BULLETIN: Senate Health Care Proposal Means Big Medicaid Cuts

By now just about everyone has heard at least some of the details of the Senate’s version of the American Health Care Act – the law that Republicans have been crafting in order to fulfill an eight-year-old promise to their voters to repeal and replace the Affordable Care Act, better known as Obamacare. After the house passed their version of the AHCA in May, all eyes turned to the Senate to see what legislators would craft behind closed doors. The final proposed bill, released to the public on June 22nd, looks a lot like the House version, but with some proposed differences.

Now the debate will begin in earnest. But no matter what eventually happens to this legislation, the big news to us here at AgingOptions is the impact of the AHCA on Medicaid, the federal and state program which pays for all or part of the medical needs of more than 73 million Americans, most of them the low income elderly.   This is a major story to watch, because for many of our clients, radio listeners and seminar guests, Medicaid will play a significant role in their eventual long-term care. If you have a small to medium sized estate, understanding the issues surrounding Medicaid has never been more urgent.

Since the Senate released its version of the bill, there has been a blizzard of news reports and analyses trying to make sense of its provisions and changes. This article just published on the website of The Atlantic does a good job of describing the proposed new health care law from a more liberal point of view, as indicated by its title: “The Senate Puts Medicaid on the Chopping Block.”  The bottom line, says the article, is that the Senate’s version of the AHCA “restricts and slashes Medicaid funding deeply over the next decade” – and, we would add, well beyond that time if the law passes unchanged.

We should, of course, point out the obvious: we live in politically turbulent times. It’s entirely possible that the Democrats may return to power in the House in 2018 or the Senate (or even the White House) in 2020, and if they do they would likely attempt to roll back the GOP’s changes to Obamacare. But whether or not that happens, anyone regardless of political persuasion can see that we are entering a time of great instability and unpredictability in national health care policy, and if you (like millions of other retirees and those facing retirement) are counting on Medicaid to be there for you, you may need to think again. Don’t base your future security on a dangerous illusion!

There are far too many details in this proposed law for us to discuss here, but the changes to Medicaid rules in both the Senate bill and the House bill are what really caught our attention. Some of the particulars involve the GOP’s aim to roll back the expansion of Medicaid to many who formerly had been ineligible, a provision of Obamacare that a large number of Republicans have long disliked. Many of those now covered by Medicaid are part of the group often called “the working poor,” people who are employed but unable to afford health insurance in the marketplace. The Senate bill would phase out Medicaid expansion funds more slowly than the House version, which makes the Senate version sound less harsh.  But the new law, if passed, would have immediate unintended consequences. “Seven states,” says The Atlantic, “have ‘trigger laws’ that would immediately void their Medicaid expansions with any change in federal support,” which could suddenly add millions to the ranks of the uninsured.

We are also especially concerned about the proposal in the new law that changes what is now open-ended Medicaid funding into a “block grant” to the states. This change, says The Atlantic analysis, turns Medicaid into “a per-capita cap scheme, where states receive a capped amount of funding each year per enrollee.” This shift, say analysts, “would underfund Medicaid over time, leading to a growing gap between the number of patients who would be eligible under current guidelines, and the funds available to pay for their care.” The eventual outcome would be “large-scale shortfalls in every state, which would need to be closed by reducing enrollment or benefits, and cutting capacity to respond to disasters and public-health crises.” The ones who would suffer the most would be children, seniors and the disabled.

Critics of the new proposed law call it “a massive constriction of the safety net. It will have a substantial impact on both wealth and health, shifting the benefits of public policy away from the poor and the sick, and toward the healthy and the affluent.” Whether or not you agree, as we said before, it has never been more urgent that you become well informed about the need to protect your assets and cover the costs of your future health care needs with a Safe Harbor Trust or other well-planned financial and legal tool.

The best way to begin getting the answers you need right now is to attend a free AgingOptions LifePlanning Seminar. We offer these at locations throughout the area, and because of the recent spate of headlines we expect our currently-scheduled seminars to fill up rapidly. Click here for details and online registration, or call us for assistance. Don’t let the changes in the health care law catch you off guard! We’ll see you soon at an AgingOptions LifePlanning Seminar in your area.

(originally reported at www.theatlantic.com)

5 Warning Signs Your Financial Advisor Might Not Be On Your Side

Here at AgingOptions we frequently get asked the question, “Who is the best financial advisor for me?” What people really seem to be asking is, “Where can I get advice I can trust, without falling prey to someone’s hidden agenda?” In these days of market turbulence and increasing fiscal confusion, people are desperate for good, honest, objective recommendations – but where can they find it?

We’ll give you our perspective on that question in just a moment, but first we want to call your attention to this eye-opening article just published on the Money website of US News. The title really caught our eye: it’s called 5 Signs Your Financial Advisor is Working Against You.  “Sometimes,” warns US News, “the person you hired to help you get ahead is the one putting hurdles in your way.”

More and more people seem to be relying on financial advisors of one variety or another to help them chart their financial future. According to a survey done by the Certified Financial Planner Board of Standards, in 2010 about 28 percent of Americans used the services of a financial advisor – but by 2015 that number had risen to 40 percent. What accounts for this dramatic rise?  “Many people do not feel they have enough hours in the day,” says the article, “or the technical expertise to manage keeping up with the rapidly changing financial landscape.” People these days also seem more worried about the financial security of their family – it’s “a weight (that) becomes even heavier when you begin to wonder what happens to those you love when you are no longer around to steer the financial ship.”

But the truth is that “not all financial professionals can be trusted to help with the decision-making process, and some actually work against the best interests of those seeking guidance,” warns US News. Just because someone has a long list of credentials after his or her name doesn’t mean they’re going to act in your best interests, which means you need to be a smart consumer – after all, your financial future could be at stake. The US News article lists these five “suspicious circumstances” that may suggest it’s time for you to seek out a second, more objective opinion.

The first yellow flag, says the US News article (which was co-written by two fee-only financial planners) is if your planner recommends an annuity inside an individual retirement account. We don’t want to go into too much detail because the topic of annuities can be complex (we encourage you to contact us at AgingOptions so we can help you get thorough advice about annuities or any other financial topic).  But in the view of the article’s authors, planners who suggest an annuity inside an IRA are forcing you to pay for an unnecessary layer of annuity fees without gaining you any additional tax benefits. Annuities in an IRA, say the authors, are less cost-effective and more expensive, and if your planner suggests this strategy he or she may be lining their pockets with extra fees at your expense.

A second warning area is recommending high-risk strategies – higher than your situation suggests. For example, says US News, “If your advisor recommends mortgaging a paid-off home so you can invest in more insurance and financial products, get a second opinion. There is a conflict of interest when advisors encourage clients to increase their debt, often resulting in a large commission check for the advisor and higher ongoing fees for the client.”

The third caution is if your advisor starts pushing insurance products you don’t need. “It should be concerning if every solution or proposal that your advisor puts forward involves insurance or annuity products,” the article says. These products aren’t necessarily bad in themselves, but they are expensive and often force you to lock up your money for years, even decades. And remember, your planner is earning commissions every time you purchase one of these costly and potentially restrictive products.

The fourth practice that should set off alarm bells is when your planner engages in a practice called churning. “Churning,” says US News,” is when a broker engages in excessive buying and selling of securities in a customer’s account chiefly to generate commissions that benefit the broker.” It’s not unusual for advisors to recommend a financial product and then turn around a year or so later and suggest another, forcing the client to pay commissions and sometimes costly surrender fees. “Sometimes the only person making money on these transactions is the person who is selling the product,” says the article.

Finally, it may be time for a second opinion (or a new advisor) if you sense your portfolio is being neglected – in other words, if your advisor is guilty of errors of omission. This is the opposite of churn: instead of too many fee-generating transactions, some planners are guilty of too few.  “Portfolio monitoring, rebalancing and investment review are all parts of a sound investment management process,” says US News. “If your portfolio is comprised of the top-rated investment funds or best performers from 1999, there might be no reason to continue to hold those specific investments today.” Time for a fresh look!

All this is good advice. Our suggestion remains the same as it has always been: you are generally better off, and more likely to get good, objective financial advice if you deal with a fee-based planner, not someone with a product to sell. Contact us at AgingOptions and we can steer you toward reputable planners in your area. But don’t forget this: a financial plan alone is hardly enough to get you safely into and through your retirement years. In fact, relying on a financial plan all by itself is a recipe for disaster. As soon as an unplanned medical emergency arises, you’ll need a medical plan – which will likely force you to make a new housing choice, which necessitates a housing plan. In the midst of all this emergency planning, legal issues are bound to arise, so you’re going to need a legal plan. And finally, will your family understand and support your wishes? A family communication plan will become essential if you want to avoid being forced into a nursing home against your wishes, and keep from being a burden to your loved ones.

Only one form of retirement planning encompasses all these elements: financial, medical, housing, legal and family. It’s an AgingOptions LifePlan, and if this sounds like a true retirement breakthrough, it is. Why not take the time to find out more? Plan now to attend a free LifePlanning Seminar in a location near you. We have several choices of dates and locations so click here for details and online registration, or call us during the week for assistance. Bring your retirement questions, and we’ll answer them at a LifePlanning Seminar!

(originally reported at http://money.usnews.com)

At What Age Do We Become “Old”? 4 Generations, 4 Different Answers

We’ve all heard the expression “You’re as old as you feel.” We’ve also heard people say that “Age is just a number,” and “70 is the new 50” (something aging boomers tell themselves on a regular basis). But that does raise an interesting question: at what age are we officially “old”?

We ran across this fun and fascinating article on the Time magazine “Money” website. The article asks the question, “If age really is just a number, what number marks old age?” The answer, not surprisingly, is that your definition of “old” depends largely on how old you are now. According to the Time article, those who are least “generous” in their definition of the beginning of old age are the millennials, who are presently (according to the survey) between age 21 and 36. These youngsters say you’re official old when you turn 59. For the Generation X group (age 37 to 52) who themselves are starting to grow past middle age, “old” begins at 65.

We were amused by the answer given by the baby boomers, that vast generation currently between the ages of 53 and 72. For boomers old age always starts “next year,” in this case at age 73. As for the silent generation, age 73 or older, the survey suggests they all feel they’ve pretty much arrived: their answer for the starting age of “old” was the same as the boomers, age 73.

This same survey also asked about the opposite end of the age spectrum: according to each generational group, when does youth officially end?  “Surprisingly,” writes Time magazine, “millennials were the most inclusive when it came to defining who is young, saying that only at age 40 does youth end. Of course, this means they think middle age spans only 19 years.”  The Generation X and baby boomer cohorts offered matching answers, each claiming that the state of being “young” ends at age 31, while the silent generation remembers things differently: they say youth ends at age 35.

All this was based on a study of more than 800 high net worth households in the U.S.Trust “Insights on Wealth and Worth” report. You can access a report summary by clicking here.

If those arbitrary bookends define what “old” and “young” mean in the minds of these various generations, what age could be defined as the prime of life?  In the words of the Time article, “Asked separately to define the age at which someone hits the prime of life, in terms of a person’s resources, potential, capacity and influence, millennials put that at 36. Older respondents – all already past 36 themselves – felt the prime of life came later. Gen X said age 47 was the prime, while boomers put it at 50 and the silent generation selected age 52 as best.”

Apart from fun cocktail party chatter, preconceived ideas like these about aging can have serious consequences, especially (says the Time article) in the workplace. “Negative opinions about aging can be a significant impediment to older workers who are looking to find new jobs or advance in their careers. That’s a particular problem as longer lifespans and savings shortfalls have many people looking to delay retirement or work part time after they stop full-time work.” An aging boomer-generation worker with a millennial boss, for example, may have to work extra diligently to demonstrate that he or she is still able to handle the demands of the job. It might help that older worker if he or she could gain a better understanding of what the younger boss might be thinking.

The good news in all this is that perceptions about “old” – or in this case, misperceptions – can be changed. The AARP has developed a campaign called Disrupt Aging that demonstrates how a young person’s sense of what “old” means can be pretty easily adjusted.  We encourage you to watch this wonderful AARP video in which millennials were asked what age “old” is (and what “old” looks like) – then were introduced to men and women who matched that age. None of the stereotypes the millennials expected to see, including confusion, memory loss, general feebleness and struggles with technology was proven true. As a result of these lively encounters, every millennial adjusted his or her definition of “old” higher by 30 or 40 years. It’s worth watching.

At AgingOptions we have never believed in a definition of “old.” We’ve encountered people in their 30s who seem far less energetic, healthy, curious and “alive” than people we know in their 70s and 80s. When it comes to aging, there are some things we may not be able to control, but there’s a lot we can control, and a big part of aging well means taking charge of your life and living with intentionality and purpose. Aging well also means planning for your retirement future, and that in turn means an AgingOptions LifePlan. What makes a LifePlan so indispensable? It’s the only retirement plan we know of in which all the critical elements of your future planning work together interdependently: your financial plan, your legal plan, your medical plan, your housing plan, even your plan to involve your family. A LifePlan from AgingOptions allows you to look forward to retirement knowing you’ll be able to preserve your assets, avoid becoming a burden to those you love, and escape the trap of being forced against your will into institutional care. Imagine the confidence such a plan will bring!

You don’t have to imagine it – instead you can experience it for yourself, at an upcoming AgingOptions LifePlanning Seminar. We offer these popular events throughout the region, so why not invest a few hours at this free, no-obligation seminar and see for yourself? Click here for details and online registration, or contact us during the week and we’ll gladly assist you.

Remember, age is little more than a number – so, as we like to say, “Age on!”

(originally reported at www.time.com/money)

Too Many Seniors Leaving the Hospital are Refusing this Vital Service

One would think that a vulnerable senior adult being discharged from the hospital to recover at home from illness or surgery would welcome the offer of in-home medical help. Many do – but a surprisingly high number refuse the help they need, putting themselves at far greater danger of ending up right back in the hospital.

That’s just part of the findings in this very recent article on the website of Kaiser Health News. Kaiser author and aging expert Judith Graham reveals that as many as 28 percent of adults, most of them seniors, who are offered home health care upon discharge from the hospital refuse it, even though in most cases the cost is largely covered by Medicare, at least for a while. “Refusing home health care after a hospitalization,” Graham writes, “puts patients at risk of a difficult, incomplete or slower-than-anticipated recovery.” It also increases the likelihood that they’ll find themselves back in the hospital far sooner: a recent study shows that older adults who refuse home health care services are twice as likely to be readmitted to the hospital within 30 or 60 days.

One 84 year old man who was recovering from a mini-stroke was insistent that “he didn’t want anyone coming into his home, and he didn’t think he needed any help,” says the article. As a result the social worker cancelled the order for home health care services and sent the man home without a follow-up plan, completely disregarding the wishes of the man’s daughter who had spent weeks trying to convince her dad that the care was important and necessary. This kind of family miscommunication, writes Judith Graham, is all too common.

Why do so many seniors turn their back on services that can speed their recovery and even save their lives? There are many reasons, the Kaiser article suggests, starting with the idea that many older adults don’t understand what “home health care” services actually entail.  “Under Medicare,” writes Graham, “home health care services are available to older adults who are homebound and need intermittent skilled care from a nurse, a physical therapist or a speech therapist, among other medical providers.” These services typically last between four and six weeks after a hospitalization, with a nurse visiting several times a week. Occasionally home health care services can last even longer.

It’s important for seniors and their families to understand that “home health care” and “home care” are not the same. Home care “is delivered by aides who help people shower or get dressed or who cook, clean and serve as a companion,” the Kaiser article explains, while home health care is delivered by medical professionals. Also unlike home health care, home care is generally not covered by Medicare.

But apart from this misapprehension, families and caregivers need to understand some of the deep-seated psychological and emotional reasons for seniors to refuse home health care.  In the words of one San Francisco geriatrician, “Older adults are quite concerned about their independence, and they worry that (accepting care) might be the first step in someone trying to take that away.”  Many seniors are also intensely private and they are apprehensive about losing their privacy when a “stranger” comes into their home on a regular basis. Some may be afraid of becoming victim of fraud or abuse at the hands of a caregiver they don’t know. In some cases, a senior who is beginning to experience cognitive decline may not be able to make a rational decision, or they may be embarrassed if they’re having difficulty taking care of their own home.

But in some instances the older adult, like the 84 year old mentioned above, is just plain stubborn. They think they can get along just fine, and they really have little or no idea just how hard recovering from a hospitalization is likely to be.

Here at AgingOptions we definitely recommend the Kaiser Health News article because it spotlights a problem you might never have considered: what will you do five or ten or twenty years from now if your proud, independent parent is refusing the home health care you know they need? We do have two pieces of advice. First, if you’re a senior (or if you have a loved one who is) we strongly urge you to visit a geriatrician in your area and make him or her the most important individual on your health care team. Having a physician who specializes in issues facing older adults will be essential, not just today when things are relatively stable but tomorrow when a health emergency hits. The second recommendation is for you to contact us at AgingOptions and schedule a family conference. Our trained professional staff will guide you as you review many of these potentially troublesome issues, and you’ll find that by discussing and planning now you can avoid huge problems and conflicts later.

If you’re at the stage where you need more information about comprehensive retirement planning, why not do what thousands in the Pacific Northwest have done and attend one of our free AgingOptions LifePlanning Seminars?  Invest just a few hours in one of these information-packed sessions and you’ll come away with a fresh understanding of how all the elements of your retirement plan – legal, financial, medical, housing and family – need to mesh together in one seamless blueprint. That’s the genius of an AgingOptions LifePlan! If you’ll click on this link to our Upcoming Events page, you’ll see all the currently scheduled seminar dates, times and locations – then you can register online or contact us for assistance during the week. It will be our pleasure to meet you soon at an AgingOptions LifePlanning Seminar near you.

 (originally reported at www.khn.org)

06-17-17 Aging Options (Hr 1)

1st Hour-KTTH & KIRO

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You’re on Medicare, but Spouse is Too Young. What are Your Options?

A few weeks ago we read this piece on the Huffington Post: a letter written to retirement expert Jim Miller by a man about to retire. “When I retire in a few months at 65 and go on Medicare,” this man wrote, “what are my wife’s (insurance) options?” (His wife is 62 and still on her husband’s employer-provided healthcare plan.)  He asked Miller, “Is there some kind of Medicare coverage for dependent spouses, or do we have to purchase Obamacare?”

This question may seem a bit basic to some, but one thing we at AgingOptions have learned in our many years of dealing with retirement issues is that there is no such thing as a question that’s “too basic.”  So we’re glad to link to the Huffington Post column and provide some answers to this man’s question. But as is so often the case, we believe this man may be asking the wrong question, as we’ll see in a moment.

As columnist Miller responds, there are essentially four medical coverage options that may be available to this soon-to-be retired man and his too-young-for-Medicare wife. But one option definitely not available is some form of spousal coverage under Medicare. “Medicare, unfortunately, does not offer family coverage to younger spouses or dependent children when you qualify for Medicare,” he writes. “Nobody can obtain Medicare benefits before age 65, unless eligible at a younger age because of disability.”  So with that idea off the table, let’s review the coverage options for this man to consider in order to keep his wife continually insured.

The first option, says the article, isn’t exactly for the wife, but for the husband: perhaps he should keep working, at least for a few years longer. The letter to Jim Miller doesn’t reveal whether this man will be retiring with a pension or plans to take Social Security, but assuming it’s the latter he’ll be retiring one year shy of full retirement age. By remaining on the job, this man will boost his own benefits significantly and will also be able to keep his wife on employer medical for that much longer. Staying on the job would appear to be a win-win, increasing Social Security income and delaying the need to buy his wife her own insurance coverage.

But maybe that’s not an option. If that’s the case, then Miller offers the first of three other possibilities for coverage: the man should talk to his company’s Human Resources department before he retires and find out if there’s any provision whereby his wife could continue on his company’s coverage even after his retirement. While this may be a longshot, some firms do have a provision for retirees or their spouses to stay covered, so it’s worth having the conversation. (Of course, if the wife is working her own job, it would be wise for her to shift her coverage to her company’s plan, even if it seems more expensive, because it’s probably less pricey that some of the other options, as we’ll see.)

The second suggestion to provide coverage for the wife is the program most of us have heard of called COBRA. Believe it or not, “COBRA” stands for something very non-medical: the Consolidated Omnibus Budget Reconciliation Act, which is the law that gives workers and their families who lose employer health care benefits (in most cases) the right to maintain the coverage by paying the premiums. Any firm with 20 or more employees is required to offer COBRA benefits. COBRA will keep this man’s spouse covered for at least 18 months (a period which can sometimes be extended) but the premiums will be high – far higher than the subsidized premiums the man was paying for his wife’s coverage as an employee.  COBRA can be complicated and costly, and it’s not available to everyone. If you want to read up on COBRA, click here  for a link to the website of the Washington State Insurance Commissioner.

The third choice offered by Jim Miller writing on the Huffington Post may turn out to be the most viable option, and that’s to purchase an individual health insurance policy for the wife through the Affordable Care Act, also known as Obamacare. The couple could buy a policy for the wife now and keep it in force until she turns 65.  Unless Congress changes the rules, insurance plans offered under the ACA are comprehensive and companies can’t refuse coverage based on preexisting conditions. What’s more, as Miller points out, people with qualifying income levels (anything below $47,520 for an individual or $64,080 for a couple in 2017) may qualify for tax credits that can reduce premiums further. We’re including a link to the subsidy calculator on the website of the Kaiser Family Foundation which will show you what your potential savings may be.

People can also buy health coverage without going through the ACA marketplace. This can be done by contacting private insurance companies, online insurance sellers, or insurance agents. Because costs and coverage will vary widely, it’s important to get some good advice about your options before you make your choice. If you’ll contact us at AgingOptions we can review your situation with you and provide some helpful recommendations.

But why did we say that this man is asking the wrong question? Isn’t medical insurance important? Certainly it is, but it would appear to us that this man is falling into the common misconception that all these different aspects of retirement planning – medical, financial, legal and housing – fit neatly into their silos and don’t relate to reach other. This is precisely why, if we were advising this man about to retire, we would urge him to attend one of our free LifePlanning Seminars, which we offer several times each month in locations throughout the Puget Sound area. At these highly informative events, we demonstrate how all these parts of retirement planning have to fit together into one interdependent whole – called a LifePlan – and how your family and other loved ones have to be onboard if you’re going to protect your assets in retirement and avoid becoming a burden to them as you age.

So get your retirement-related questions answered, and learn about the comprehensive approach to retirement planning that we call LifePlanning. Click here for seminar details and online registration, or call us and we’ll gladly assist you by phone. We’ll see you at a LifePlanning Seminar soon!

(originally reported at www.huffingtonpost.com  

 

High Profile Legal Battle Reveals Growing Crisis in Estate Planning

Here’s an update on a story we brought you just one year ago. It’s another sad example of how even those with vast personal wealth sometimes fail to plan carefully for their declining years. No matter how rich and powerful they are, the result of this planning failure is often a disaster, with vicious courtroom battles, accusations of manipulation, and an endless supply of headlines for the news websites and tabloids. But don’t miss the important lesson for us all: if we don’t plan properly today – and if we don’t make certain those who are looking after us in our declining years thoroughly understand and support our wishes – we could be setting our own families up for a similar fate a decade or two from now. Even fights over modest-sized estates can quickly become bitter, stretching family bonds past the breaking point. Is that how you want to be remembered?

In 2014 the news was filled with stories of the decline and eventual death of music legend Casey Kasem. Sadly, what really attracted the attention of most of us wasn’t the account of Kasem’s influential career in pop music, but the ugly fight over his care and his estate as the former radio star suffered from deteriorating mental and physical capacity. The battle over Kasem’s custody, and his money, made for a real-life tabloid soap opera.

Now, as we first wrote in 2016, it’s happening again – only this time the stakes are even higher. The key player in this most recent headline-grabbing drama is Sumner Redstone, the billionaire media mogul whose company controls both CBS and Viacom. Redstone has a personal fortune estimated at $5 billion, and his media empire is worth eight times that much. However, the 93-year-old Redstone also suffers from what some claim is advanced dementia, and his diminished capacity has triggered a battle royal between children, grandchildren, business partners, former mistresses – and, of course, armies of attorneys.

There has been a barrage of media coverage of the Redstone Affair. Click here for an excellent analysis we read last year about this sad saga in the New York Times. Lest you think this battle over money has been settled, think again: just a few days ago another lawsuit was filed by a former companion of Sumner Redstone, which you can read about by clicking here.

The details of the war over CBS, Viacom and Redstone’s personal fortune would fill several pages, and we won’t attempt to review them here. But what really caught our attention was this statement at the start of the New York Times article: “With a fortune estimated at over $5 billion, Sumner M. Redstone could afford the best estate planning that money could buy,” said the Times. “What he ended up with is a mess.”

The whole saga of the death of the rich and famous can be sad, even pathetic. Pop star Prince died without a will. Casey Kasem died in a reduced mental state with those supposedly closest to him fighting it out in court and in the media. Now Sumner Redstone, a wealthy and influential tycoon just a few years ago, has become a humiliated figure while an unseemly war rages around him. Here at Aging Options, we pass these stories along to you, not out of a voyeuristic desire to gloat over the misfortunes of the powerful, but as a warning: you don’t have to be rich and famous to need a carefully designed estate plan.

As people age, many will begin to lose the capacity to make sound decisions about their affairs, leaving them open to undue influence by caregivers and others. The New York Times quotes Chicago estate planning specialist Kerry Peck who says that “the Redstone pattern is happening in epidemic proportions.” He adds that sometimes older men are influenced by younger women who meet them in “places you’d consider safe, like senior centers, churches and synagogues. They start as caregivers and then become romantic suitors. We’re seeing these scenarios with stunning frequency.” When this happens, the wishes of children, grandchildren, and other loved ones can literally be tossed out the window. The Times calls this “a huge issue nationally,” even for people of modest wealth.

There is a long section in the New York Times article detailing possible solutions to this problem including the creation of a trust that determines who can make decisions for you in the event of incapacity. (Ironically Sumner Redstone has such a trust in place, but because it does not adequately define the term “incapacity,” no one can agree if he is of sound mind or not, and the courts are trying to step in to untangle the resulting legal mess.) Another expert quoted in the Times piece said, “In drafting a trust like this, you need very clear standards and protocols for determining [mental] capacity.”  Sadly, the Times concludes in considering Redstone’s short-sightedness, “no amount of legal advice can save people from an unwillingness to face their own mortality and cede control while still in full control of [their] faculties.”

As Rajiv Nagaich also emphasizes, lack of planning alone is seldom the entire problem. Too often our fiduciaries – those we select to manage our affairs – either fail to understand their duties or are unwilling to carry them out, either through ignorance or self-interest. “Death and disability create a highly emotional environment,” says Rajiv, “even for estates that do not have significant value. The more resources you add, the more you magnify the problem.” The missing piece, says Rajiv, is “having a well-managed family meeting conducted by a someone really skillful who is not part of the immediate family.” The professionals at AgingOptions can assist you with this critical planning tool if you’ll contact our office.

Few of us will ever have the resources of a Casey Kasem or Sumner Redstone. But all of us want to protect our assets as we age, avoid becoming a burden to our loved ones, and escape the trap of unplanned institutional care.  “Without a good, thorough family meeting,” Rajiv emphasizes, “it is highly unlikely that these goals will come true – no matter how well your legal documents are written and how much money you have in the bank.”

Yes, these are touchy issues. But here at Aging Options we want to offer our services as your guide through the maze of retirement and estate planning. It doesn’t have to be overly complex! When it comes to retirement, our comprehensive approach takes all aspects of your retirement plan, or LifePlan, into account: legal affairs, financial plans, health care requirements, housing choices and family ties. With a LifePlan in place, you can face the future with confidence and peace of mind. To get started, why not join us for a free LifePlanning Seminar? You’ll find all the information including online registration by clicking this link to our Upcoming Events tab.  We’re confident you’ll thoroughly enjoy this information-packed session.

Remember, even the wealthy like Sumner Redstone or Casey Kasem can fail to plan adequately. With our help, that won’t happen to you! We’ll look forward to meeting you soon.

(originally reported at www.nytimes.com and www.mynewsla.com)

 

 

Is This Lump-Sum Offer from Social Security a Scam? You Decide.

Here’s a new wrinkle many may not have heard about until now. Apparently officials from the Social Security Administration are calling people who are delaying benefits until age 70, offering them a cash incentive if they’ll file for benefits early.

Does that sound like a scam to you? It does to a lot of people, and it did to syndicated columnist and Social Security expert Laurence Kotlikoff. But writing in this article that just appeared in the Seattle Times, Kotlikoff says the call and the offer are real – however, that doesn’t mean people should be sucked in by this lure of a lump sum payment. Apparently Social Security is offering cash now in an effort to save more money in the long run.

Kotlikoff writes about a man who was planning on commencing Social Security benefits when he turns 70 this coming August. Last fall this gentleman received a call from the Social Security Administration (SSA) telling him that if he filed for benefits as of November 2016 instead of August 2017 the government would pay him a lump sum incentive check of almost $19,800, in essence paying him for six months’ worth of benefits. The caller from the SSA explained that if the man declined the offer and stuck with his plan to delay benefits until 70 it would take him until age 80 to make up the difference. Based on this assertion the man agreed to start his benefits earlier than planned and claim his one-time cash incentive.

So far this sounds like one of those too-good-to-be-true hoaxes, but apparently it’s not. This man received his $19,800 check in the mail and his benefits commenced as promised. So it was a good deal, correct? No, it wasn’t a good deal for this particular gentleman, and if you get a call from Social Security under similar circumstances it might not be the best for you, either. What was going on here?

“This is, indeed, a scam being run by the Social Security Administration,” writes Kotlikoff. “Social Security appears to be calling everyone who is trying to maximize their retirement benefit by filing at 70 and bribing them to file early.” There are several reasons why he uses the word “scam” to describe this incentive plan. But before we get into the details, let us strongly advise you that deciding when to begin Social Security benefits can be a complex matter with many individual factors to consider. We at AgingOptions will be happy to provide you with expert counsel, based on our many years of experience with this complicated decision.

So why does Kotlikoff call this a scam, and why should someone be hesitant about accepting the offer of a cash bonus for filing early? First, the SSA is failing to fully disclose that filing early permanently lowers monthly benefits. For a person this man’s age, born between 1943 and 1954, benefits grow by 8 percent for every year the beneficiary waits to start payments, topping out at age 70. If this man in the article starts his benefits 9 months before age 70, his payments will be reduced by 6 percent, permanently.

Second, not only are monthly benefits reduced, but the family’s lifetime benefit would drop fairly dramatically. Using a computer model, columnist Kotlikoff estimated that taking the early payment would actually end up costing this man and his family more than $22,000.

Finally, not only does this man lose out on monthly cash in his Social Security check, but so will his wife if she outlives him. Under the regulations, the surviving lower-earning spouse will receive the benefit of the higher-earning spouse. In this case, the difference for the surviving wife could amount to several hundred dollars monthly, a significant amount that could dramatically affect her quality of life for years to come.

So why, asks Kotlikoff, is this happening? “Is Social Security intentionally scamming the public?” he asks.  “Possibly. Getting people to file early saves the system money” – even with a lump sum bonus as an incentive. He speculates that government officials may be gambling that it will be cheaper for the SSA to make these lump sum payments and getting beneficiaries to lock in lower payments, playing the odds that many beneficiaries won’t do the math. There are exceptions, but for most people in good health, delaying until age 70 pays good dividends. If you live past your early 80s, you’ll earn significantly more than those who started benefits at age 66 or 62.

What about the man who was subject of this column – the one who accepted the offer of a lump sum check and a lower benefit? His advisers reminded him of the wisdom of sticking with the original plan, so he decided to file a form withdrawing his application for retirement benefits. He mailed back the check and chose to hold out until age 70.

Planning for your retirement future is not only complicated, it’s also multi-faceted. Here at AgingOptions we frequently encounter people who have made careful financial plans involving Social Security, savings and pensions, only to find that when a crisis hits those plans often prove inadequate. Finances alone simply cannot ensure a safe and secure retirement! If your desire is to protect your assets as you age, avoid becoming a burden to your loved ones, and escape the trap of being forced into a nursing home against your wishes, you need an AgingOptions LifePlan – a blueprint for your future that connects your financial, legal, housing, medical and family plans into one seamless whole.

We invite you learn more at one of our free LifePlanning Seminars. There are several of these fast-paced information-packed sessions planned for this month at locations throughout the area.  Click here for details and online registration, or call us during the week and we’ll gladly assist you.

(link to www.seattletimes.com)

 

As Boomers Age, Senior Centers are Getting a Total Makeover

There’s no doubt about it – the baby boomers have left their mark on American culture for decades. Now as they age, with the advance cohort just over 70, baby boomers are helping stimulate yet another surprising change in our society: they’re causing a huge transformation in senior centers around the nation.

That’s the interesting revelation in this article we found last fall on the New York Times website. According to the article, there are roughly 11,500 senior centers in the U.S., and many of them are completely changing and updating themselves, from their facilities to the services they offer to the names they bear.  No more bingo, says the Times – bring on the senior speed-dating, wine-tasting and sushi-making classes. To appeal to baby boomers, it appears, a total makeover is required!

For decades, senior centers – some privately owned and some operated by the communities where they’re located – have provided a social and recreational outlet for older adults who might otherwise not have a place where they feel they belong. But in recent years, says the New York Times, Americans have begun to display a growing tendency to isolate themselves, in the process losing a sense of community and suffering a decline in health and happiness. This isolation is especially hard on seniors: recent research has linked loneliness among the elderly to a host of problems including depression, even dementia. One solution to get seniors involved is to re-cast the traditional “senior center” into a more modern, less old-fashioned model, and make it the kind of place aging boomers will seek out.

There are several examples of this kind of fresh thinking cited in the Times article. One is in Chicago, called Mather’s “More Than a Café.” It was launched in 2000 after the publication of the best-seller Bowling Alone in which author Robert Putnam described an American society that prefers solitary living to the kind of “joiner” mentality of earlier generations. Mather’s now operates three Chicago locations.   According to the Times, “the Chicago café, which could easily be mistaken for a large Starbucks, is much more than that.”  Mather’s serves “as a community hub, mostly for older people, with dozens of classes on topics like flower arranging, Egyptian history and digital safety.”  Best of all, say those who are part of the Mather’s community, the café offers participants “a caring group of neighbors who serve as a kind of substitute family.” The word is spreading: people from other cities are coming to Chicago to learn from Mather’s, and more than 40 similar cafés have been launched with more on the way.

The transformation of senior centers into something brand new is going on outside as well as inside. “Many centers are also shedding their names so that they can evolve beyond being seen as just places to play bingo,” the Times writes. For example, one center in Minnesota is now called “125 Live,” and they’ve moved into “a sleek, modernistic building with a teaching kitchen, big lap pool, pottery studio and a gym.” Other centers feature yoga, Pilates and Zumba classes — and a motorcycle club. “We have to move away from hot meals and bingo,” says Jim Firman, the chief executive of the National Council on Aging, quoted by the New York Times. “So there’s a lot of exciting innovation going on. The laggards will catch up or go away.”

According to Firman, the chief goal is “to transform the typical senior center into more of a longevity hub.” He says the current state of senior recreation is like a revolution caused by aging baby boomers.  “We’re developing richer programming,” he says. “We’re given the gift of longevity, so we have to spend it wisely.”

We here at AgingOptions applaud that philosophy. As far as we’re concerned, retirement planning is all about living – making the right decisions today so you can enjoy your aging years to the full. In order to help you do that, we’ll work with you to create a retirement plan that protects your assets, prevents you from becoming a burden to your loved ones, and ensures that you will not have to face moving into an institution against your wishes. We call this type of plan a LifePlan, because it covers all the important aspects of life in retirement – your financial security, your legal affairs, your housing choices, your medical insurance needs, and the best ways to communicate with your family so they will support your desires.

How do you begin the LifePlanning process? The first step is a simple one: register for a free, no-obligation LifePlanning Seminar, an information-packed session where many of your retirement questions will be answered. You can click here for dates, times and locations, and register online for the seminar of your choice, or contact us during the week and we’ll be happy to assist you. Then with your LifePlan in place, you can enjoy all that life has to offer, with a greater sense of confidence and security than you thought possible! We’ll see you at a seminar soon.

(originally reported at www.nytimes.com)

CBS: Reverse Mortgage is the “Rodney Dangerfield of Retirement”

We loved the question asked by this article that appeared a short while back on the website of CBS News. The article begins, “Aging boomers probably remember Rodney Dangerfield as the comedian who lamented, ‘I don’t get no respect.’”  Then CBS asks, “Are reverse mortgages the modern equivalent in the retirement planning world?”  In other words, is the reverse mortgage the Rodney Dangerfield of Retirement?

We have to agree that it sometimes seems so. Despite the wide availability of the reverse mortgage, also called an HECM or home equity conversion mortgage, the number of eligible homeowners who have taken out these loans is shockingly low – only about two percent. This is in spite of the fact that middle class Americans in the 65-69 year old age group generally have more equity in their homes than they have in other assets combined, according to the Center for Retirement Research at Boston College.

According to the Center for Retirement Research, the majority of retirees will only tap into their home equity when they finally sell their home in order to move – some to a smaller home, some to a retirement home or nursing home, and a surprisingly large number who move to a more expensive house. So why don’t more eligible homeowners explore the power of a reverse mortgage? CBS News says there are two chief reasons: the perception of high upfront costs, and the bad reputation these loans earned in many consumers’ minds when they first came on the market. Some of this negative image stemmed from disreputable lenders who used manipulative tactics to entice borrowers into taking out loans that failed to protect them and their spouses. But new regulations have eliminated much of the risk, and the costs are nowhere near as high as some people think.

The CBS News article cites a book written by retirement expert Wade Pfau, Professor of Retirement Income at The American College in Pennsylvania. In the book, called How to Use Reverse Mortgages to Secure Your Retirement, Pfau deals head-on with many of the biggest misconceptions people have about home equity conversion mortgages. Here are some of the issues where misunderstanding about reverse mortgages is the most persistent.

  • High Costs: Pfau says that reverse mortgages do have upfront costs just like any other loan, but competition is driving down some of these costs so shopping around is the best practice. Even with these costs, the power of an HECM to secure your financial freedom makes these loans worth the upfront expense.
  • Family Expectations: Some homeowners say they want to pass a debt-free home along to their children, so they are reluctant to consider a reverse mortgage. But Wayne Pfau suggests that careful use of a reverse mortgage can actually increase the legacy passed along to heirs if utilized properly.
  • Title to the Home: People still seem to think that a reverse mortgage means the title to their home is held by the lender, but this isn’t true. The homeowner retains the title, and the loan need not be repaid until the homeowner moves or passes away.

HECM rule changes in recent years have helped remedy two other issues that used to give reverse mortgages a black eye. In former days desperate borrowers sometimes spent down their home equity far too quickly, leaving themselves in worse financial shape than before, but now the government requires anyone taking out one of these loans to go through a counseling session to make sure they understand what they’re signing up for. Newer rules also limit how much home equity can be tapped and how fast. The other former trouble spot involved non-borrowing spouses who too often found themselves evicted because of the harsh terms of old-style reverse mortgages, a problem which was solved in 2015 with new laws ensuring spousal protection.

If you’re considering a reverse mortgage but need more reasons to say yes, the CBS News article cites several possible uses for an HECM that help show just how powerful and versatile these loans are. For instance, a reverse mortgage can eliminate your house payment, dramatically improving your cash flow in retirement. A reverse mortgage can provide the means to delay Social Security, giving you necessary income while allowing your government benefits to grow significantly. With a reverse mortgage line of credit, you can supplement your income during times when the stock market is in a downturn so you’re not depleting your other retirement funds when their value is low. Finally, one of the main advantages of a reverse mortgage is the freedom from worry that a reverse mortgage line of credit can bring: with this growing credit line in place, the retirement worries that plague many retirees are reduced dramatically.

With all those advantages, is a reverse mortgage right for you? There’s no simple answer to that question, because everyone’s situation is unique. But our view at AgingOptions has always been that the absolute best reasons to take out a reverse mortgage are (a) to upgrade your present home so you can age in place, and (b) to augment other financial sources so you can hire the in-home help you will probably need someday. Because we see the reverse mortgage decision as part of a larger discussion of retirement planning, the other stipulation we would make, says Rajiv Nagaich, is that your family has to be on board. “Before you take out a reverse mortgage,” says Rajiv, “our advice is that you have to have had a family meeting to make absolutely certain your loved ones will support your desire to age in place, and not allow the medical community to convince them otherwise.”   We’ll be happy to talk with you about how and when to have that all-important family conference – and the sooner you plan it, the better.

We also urge you to contact us at AgingOptions so we can refer you to a trusted reverse mortgage expert like our frequent radio guest Laura Kiel – someone whose number one goal is not to “sell” you a reverse mortgage but to give you professional objective advice so you can make the right decision.

We can help you make the right decisions when it comes to all aspects of retirement planning.  Is there a way that your financial plan, legal plan, medical plan and housing plan can all fit together? Is there a strategy to make certain your family is supportive of your wishes and has the means to carry them out as you age? The answer is yes, with an AgingOptions LifePlan, the most comprehensive type of retirement plan you’ve ever seen. Find out more by attending one of our free AgingOptions LifePlanning Seminars soon, and bring your retirement-related questions. Click here for information and online registration, or contact us for assistance during the week. We’ll look forward to meeting you soon.

(originally reported at www.cbsnews.com)