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living longer

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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 A survey from Edelman Financial Engines also found that 26% had withdrawn money from retirement or savings for living expenses.
  7. About 60% of retirement savers have fallen behind, according to a TIAA study. Among these, 30% said it was directly due to the pandemic.
  8. 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.
  9. 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.
  10. 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.
  11. 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”

Am I a Senior Citizen?

Here are some milestones that could signal that you have become a senior citizen, according to US News and World Report’s recent article entitled “When Do You Become a Senior Citizen?”

Eligibility for Senior Benefits. There are exact ages when you qualify for a host of retirement benefits. In some ways, society makes it very clear when we become senior citizens. For example, we know that at age 65, we qualify for Medicare. Social Security benefits can begin as early as age 62 or as late as age 70. And senior discounts begin at some retailers and restaurants for those who are 55 or older.

If you’re 50 or older, you’re eligible to become an AARP member.

Spending Retirement Savings. Retirement accounts are developed to motivate workers to save for their retirement. Thus, accounts like a 401(k) plan or IRA usually impose a penalty for early withdrawals. If you take money out before age 59½, you’ll typically be hit with a 10% penalty. You may consider yourself a senior citizen when you no longer have to concern yourself with that 10% penalty for early withdrawals from your IRA or 401(k).

However, when you hit a certain age, you will need to take required minimum distributions from retirement accounts. Also called “RMDs,” these withdraws from traditional IRAs and 401(k) plans must be taken each year after age 72. Once you reach 72, you may think of yourself as a senior citizen because you have to start taking your RMDs from your retirement account.

Retirement. After you retire from working every day, your family and friends may consider you to have attained senior citizen status. The transition might bring on a feeling of meaning and purpose. Once you reach a certain age, you look back and go through self-reflection.

As you stop going to the office every day, you might feel a sense of gratitude for the years you were able to work and pursue a passion.

Health Issues. Medical conditions like arthritis, hypertension, or hearing loss may cause you to feel like you have reached senior citizen land. A person that is battling several age-related medical issues can feel olde,r just by the number and type of medications or medical devices they use.

It’s not easy to feel young when you are being fitted with a walker or hearing aid, and you’re lining up pill bottles every morning and evening. Feeling fatigued or ready for bed by 9 p.m. might be signals that you are getting older.

Reference: US News and World Report (Jan. 27, 2021) “When Do You Become a Senior Citizen?”

Am I Missing Retiree Tax Breaks?

Seniors frequently can miss tax-saving opportunities. In many cases, it’s simply because they just don’t know about them, says Kiplinger’s recent article entitled “The Most-Overlooked Tax Breaks for Retirees.” Let’s look at some these:

A Larger Standard Deduction. When you turn 65, the IRS offers you a bigger standard deduction. For 2020 returns, a single 64-year-old gets a standard deduction of $12,400 ($12,550 for 2021). A single 65-year-old gets $14,050 in 2020 ($14,250 in 2021). That $1,700 will make it more likely that you’ll take the standard deduction rather than itemizing. If you do, the additional amount will save you more than $400 if you’re in the 24% bracket. Couples in which one or both spouses are age 65+, also get larger standard deductions than younger taxpayers.

Medicare Premium Deduction. If you become self-employed when you leave your job, you can deduct the premiums you pay for Medicare Part B and Part D, plus the cost of supplemental Medicare (Medigap) policies or the cost of a Medicare Advantage plan. It isn’t subject to the 7.5%-of-AGI test that applies to itemized medical expenses. However, you can’t claim this deduction if you’re eligible to be covered under an employer-subsidized health plan offered by either your employer (if you have retiree medical coverage, for example) or your spouse’s employer (if he or she has a job that offers family medical coverage).

Spousal IRA Contribution. You must have earned income to contribute to an IRA, but if you’re married, and your spouse is still working, he or she can contribute up to $7,000 a year to an IRA that you own. Provided your spouse has enough earned income to fund the contribution to your account (and any deposits to his or her own), this is an option.

The RMD Workaround. Required minimum distributions (RMDs) weren’t required in 2020 (due to COVID), but retirees taking RMDs from their traditional IRAs in 2021 and beyond may have an extra option for meeting the pay-as-you-go demand. If you don’t need the RMD during the year, wait until December to take the money. You can ask your IRA sponsor to hold a large part of it for the IRS—enough to cover your estimated tax on both the RMD and your other taxable income as well. If your RMD is more than large enough to cover your tax bill, you can keep your cash safely in its tax shelter most of the year and still avoid the underpayment penalty.

Reference: Kiplinger (Dec. 29, 2020) “The Most-Overlooked Tax Breaks for Retirees”

Is there a Blood Test for Alzheimer’s?

Independent experts are cautious of a new first blood test to help diagnose Alzheimer’s disease due to the fact that key test results haven’t been published, and the test has not been approved by the FDA. While it’s being sold under more general rules for commercial labs, they agree that a simple test that can be performed in a doctor’s office is long overdue.

NBC News’s recent article entitled “First blood test to help diagnose Alzheimer’s goes on sale” notes that more than five million people in the U.S. and millions more around the world have Alzheimer’s, the most common form of dementia. To be diagnosed with it, people will experience symptoms, such as memory loss plus evidence of a buildup of a protein in the brain called beta-amyloid.

Currently, the best way to measure beta-amyloid is a costly PET brain scan that usually is not covered by insurance. As a result, most people won’t get one and are left wondering if their problems are due to normal aging, Alzheimer’s, or another cause. However, this new blood test from C2N Diagnostics in St. Louis will try to fill that gap. The test isn’t designed for general screening or for people without symptoms. It is intended for those 60 and older, who are having thinking problems and are being evaluated for Alzheimer’s.

The test isn’t covered by insurance or Medicare, and C2N Diagnostics charges $1,250. However, it offers discounts based on income. Only a physician can order the test, and results come within 10 days. It’s sold in all but a handful of states in the U.S. and was just approved for sale in Europe.

The blood test measures two types of amyloid particles plus various forms of a protein that show if a person has a gene that increases risk for the disease. These factors are combined in a formula that includes age, and patients are given a score suggesting low, medium or high likelihood of having amyloid buildup in the brain. If the test scores the patient in the low category, it’s a good reason to look for other things besides Alzheimer’s. There are a number of things that can cause a person to be cognitively impaired, from vitamin deficiencies to medications.

The company has not published any data on the test’s accuracy, but the doctors have published on the amyloid research leading to the test. Company materials cite results comparing the test to PET brain scans, which is the current gold standard, in 686 people, ages 60-91, with cognitive impairment or dementia. If a PET scan showed amyloid buildup, the blood test also gave a high probability of that in 92% of cases and missed 8% of them, said the company’s CEO, Dr. Joel Braunstein. If the PET scan was negative, the blood test ruled out amyloid buildup 77% of the time. The other 23% got a positive result, but that doesn’t necessarily mean the blood test was wrong. The published research suggests it may see amyloid buildup before it’s noticeable on scans.

Braunstein said the company will seek FDA approval, and the agency has designated it for a faster review.

Reference: NBC News  (Nov. 30, 2020) “First blood test to help diagnose Alzheimer’s goes on sale”

save money for retirement

What’s the Key to Saving Money in Retirement?

Of the many expenses for retirees, healthcare can be one of the biggest. There are Medicare premiums and prescription drugs. These healthcare expenses can take up a large part of your retirement savings. Some projections say that the average 65-year-old man today will spend $189,687 on healthcare expenses in retirement, and a typical 65-year-old woman will spend $214,565. These figures don’t include long-term care, such as nursing home expenses.

Motley Fool’s recent entitled “How to Save Money on Healthcare in Retirement” explains that there are steps you can take to decrease your healthcare costs in retirement. Let’s look at a few ways to save money, when you’re limited to a fixed income.

  1. Use Medicare’s free preventive services. Medicare eligibility starts at age 65. Once enrolled, you have access to many no-cost benefits aimed at helping you stay healthy. However, many seniors don’t take advantage of these services and lose an opportunity to get ahead of health issues. Medicare enrollees get a free wellness visit with a doctor every year, and scheduling that could help avoid a separate bill later. Many critical health screenings are also free under Medicare, including mammograms and certain cancer screenings, diabetes testing and depression screenings. Taking advantage of these free services is a great way to keep your health in the best possible shape, which will lower your overall healthcare costs.
  2. Nip health issues in the bud. Small health issues can become big ones, if left unattended. An easy way to save money on healthcare in retirement, is to address medical issues before they get worse.
  3. Look at a Medicare Advantage Plan. One reason why healthcare is so expensive in retirement, is that many essential services aren’t covered under traditional Medicare, like dental care, vision services and hearing aids. If you opt for a Medicare Advantage plan, however, you might save money on these and other critical services. Medicare Advantage typically provides a wider range of benefits, and in some cases, you could wind up paying less for Medicare Advantage than traditional Medicare—with that improved coverage. Medicare Advantage can also save you money, by decreasing your out-of-pocket spending. Most of these plans put a cap on that figure, but traditional Medicare has no limits on your yearly costs.
  4. Compare the Best Prescription Drug Plan. If you take prescription drugs, you need to find a cost-effective plan. If you’re enrolled in traditional Medicare, you’ll need a separate Part D plan to cover your drug costs. However, not all plans are the same. Do some comparison shopping to see which plans offer the best deals, based on the medications you’re taking.
  5. Purchase Long-Term Care Insurance. At least 70% of seniors age 65 and over will require some type of long-term care in their lifetime. That’s why long-term care insurance is needed. The younger you are when you apply, the more likely you’re going to get approved and get the best rates.

Saving money on healthcare in retirement will let your nest egg last longer and buy you more freedom to enjoy your golden years. Learn about healthcare costs, so you’re ready to lower your expenses and avoid the financial stress that so many of today’s seniors face.

Reference: Motley Fool (May 19, 2020) “How to Save Money on Healthcare in Retirement”

 

caring for a loved one

Caring for a Loved One from a Distance

Trying to coordinate care from a distance becomes a challenge for many, especially since as many as 80% of caregivers are working. Add COVID-19 into the mix, and the situation becomes even more difficult, reports the article “When your parent is far away and you are trying to care for them” from the Pittsburgh Post-Gazette.

The starting point is to have the person you are caring for give you legal authorization to act on their behalf with a Power of Attorney for financial affairs and a Health Care Directive that gives you authority to receive health information under HIPAA (Health Insurance Portability and Accountability Act). It is HIPAA that addresses the use, disclosure and protection of sensitive patient information.

Next, have a conversation about their finances. Find out where all of their important documents are, including insurance policies (long-term care, health, life, auto, home), Social Security and Medicare cards. You’ll want to know where their tax documents are, which will provide you with information on retirement accounts, bank accounts and investments.

Gather up family documents, including birth, death, and marriage certificates. Make sure your loved one has completed their estate planning, including a last will and testament.

Put all of this information into a binder, so you have access to it easily.

Because you are far from your loved one, you may want to set up a care plan. What kind of care do they have in place right now, and what do you anticipate they may need in the near future? There should also be a contingency plan for emergencies, which seem to occur when they are least expected.

Find a geriatric care manager or a social worker who can do a needs assessment and help coordinate services, including shopping for groceries, medication administration and help with basic activities of daily living, including bathing, toileting, getting in and out of bed, eating and dressing.

If possible, develop a list of neighbors, friends or fellow worshippers who might create a local support system. If you are not able to visit with any degree of frequency, find a way to see your loved ones on a regular basis through video calls. It is impossible to accurately assess a person’s well-being, without being able to see them. In the past, dramatic changes weren’t revealed until family members made a trip. Today, you’ll be able to see your loved one using technology.

You may need to purchase a smartphone or a tablet, but it will be worth the investment. A medical alert system will provide further peace of mind for all concerned. Regular conference calls with caregivers and your loved one will keep everyone in touch.

Caring from a distance is difficult, but a well-thought out plan and preparing for all situations will make your loved one safer.

Reference: Pittsburgh Post-Gazette (Sep. 28, 2020) “When your parent is far away and you are trying to care for them”

healthcare information

How to Keep Track of Mom’s Healthcare Information if She Gets Sick or Injured

It’s common for seniors to have several chronic medical conditions that must be closely monitored and for which they take any number of prescription medications. Family caregivers usually are given a crash course in nursing and managing medical care, when they start helping an aging loved one. The greatest lesson is that organization is key, which is especially true when a senior requires urgent medical care.

Physicians encounter countless patients and families who struggle to convey important medical details to health care staff, according to The (Battle Ground, WA ) Reflector’s recent article titled “The emergency medical file every caregiver should create.”

A great solution is to create a packet that contains information that caregivers should have. Here’s what should be in this emergency file:

Medications. Make a list of all your senior’s prescription and over-the-counter medications, with dosages and how frequently they’re taken.

Allergies. Note if your loved one is allergic to any medications, additives, preservatives, or materials, like latex or adhesives. You should also note the severity of their reaction to each of these.

Physicians. Put down the name and contact info for the patient’s primary care physician, as well as any regularly seen specialists, like a cardiologist or a neurologist.

Medical Conditions. Provide the basics about your senior’s serious physical and mental conditions, along with their medical history. This can include diabetes, a pacemaker, dementia, falls and any heart attacks or strokes. You should also list pertinent dates.

Do Not Resuscitate (DNR) Order. If a senior doesn’t want to receive CPR or intubation if they go into cardiac or respiratory arrest, include a copy of their state-sponsored and physician-signed DNR order or Physician Orders for Life-Sustaining Treatment (POLST) form.

Medical Power of Attorney. Keep a copy of a medical power of attorney (POA) in the packet. This is important for communicating with medical staff and making health care decisions. You should also check that the contact information is included on or with the form.

Recent Lab Results. Include copies of your senior’s most recent lab tests, which can be very helpful for physicians who are trying to make a diagnosis and decide on a course of treatment without a complete medical history. This can include the most recent EKGs, complete blood counts and kidney function and liver function tests.

Insurance Info. Provide copies of both sides of all current insurance cards. Include the Medicare Supplement Insurance (Medigap) and Medicare Prescription Drug Plan (Part D) cards (if applicable). This will help ensure that the billing is done correctly.

Photo ID. Emergency rooms must treat patients, even if they don’t have identification or insurance information However, many urgent care centers require a picture ID to see patients. You should also include a copy of their driver’s license in the folder.

Once you have all the records, assemble the folder and put it in an easily accessible location. Give the packet to paramedics responding to 911 calls. It should also be brought to any visits at an urgent care clinic.

Reference: The (Battle Ground, WA ) Reflector (Sep. 14, 2020) “The emergency medical file every caregiver should create”

elder law attorney

How Do I Find a Great Elder Law Attorney?

Elder law attorneys specialize in legal affairs that uniquely concern seniors and their adult children, says Explosion’s recent article entitled “The Complete Guide on How to Find an Elder Law Attorney.”

Finding the right elder law attorney can be a big task. However, with the right tips, you can find an experienced elder law attorney who is knowledgeable, has the right connections and fits your budget.

While, technically, a general practice attorney will be able to handle your retirement, Medicaid and even your estate planning, an elder law lawyer is deeply entrenched in elder law. This means he or she will have extensive knowledge and experience to handle any case within the scope of elder law, like the following:

  • Retirement planning
  • Long-term care planning and insurance
  • Medicaid
  • Estate planning
  • Social Security
  • Veterans’ benefits; and
  • Other related areas of law.

While a general practice lawyer may be able to help you with one or two of these areas, a competent elder law lawyer knows that there’s no single formula in elder law that applies across the board. That’s why you’ll need a lawyer with a high level of specialization and understanding to handle your specific circumstances. An elder law attorney is best suited for your specific needs.

A referral from someone you trust is a great place to start. When conducting your elder law lawyer search, stay away from attorneys who charge for their services by the hour. For example, if you need an elder law attorney to work on a Medicaid issue, they should be able to give you an estimate of the charges after reviewing your case. That one-time flat fee will cover everything, including any legal costs, phone calls, meetings and court fees.

When it comes to elder law attorneys, nothing says more than experience. An experienced elder law lawyer has handled many cases similar to yours and understands how to proceed. Reviewing the lawyer’s credentials at the state bar website is a great place to start to make sure the lawyer in question is licensed. The website also has information on any previous ethical violations.

In your search for an elder law attorney, look for a good fit and a high level of comfort. Elder law is a complex area of law that requires knowledge and experience.

Reference: Explosion (Aug. 19, 2020) “The Complete Guide on How to Find an Elder Law Attorney”

medicare

Will Medicare Cover Everything?

Actually, far from covering all your healthcare needs, Medicare may leave you with thousands of dollars in expenses for which you’ll be responsible.

The recent article in The Mooresville Tribune entitled “3 Reasons Medicare Coverage Isn’t as Comprehensive as You Think” provides three reasons why:

  1. Medicare has expensive deductibles and coinsurance. There are different parts to Medicare. Part A covers hospital care. Part B pays for outpatient care. Each one has deductibles and some coinsurance expenses. Let’s look at these examples:
  • Medicare Part A has a $1,408 deductible per benefit period this year. If you are in the hospital more than 60 days during a benefit period, you’ll owe coinsurance costs starting at $352 per day, based on how long you remain in care.
  • Part B has a $198 deductible in 2020, and you’ll pay coinsurance costs of 20% of the Medicare-approved amount for medical services after you meet the deductible. You’ll also owe monthly premiums.
  • Part C (Medicare Advantage) takes the place of traditional Medicare (Parts A and B) with private insurance. Coinsurance, copay and premium costs vary by plan.
  • Part D (prescription drug coverage) has several plans with varying premiums and coverage rules.

As a result, with only Parts A and B, you could wind up paying thousands of dollars out of pocket. That’s especially true, if you’re hospitalized for a long time during the year or if you need extensive outpatient care.

  1. Coverage exclusions. In addition, there are some items of care that Medicare doesn’t cover at all. For example, Medicare doesn’t cover routine dental care, eye exams, contacts, hearing aids or glasses.
  2. Medicare doesn’t cover long-term care in most circumstances. A major Medicare exclusion is long-term care insurance. Medicare covers care in a skilled nursing facility under a few circumstances, such as after a long hospital stay when you need assistance from a medical professional to recover. However, the program doesn’t pay for “custodial care,” either at home or in a nursing home. Thus, if you require someone to help you with routine aspects of daily living, like getting dressed, eating, or using the bathroom, you’ll have out-of-pocket costs.

It’s important to know that long-term care can be very costly. The median monthly costs of home health aides are roughly $4,300, and a semi-private room in a nursing home costs about $7,500 in 2019, according to Genworth. Since Medicare won’t pay for any of this in most circumstances, you’ll need another way to pay for it.

Don’t assume that Medicare will cover all your needs as a retiree. So, prior to retirement, examine what Medicare will actually cover. That will help you determine the amount you’ll need to save for healthcare costs. You can also consider Medigap or Medicare Advantage Plans or look into long-term care insurance.

Reference: Mooresville Tribune (Aug. 10, 2020) “3 Reasons Medicare Coverage Isn’t as Comprehensive as You Think”