors now need to be extra careful about Social Security scams since fraudsters have embraced AI (Artificial Intelligence) to manipulate people into revealing secure information, says a recent article from U.S. News & World Report, “AI and the Risks of Social Security Fraud.” The schemes are sophisticated and appear entirely legitimate, making them harder to discern from real messages from the Social Security Administration.

The Office of the Inspector General recently launched a task force to investigate the use of AI and deter AI-related Social Security scams. The OIG recognizes the risk of criminals using AI to make their schemes easier and faster to execute and the deceptions more credible and realistic.

You’ll want to know about AI risks if you receive Social Security benefits. Here are some guidelines to keep both your identity and finances safe.

Criminals commonly use robocalls or chatbots. The messages sound as if they come from legitimate government representatives and trick seniors into disclosing personal information or even making fraudulent payments using voice synthesis and natural language processing. This can also happen on a website, with an AI-generated video of the U.S. president or an official with the Social Security Administration announcing a new Social Security benefit and encouraging retirees to sign up by following a link on the video. The link takes the user to a fraudulent website, where they are asked to provide essential information, including their Social Security number and other details. Once the information is provided, thieves can re-route the monthly benefit to an unauthorized account.

Be wary if you receive an email from a source you don’t recognize. Don’t respond to text messages from people or organizations you don’t know. If you receive a suspicious phone call, hang up. If someone claims to be calling from Social Security, hang up, call the local Social Security office yourself, and explain what happened.

If you haven’t already, set up a my Social Security account online at ssa.gov. That’s where you’ll indicate the bank account to receive your benefit, and you can tell SSA not to change it unless you appear in person at the local SSA office.

The SSA doesn’t initiate contact with recipients by email, text, or phone. Anyone saying they are from the SSA using these methods is a scammer. Even if your phone displays the call is coming from the SSA, know that it’s very easy for criminals to manipulate caller ID to make the call appear to come from whomever and whatever number they want.

Thieves now use digital technology to trick seniors into revealing personal information. As technology changes, so do the means of stealing. Stay current on common scams and protect your retirement benefits and finances from AI-driven fraud.

Reference: U.S. News & World Report (Sep. 29, 2023) “AI and the Risks of Social Security Fraud”

How Can I Recession-Proof My Retirement?

Go Banking Rates’ recent article, “3 Ways to Recession Proof Your Retirement,” says there are a few moves you can make now while things are volatile and can pay off significantly down the road. Here are some of them:

Have A Financial Pro Look Over Your Plan. It’s wise to review your long-term financial plan with an expert regularly. You may be shocked by how much you can benefit from just one meeting. Even if you’ve already created a plan with the help of a professional, you may find that your plan needs adjusting, especially in an environment where economic factors are changing.

Protect Your Portfolio With Precious Metals. Precious metals frequently outperform other investments in a volatile market, and their value tends to rise with inflation. That makes them an effective hedge during uncertain economic times. You can open a gold or silver IRA, and funds can be rolled over from existing retirement accounts. You can also buy gold and silver directly.

Generate Passive Income and Receive Regular Payments. One of the most common ways to generate passive income is to own rental property, which usually requires a large upfront investment. One way to address this is with a company called Arrived. This company gives people access to the rental home market. For an initial investment of as little as $100, you can participate in their platform and buy shares of pre-vetted rental properties. All the work is done for you, and you’ll benefit from property appreciation as the value of the home appreciates over time.

You’ve likely been saving for retirement for a long time. Now is not the time to change that big-picture thinking. Keep up the safe and steady progress while also exploring ways to make the most of your savings.

Some of the best strategies along these lines are hedging your investments with something like gold or silver and building your passive income without taking on too much risk.

Whether or not you participate in those strategies, an experienced financial advisor can assess your circumstances and set the best path forward.

Reference: Go Banking Rates (Aug. 1, 2023) “3 Ways to Recession Proof Your Retirement”

What Is Elder Law?

The U.S. population is aging, and baby boomers, the largest generation in history, have entered retirement age in recent years. Yahoo Finance’s recent article, “Elder Law Is More Important Than Ever. Why? Baby Boomers,” says that medical care has extended life and physical ability and grown more sophisticated.

“Questions surrounding mental competence, duration of care, and nature of treatments have become increasingly difficult to answer. The result has been a medical system that often implicates legal questions of individual autonomy, with some of the highest stakes that the courts recognize,” the article explains.

Estate Planning. Trusts and estates is the area of the law that governs how to manage your assets after death. You create trusts to hold, oversee and distribute assets according to your instructions. While they can be created when you’re alive, most establish trusts for handling their property after they’ve passed away.

Disability and Conservatorship. As you get older, your body or mind may fail. This is known as incapacitation. It is generally defined legally as when someone is either physically unable to express their wishes (such as being unconscious) or mentally unable to understand the nature and quality of their actions. If this occurs, you need someone to assist with activities of daily living. Declaring an individual mentally unfit or incapacitated is a complicated legal and medical issue.

Power of Attorney. Most seniors use power of attorney to plan for two main situations: (i) a medical power of attorney for family members to assume your care in the event you’re physically incapacitated for some reason, and (ii) a general power of attorney allows you plan for someone to manage your affairs, if you’re judged mentally incapacitated.

Medicare. Every American over 65 will most likely deal with Medicare, which provides no-cost or low-cost healthcare for those 65+. Almost all seniors enroll to receive at least some medical benefits under this program. Health care becomes an increasingly important part of your financial and personal life as you age. It’s important for the elderly to know their rights and responsibilities regarding healthcare.

Social Security. This is the retirement benefits program to help ensure that U.S. seniors have money on which to live. For senior citizens, understanding how these programs work is often essential. This is particularly true given the increased footprint that medical care plays in the lives of senior citizens and the complexities brought on by increasingly mobile seniors.

Reference: Yahoo Finance (Sep. 13, 2023) “Elder Law Is More Important Than Ever. Why? Baby Boomers”

What Should I Know about Falls?

Over 25% of adults age 65 or older fall each year, and thousands of older adults break a bone, according to Very Well Health’s recent article, “Managing Pain as You Age.” Falls and fractures are common concerns for older adults, especially women with osteoarthritis. About a third of women over age 50 will break a bone related to osteoarthritis.

In addition to injury, this is a major issue for older adults, as people age 70+ have an increased risk of death after a fall. In one study, 4.5% of people 70 or older died after a ground-level fall compared to 1.5% of a younger population. Falls, if not deadly, also affect long-term mobility, overall health, and independence. In the same study, people 70 and older had longer hospital and intensive care unit (ICU) stays than their younger counterparts. Only 22% could function independently once released vs. 41% of the younger adults who had fallen.

However, there are ways to reduce the risks of serious, long-term effects from a fall. After a fall, staying calm and preventing further injury is essential. These include:

Relaxing by taking deep, calming breaths;
Staying still where you land and giving yourself time to recover from any shock the fall may have caused;
Assessing your condition and checking for possible injuries before moving; and
Calling 911 or ask someone nearby to help if there are any injuries.

If there are no injuries, you can roll to one side, rest, move to your hands and knees and transition to a chair. Even if you can get up on your own after a fall, seeing a healthcare provider is important. They can identify possible unnoticed injuries and determine health concerns that may have caused the fall.

If you have a fracture from a fall, treating it depends on the location of the break, the severity and other factors related to the individual and their injury. For example, a hip fracture is a common injury in older adults that may or may not require surgery. Traction is sometimes used to pull different parts of the body to help stretch the area around the broken bone for healing. With most fractures, it’s also important to use a splint or cast to keep the area from moving.

Reference: Very Well Health (Oct. 25, 2022) “Managing Pain as You Age”

How Much Does Medicare Pay for Nursing Home Stays?

How Much Does Medicare Pay for Nursing Home Stays?

“”

According to the AARP, the median monthly cost to live in a nursing home is $7,908 for a semi-private room. The options for paying for such care are limited. Fortune’s recent article, “Does Medicare pay for nursing home care? An expert helps make sense of the rules,” reminds us that there’s limited nursing home coverage under Medicare.

Medicare won’t pay for nursing home care but for certain stays under specific conditions. The program will pay for a nursing home stay, if it’s determined that the patient needs skilled nursing services, like help recovering after a medical issue like surgery or a stroke, but for not more than 100 days. For the first 20 days, Medicare will cover 100% of the cost. From day 21 to 100, the patient pays a $200 co-payment in 2023, and Medicare pays the balance.

To qualify, the individual would need at least a three-day stay as a hospital inpatient before the agency would approve payment for nursing home care for rehabilitation or skilled nursing care. Getting three days as an inpatient in a hospital is a challenge as hospitals are discharging patients quickly, and most patients aren’t staying for three nights. Hospitals also use what’s called observation status, where a patient is technically not admitted to the hospital. This affects beneficiaries’ ability to access Medicare coverage for rehabilitation or skilled nursing care in a nursing home. Observation status gives physicians 24-48 hours to assess if a patient should be admitted for inpatient care or discharged. This status can be costly for Medicare patients as the agency classifies it as outpatient care. As a result, beneficiaries may have to pay their share of that cost as a deductible, coinsurance, or copayment. Some patients also remain in observation status longer than the typical 24 to 48 hours.

To address this, Medicare has implemented the two-midnight rule. This rule stipulates that when a physician expects a patient to require hospital care for at least two midnights, they should admit them as an inpatient. However, two midnights spent under observation don’t count toward the three-day inpatient stay patients need to qualify for coverage in a nursing home or SNF. It’s not just a matter of the time spent in the hospital; it’s how the patient is classified.

The patient must be formally admitted as an inpatient to be classified as an inpatient.

Because each state regulates Medicaid eligibility differently, ask an experienced elder law attorney to guide you through the process and to help you find the best long-term care option.

Reference: Fortune (Aug. 29, 2023) “Does Medicare pay for nursing home care? An expert helps make sense of the rules”

How Do I Make a Care Plan for Mom?

Medicare typically doesn’t pay for basic assistance, and families often don’t try to determine how to provide this care until there is a health crisis, which can lead to unnecessary stress, conflicts and escalating costs.

Nerd Wallet’s recent article, “Create a Care Plan for Older Parents (or Yourself),” says that making a care plan well in advance lets families organize, locate appropriate resources and determine ways to pay for care before a crisis hits.

A care plan is thinking through the logistics of what you’ll need as you age, so that you are prepared when the poop hits the fan with aging. A way to cope is to plan for temporary rather than permanent disability. Ask what kind of help you or your loved one might need after a hip or knee replacement. How well is the home set up for recovery? Who would help with household tasks? Contemplating a two- or three-month disability with an eventual return to health is less daunting but involves much of the same planning as a more lasting decline.

Many seniors would like to stay in their current homes as they age, something called “aging in place.” That typically means relying on family members for care, using paid workers, or both. However, if family members will be tapped, discuss the logistics, including whether and how much they will be paid. If home health aides will be hired, consider who will supervise the process.

Look at any savings that can be tapped and whether the senior may qualify for government help, such as veterans benefits, Medicaid, or state programs. Families may want to consult an elder law attorney for personalized advice.

It is important to look at the current home as “aging friendly.” An occupational therapist can suggest adaptations allowing the older person to remain in the home if they’re disabled. The sooner you get this evaluation, the more time you’ll have to prepare. Even if the home supports aging in place, the neighborhood might not. Consider how the older person will socialize, get groceries, and make it to health appointments if they can no longer drive.

An independent living or senior living facility could provide more amenities. However, these typically don’t provide long-term care. Therefore, see if the senior is okay with moving again later or whether they should begin with an assisted living or continuing care facility that can provide more help.

Once you have a plan, capture the details and share it with family members or others who may be involved. Revisit the document periodically as circumstances change. Aging planning is an ongoing process.

Reference: Nerd Wallet (Aug. 24, 2023) “Create a Care Plan for Older Parents (or Yourself)”

Should I Enroll in Medicare Before I Retire?

A recent survey found that a third of those nearing retirement age (62-64) who plan to keep working past 65 don’t understand they can sign up for what is often more affordable Medicare coverage, even while they’re still employed.

Kiplinger’s recent article, “Yes, You Can Sign Up for Medicare While You’re Still Working,” says that with retirement further away for many, some people must get some help understanding their options. The article answers some common questions concerning retirement postponement and Medicare coverage, including common misperceptions.

Your retirement decision is personal and dependent on your situation. Access to health coverage is one of the primary reasons that the average age at which people retire is going up. In a survey of more than 1,000 American older workers, 31% of those with employer insurance say health care is their primary reason for working, and 53% say it’s one factor. Whether you are continuing to work based on career fulfillment or health coverage, having a plan in place for handling your Medicare decisions before you turn 65 can streamline the transition off of your employer-sponsored health insurance.

Most working seniors don’t have to enroll in Medicare. It’s not required that all seniors make the jump as soon as they hit 65. However, there are some situations where it’s mandatory. It is important to be aware of these exceptions to ensure that there are no gaps in your coverage. If you delay your signup, you might end up paying for it: your small company’s group plan can deny your claims if they find you’re eligible for Medicare. There are also financial penalties for late enrollment, so if you work for a small company, you must be ready to make the leap to Medicare coverage, regardless of your retirement plans.

Employees approaching retirement and those who have reached retirement age say they’re mostly happy with their employer health benefit packages. However, hesitation and misconceptions about Medicare prevent workers from shopping for better plans. If Original Medicare is unaccompanied by a prescription drug plan (Part D) or a Medigap supplement, it may be less than your current employer-sponsored level coverage. Most individuals who sign up for Medicare don’t sign up for Original Medicare alone. You should couple your Original Medicare plan with a prescription drug and Medigap plan. Each Medigap plan (plans A to N) offers a different level of coverage that demands careful consideration in terms of weighing which plan best fits your needs.

Another option, aside from Original Medicare plus a Medigap plan, would be to go with a Medicare Advantage plan (Part C). Medicare Advantage plans are usually less expensive, and some plans have no monthly premium.

Reference: Kiplinger (Oct. 11, 2022) “Yes, You Can Sign Up for Medicare While You’re Still Working”

How to Plan Ahead in Case a Loved One Has Dementia

Have the conversation about dementia, says The Tribune-Democrat’s recent article entitled, “Dealing with dementia | Planning ahead: ‘Have the conversation.’” Next, get the legal documents and define the future care. Note that the documents’ provisions are ineffective, until the person cannot make their own decisions.

Having the documents in place can help prevent the person from being placed in guardianship by the court. If they have no advance healthcare directives, the family or caregivers must apply to the court for guardianship if incapacity can be proven. When granted, the court appoints a decision-maker, taking away the individual’s ability to make decisions – either in whole or in part. This court oversight continues throughout the individual’s life.

Advanced directives, like a living will, health care power of attorney and financial power of attorney, allow those facing dementia to make their own decisions while they still have the capacity. Family members and potential caregivers should encourage their loved ones to act and get these important documents in place.

An advanced health care directive can include both a living will, which makes known what end-of-life care the individual wants, and a health care power of attorney, which assigns an agent to carry out the individual’s wishes when making health care decisions. The document states goals and values on which to base the decisions. It doesn’t take away the individual’s rights to make those decisions and can cover a broad range of medical decisions, or it can be narrow and limit the types of decisions.

The documents can be revoked anytime but don’t expire until the individual dies. The agents also don’t become personally responsible for the individuals’ debts. Careful consideration should be used in choosing the agent, which can be a family member or other trusted person. The agent should be capable and have a good relationship with the person.

A financial power of attorney is similar. It names an agent and doesn’t take away the individual’s decision-making ability. It ends with death and can be revised anytime. It can include handling money, checks, deposits, property sales and pursuing legal action. However, changing beneficiaries of insurance or making gifts requires specific instructions.

The agent selected should be a person who understands the individual’s feelings and point-of-view and is trusted to respect the individual’s wishes. They should be adept at handling their finances, as financial management becomes very important regarding where you will stay.

Reference: The Tribune-Democrat (July 29, 2023) “Dealing with dementia | Planning ahead: ‘Have the conversation’”

How to Speak With Mom and Dad About Estate Planning

The estate planning process typically includes making a list of your assets and debts, determining the beneficiaries of your property, and establishing a power of attorney (a person who can act on your behalf to handle your finances, healthcare, or other needs, if you become incapacitated).

The Milwaukee Journal-Sentinel’s recent article, “Five tips for having a conversation with your loved one about estate planning,” gives us some ideas to make the conversation easier.

Learn the laws. Know your state’s probate laws when you talk to family members about estate planning. Some states’ laws say that if a family member dies intestate (without a will), their assets — if they have any — go directly to their children. However, this can present issues if there are no children or multiple children and no one, such as a trustee or executor, to carry out the dead loved one’s wishes.
Start early. The earlier these discussions happen, the better. In many cases, people wait until they’re already sick and having problems before they even begin to think about estate planning. Involve loved ones early, so they feel invested in seeing it through and that planning will help ensure that their death does not burden the ones they love.
Keep discussions empathetic and brief. Family visits or holiday gatherings are good times to discuss estate planning. It’s important to remind relatives that planning protects their wishes. Ask open-ended questions, such as, “Let’s talk about your legacy or how you would like to give back to your family or your community.”
Remind your loved one they’re in control — and estate planning helps them stay that way. Leaving your loved one out of the planning process can result in their wishes being misinterpreted or not represented.

Note that the person creating the will should consult an experienced estate planning attorney.

Reference: Milwaukee Journal-Sentinel (April 25, 2023) “Five tips for having a conversation with your loved one about estate planning”

Make Power of Attorney Part of Your Estate Plan

At some point, it becomes necessary for aging people to hand over control of their finances. One aspect of estate planning is naming an agent or fiduciary who can take control of finances if you become incapacitated or experience significant cognitive decline, explains the article “Don’t Forget to Build This Into Your Retirement and Estate Plans” from yahoo! finance.

A financial agent makes financial decisions with you or on your behalf. The exact nature depends upon your preference. However, most agents act as co-signatories or solely control your financial accounts. A co-signatory means you and the agent must jointly authorize a financial transaction. In contrast, a sole controller means only the agent can authorize financial transactions to and from your accounts.

This is a type of Power of Attorney in which you authorize another person to act on your behalf in a legal capacity. The purpose is to protect your finances against cognitive decline often accompanying aging. When it’s unnoticed, the individual can continue making financial decisions, and they may not always be correct. Cognitive decline is why seniors are so vulnerable to financial exploitation and fraud.

A study from the University of Southern California found that cognitive decline significantly reduces wealth among households whose financial decision-makers experience these declines.

Putting a Power of Attorney in place before it is needed can prevent many issues. Children or another trusted family member are usually selected to serve as agents. The issue of timing is another concern—the agent should be appointed before irreversible mistakes are made. If control of finances is handed over too early, the elderly parent can be forced to live as a competent adult who needs permission to make routine decisions. However, waiting too long exposes them to financial mistakes.

How should you manage the timing? First, have regular medical checkups with a doctor who can track your mental status over time. Select your agent before issues begin as part of your estate planning. Consider a Springing Power of Attorney, allowing your agent to take charge if a doctor or court declares you unfit. Medical incompetence is a high bar, and financial mistakes can be made long before you meet a doctor’s standard for incapacity.

Another option is speaking with your agent regularly. Ask for their advice and follow it. If you trust them, you can have your estate planning attorney prepare a Power of Attorney form to suit your individual needs. Do you want your agent to manage every aspect of your financial life or focus on day-to-day bill paying? Does your situation require one person to pay bills and another to manage investments?

Cognitive decline impacts many older adults and can expose them to serious financial risk. You can protect yourself from this risk by appointing a trusted agent in a timely manner to manage your legal and financial lives.

Reference: yahoo! finance (July 28, 2023) “Don’t Forget to Build This Into Your Retirement and Estate Plans”

Estate Planning Blog Articles