10-21-17 Aging Options (Hr 2)

2nd Hour-KTTH & KIRO

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Keeping Nursing Home Stays Short is in Everyone’s Best Interests

You’re 65 years old or older. You have to go to the hospital for a few days. Where will you go after you’re discharged?

Most of us would answer, “Home, of course.” But the fact is that 20 percent of seniors who are hospitalized end up being discharged to a nursing home. That’s what we discovered in this article from the age-related website NextAvenue.  The point of the article seems to be that, while some seniors may need a short term stay for recovery and recuperation, a significant number wind up in nursing care long past the 100 days that Medicare considers a “short stay.” A handful of states in the U.S. have implemented plans to reduce the odds that seniors will end up in nursing care against their will. “If you are hospitalized at age 65 or older,” the NextAvenue article states, “there is a one in five chance you will be discharged to a nursing home. If you’re lucky, your stay in the nursing home will be relatively short — fewer than 100 days. Whether or not that happens, however, may depend on the state you live in.”

It’s actually in everyone’s best interests to reduce our society’s reliance on nursing homes, the article says, because skilled nursing care is far and away the most expensive form of long term care.  NextAvenue quotes the 2017 Genworth Cost of Care report (we wrote about it in this recent AgingOptions Blog post) that prices the average semi-private nursing home room in the U.S. at over $85,000 annually. “The Genworth report also points out that two-thirds of Americans mistakenly think the government will cover most or all of this cost,” says NextAvenue. “On the contrary: Medicare pays for only a maximum of 100 days in a nursing home, and only after a hospital stay of at least three days. After those 100 days, patients get socked with the bill.” The sad result is that a significant number of seniors and their families will “burn through their savings and bankrupt themselves,” ending up on Medicaid (a program with severe financial troubles of its own). These skyrocketing costs, says the article, mean that “both families and the government have a huge incentive to keep people out of nursing homes in the first place.”

The NextAvenue article contains a link to a long and detailed report (you’ll find it here) co-authored by AARP, the Commonwealth Fund and the SCAN Foundation. The title – informative but not too exciting – is “State Strategies to Reduce the Risk of Long-Term Nursing Home Care after Hospitalization.” We didn’t read all 27 pages, but we did find a state-by-state comparison that shows how every state is doing in curtailing the number of new nursing home stays that end up becoming long-term – longer than 100 days. Washington State is in the top ten, just barely, with about 15 percent of new nursing home stays lasting more than 100 days. The best state is Arizona at about 9 percent, while the worst ones – those whose seniors have the highest odds of becoming unplanned long-term nursing home residents – are in the South: Texas (25 percent), Arkansas (27 percent) and the grand prize winner, Louisiana, where more than one-third of new nursing home admissions turn into long-term stays.

Several states are cited in the NextAvenue article for their innovative programs designed to help seniors stay out of long-term nursing home care. Oregon, for example, gives nursing home operators financial incentives to reduce excess nursing bed capacity and convert some of their efforts into assisted living, hospice care and home health care. In Minnesota, the state gives incentives to nursing home operators who successfully reduce their number of long-term residents, while also providing “community living specialists” who identify and assist seniors who are eager and able to return home. Connecticut offers financial assistance to home care services and makes it possible for those at varying income levels to receive in-home companion services, meals, minor home modifications and a host of other aging-related services, all on a sliding scale of costs. Meanwhile, Maine requires a medical assessment before a senior is admitted to a nursing home, and also gives residents and families a “community plan of care” detailing all the services they might be able to access as an alternative to moving into (or remaining in) a nursing facility.

The reasons to reduce reliance on nursing homes are much more than financial. “Beyond cost, most Americans want to age in their own home, or at least not in an institution,” says the NextAvenue article. As one author from AARP put it, “For the vast majority of them, [the goal] is to go back home or go back into the community. They want their privacy. They can eat when they want to eat. They can see who they want to see or not see them.  That’s all about quality of life.”

At AgingOptions we applaud these efforts and initiatives, but we also fear too few families are taking this issue seriously.  In the words of Rajiv Nagaich, this problem of seniors ending up in institutional care against their wishes “is going to be the new normal.” In Rajiv’s view, the challenges for those who fail to plan could get much worse. “Families will be increasingly burdened with caring for parents,” he says. “Medicaid benefits and availability will keep getting reduced. That’s why we emphasize proper education and solid support systems for seniors and their families.” The bottom line, says Rajiv:  “It’s absolutely essential to think these things through before a health-related housing crisis happens.”

All this is a solid argument for an AgingOptions LifePlan. LifePlanning is our unique approach to retirement planning in which all the key threads of retirement are woven together into one unbreakable cord: your financial plan, your housing plan, your medical plan, your legal plan, and even your plan to communicate your wishes with your family. Without a LifePlan, any crisis can cause your dreams of a secure retirement to unravel quickly. But with a LifePlan in place, you’ll be able to protect your assets in retirement, avoid becoming a burden to those you love, and – as the NextAvenue article suggests – escape the trap of unplanned institutional care.

The next step is a simple one: join us for a LifePlanning Seminar with Rajiv Nagaich. In just a few information-filled hours, Rajiv will answer many of your retirement questions – even those you didn’t know you needed to ask – and will explain how a LifePlan can protect you as you age. There’s absolutely no cost and no obligation. Click here for all the details, then register online or call us during the week. It will be our pleasure to demonstrate for you the unmatched power of an AgingOptions LifePlan.

(originally reported at www.nextavenue.org)

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It’s Time for Doctors to Stop Treating All Seniors the Same

If you’ve listened to our AgingOptions radio program or attended any of our LifePlanning Seminars, you’ve heard us sing the praises of geriatricians – those physicians specially trained to understand and deal appropriately with the unique and varied health care needs of seniors. It has been our experience that only someone with proper training knows how to listen and to patiently diagnose the physical, emotional, and psychological ailments that can be part of growing older. Sadly, it’s a skill too many health care providers appear to lack.

Now we have found another corroborating source to back up our point of view: this article that appeared very recently on the aging-related website NextAvenue.  It’s called “Why Doctors Shouldn’t Treat All Older People the Same.” The article cites a recent New York Times column that pointed out a significant shortcoming in how doctors treat seniors. “Health care systems have very distinct doctors and procedures for treating children vs. adults,” says NextAvenue. “But the division often stops there.”  In traditional health care, anyone over age 65 is lumped into one category called “geriatric,” a one-size-fits-all label that fails to take into account what the article calls “the vast differences between those in their late 60s or 70s and those in their 80s or 90s.”

In the Times column (here’s the link), a California professor of medicine named Dr. Louise Aronson argues that the health needs of older adults are “much more nuanced” than the medical community likes to admit. Aronson cites as one prime example the guidelines for vaccinations that are provided by the Centers for Disease Control and Prevention.   The CDC has more than a dozen subgroupings of vaccine recommendations for children, and five for adults. But everyone 65 and older ends up tossed into one single vaccine subgroup. “That means,” says the NextAvenue article, “that a 65- or 70-year-old is viewed essentially interchangeable health-wise with someone in their 80s or 90s. And this is regularly how older adults are seen through a medical lens.” But this stereotyping of all seniors into one medical subgroup is both inaccurate and potentially dangerous. “Those two groups — the ‘young old’ and the ‘old old’ — don’t just differ in how they look and spend their days; they also differ biologically,” Aronson writes. “As a result, it’s likely that we are incorrectly vaccinating a significant number of the 47 million Americans over 65.”

We looked at the New York Times column and were impressed by just how strongly Dr. Aronson feels about this problem of stereotyping older adults, something she calls “a larger failing in our health care system.”  She lambastes the medical establishment who sees no difference between a 65 year old and a 90 year old: they’re acting “as if bodies and behaviors don’t change over the last half-century of life. You don’t need to be a doctor to see that this is absurd. Just as we don’t confuse toddlers with teenagers, or young adults with their middle-age parents, so, too, are we able to distinguish 70-year-olds from the nonagenarians a generation ahead of them.”

In the Times piece, Dr. Aronson also laments the fact that seniors are poorly represented in medical studies. “The sad fact,” she writes, “is that we frequently don’t know how to best care for the old. Treatments rarely target older adults’ particular physiology, and the old are typically excluded from clinical studies.” This bias against older adults has multiple root causes. “Sometimes they are kept out based on age alone, but more often it’s because they have one of the diseases that typically accompany old age. And yet we still end up basing older people’s treatment on this research, because too often it is all we have.”

There are several glaring examples of problems with vaccines and other treatments cited in the New York Times and NextAvenue articles, and we encourage you to review them both for your own sake and for the health of those you love. In the Times, Dr. Aronson suggests two immediate and relatively simple steps that would help reduce the stereotyping of seniors. “First,” she writes, “whenever we apply something to people by age and are tempted to divide the life span into just childhood and adulthood, we should add oldhood to the list as well. Second, the National Institutes of Health should require that older adults be included in clinical studies, just as it already does for women and minorities.” We think these are both good ideas.

It was her final statement in the New York Times column, however, that really caused us to nod in agreement.  She writes that the time is long past for society to stop dividing life into two parts, “childhood” and “adulthood.” As Dr. Aronson put it, “Life is a three-act play. It’s time our medical system reflected that truth.”

Our number one goal here at AgingOptions is to see our clients, radio listeners and seminar guests enjoy their senior years – the third act of that three-act play – with good health, vitality, purpose, dignity and security. Getting the right medical care is a vital component of that kind of retirement, which is why we urge you to contact us so we can refer you to a geriatrician in your area. But there’s much more to what we call “LifePlanning” than just good medical care. Protecting your assets in retirement requires a sound financial plan. Avoiding unwanted institutional care means you’ll need to plan for your future housing need. You’ll also need solid legal protection to make certain your wishes are honored and your estate protected, and a plan to communicate all this to your family to they’ll be knowledgeable and supportive of your desires as you age. Only an AgingOptions LifePlan combines financial, medical, legal, housing and family plans into one master blueprint. We encourage you to find out more about this breakthrough approach to retirement planning by attending a free, no-obligation AgingOptions LifePlanning Seminar with Rajiv Nagaich. It could be the most important two hours you’ve ever spent when it comes to planning your retirement future.

For dates, times, locations and quick online registration, click here for our Upcoming Events page, or call us for assistance during the week. We might not be able to reform the medical care system in the U.S. – but we can certainly help you be better prepared for whatever the future may bring your way. Age on!

(link to www.nextavenue.org and www.nytimes.com)

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When Should You Worry about a Loved One’s Memory Loss?

How much of memory loss is “a normal part of aging,” and how much should be cause for concern? That’s a question we hear frequently at AgingOptions and it’s one you have probably asked yourself if you have walked the journey of aging alongside a parent, spouse or other loved one. Because dementia is such a topic of concern among today’s seniors and those who love them, we found this recent article from Time magazine to be both helpful and important.

“Roughly 9% of Americans have dementia,” says Time, which the article defines as “a loss of intellectual function that is severe enough to interfere with day-to-day life.” The most common evidence of dementia is memory loss or confusion, but other manifestations can frequently appear including “poor hand-eye coordination, problems with tasks like cooking or operating a computer, or mood and behavioral changes ranging from depression to hostility.” In survey after survey, dementia (of which Alzheimer’s disease is the most widely-known form) is the health crisis seniors fear the most. Given this level of concern, then, we were intrigued to read one statement in the Time article from Dr. Paul Fishman, a professor of neurology at the University of Maryland Medical Center, who stated that “Dementia is very common, and in general it is under-diagnosed, rather than over-diagnosed.”

In other words, people tend to write off signs of cognitive impairment as “normal parts of aging” and may be too quick to dismiss the notion that mom or dad’s memory loss is evidence of something more serious going on.

So when should you as a loved one ignore some of these signs and when is it time for greater concern? “The number-one red flag a child or caregiver needs to watch out for is change,” says Time. “If someone is acting differently than they used to, that’s good reason for them to see a doctor for an evaluation, (Dr.) Fishman says.”  This change can appear in a variety of ways: you may notice that basic tasks your parent used to do now seem to be causing them more difficulty – for example, following a familiar recipe or balancing a checkbook. A loved one who has always been independent may start showing signs of difficulty with potentially dangerous activities like driving a car. We know of one woman who realized her mother’s cognitive decline had taken a more serious turn when the family arrived for a holiday meal only to find the mom (and most of the food) completely unprepared – a major (and ominous) change from her typical behavior. If you’re concerned about a parent, this may be a good time for you and your siblings to compare notes, asking “How does dad seem to you?” or “Do you notice anything different about mom’s behavior lately?” If you’re perceiving a change, chances are others are, too, and it’s probably time for a professional evaluation.

It’s important not to wait to get that evaluation, says Time magazine. “Even if your parent is relatively young—in her 50s or 60s—don’t ignore memory slips or new symptoms. While rates of dementia really balloon once a person reaches age 80, about 10 percent of dementia cases are diagnosed by age 65—and for some, the loss of function sets in earlier.” The article says that, if the diagnosis is dementia, the most common cause will be Alzheimer’s disease (in about 60 percent of dementia cases). But one of the chief reasons to get your loved one in for a medical evaluation early on is that some of the conditions that can cause cognitive problems are actually treatable and, in many cases, reversible. Says the Time article, “These include everything from an undiagnosed stroke to a thyroid condition or medication side-effects. This fact—that many cases of dementia are caused by fixable, non-Alzheimer’s sources of impairment—may be a good way to coax a parent into visiting a doctor for an assessment, which can be a tricky conversation for kids and caregivers.”

The challenge of having such an awkward and potentially touchy conversation with your loved one may be the biggest impediment of all when it comes to getting an accurate diagnosis of the causes of cognitive decline. “Talking about dementia with a parent is often more difficult than spotting the warning signs,” says the Time article. This is made worse because dementia impairs a person’s insight, so “a loved one who’s struggling may not recognize his symptoms or acknowledge that there’s an issue.” This can make them dismissive, angry, even paranoid. Needless to say, the fear of this kind of hostile or suspicious reaction from a parent is enough to cause many adult children to avoid the topic entirely until the issue becomes too severe – or even too dangerous – to ignore.

One recommendation from the Time article, if you fear a hostile reaction from a parent with cognitive problems, is to call your mom or dad’s doctor to let them know about your concerns. The doctor may not be able to discuss specifics with you due to privacy restrictions, but he or she can be alerted by your call to perform an assessment and take appropriate steps at your parent’s next visit. “That evaluation will include some form of cognitive assessment—either quick or in-depth, depending on the person’s symptoms—and may also entail blood work or other tests to rule out non-Alzheimer’s factors,” explains Time.  “The most important message,” the article emphasizes, is “don’t dismiss memory problems or other symptoms as run-of-the-mill aging.” Even for a loved one in her 70s or 80s, “a loss of cognitive ability that interferes with function is not normal.” If your parent needs help, you can ensure they find it, and it’s essential that you do.

One place to begin is with a call to AgingOptions. By discussing your situation with us, we can make one of several referrals – for example, your parent will almost certainly benefit from hiring a geriatric physician to act as “quarterback” for their health care needs. Also called a geriatrician, these professionals are trained to work with seniors and to provide careful and accurate diagnosis. We also suggest you consider scheduling a family conference, conducted by our highly-trained AgingOptions professional staff, so that everyone – mom, dad and siblings – will have a clear understanding of future caregiving roles, obligations, and expectations, and a better awareness of your parents’ wishes.

Finally, we strongly recommend you join us soon for an AgingOptions LifePlanning Seminar with retirement expert Rajiv Nagaich. Invest just a few hours in one of these information-packed sessions and you’ll discover how finances, housing, legal, medical and family aspects of retirement can all be meshed together into one seamless plan – a LifePlan. This link will take you to our Upcoming Events page where you’ll find all the details plus online registration – and remember, there’s no cost or obligation. Protect your assets, retain your independence and avoid burdening those you love, with an AgingOptions LifePlan.

(originally reported at www.time.com)

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Veterans, Beware: Scam Artists are Targeting Your Pension Benefits

Veterans Day is still some weeks away, but we felt it was timely to remind all our Blog readers and radio listeners – and especially you veterans who have served your country so faithfully – that there are unscrupulous and shameless scam artists out there trying to defraud you from your savings, your security, even your identity. Here at AgingOptions we frequently hear from clients and radio listeners asking us about some enticing new offer, investment or scheme they’ve received in the mail or read about online. Seniors are considered to be especially vulnerable to fraud, since as a group seniors tend to be more trusting, more polite, more willing to listen to appeals over the phone, and more inclined to read offers that come in the mail. Financial fraud against seniors is a national epidemic.

Now there’s a new type of con, targeting not just seniors, but aging veterans – and as with any such criminal enterprise, senior vets and those who care for them have to be careful. These “too good to be true” scams may always be lurking inside the next phone call or direct mail solicitation, and the fact that they’re designed to steal hard-earned pension funds from veterans in need makes these frauds particularly insidious.

We found a story, reported last year on the Blog website of the AARP but still extremely current, warning readers of some of the newer scams being perpetrated on those who have served in the military. There are several of these scams cropping up from time to time.  In our research we also found information on this topic on a website called www.stopfraud.gov, which is maintained by the federal government’s Financial Fraud Enforcement Task Force. This site lists a wide range of frauds and scams, including several targeted specifically at veterans: charity scams, phony credit monitoring services, payday loan and cash advance scams, and scams design to cheat vets out of their hard-earned pensions. This website provides links to resources available to assist you.  It really is a wealth of helpful information if you feel a friend or loved one is being victimized.

The AARP article on fraud against veterans focuses primarily on one of the more common veteran scams, which the government website calls the Pension Scam. An unscrupulous financial planner or attorney will contact an aging veteran and offer to replace the vet’s future pension earnings with a lump-sum payout amount. To some vets, especially those who are financially strapped, this offer sounds tempting – after all, why not take the cash now instead of seeing it come in slowly, month after month? To sweeten the pot, the offer generally promises access to other benefits for which the vet may not otherwise qualify.

Here’s how the government website www.stopfraud.gov describes the Pension Scam:  “Unfortunately, veterans and their families are targets for some dishonest advisers who claim to offer free help with paperwork for pensions. In short, the scheme can involve attorneys, financial planners, and insurance agents trying to persuade veterans over 65 to make decisions about their pensions without giving them the whole truth about the long-term consequences. The unscrupulous brokers claim to help veterans qualify for Aid and Attendance benefits, but in fact may cause them to lose eligibility for Medicaid services or cut off victims from their money for a long time.”

The AARP article explains in more detail about how the promise of these extra benefits seldom comes true. Instead the vet is left in much worse financial shape than when the so-called financial advisers launched their scheme. According to the Federal Trade Commission, quoted by the AARP, “These so-called advisers may claim to be veterans to gain your trust, and they appeal to your emotions to create anxiety and apprehension about your future. As a rule, they leave out important details.” Tragically, says the FTC, “if you follow their advice, you’re likely to end up without the supplemental pension benefits they promise, disqualified from other government benefits, and stuck in a financial investment that’s not in your or your family’s best interest for the long term.”

So our advice for veterans and their loved ones – and for all seniors – is to be extremely cautious and skeptical about any financial scheme that targets your pension or your retirement savings. Before you act, always seek good advice from a trusted source. Here at AgingOptions we will gladly be that source for you: not only are we extremely familiar with Medicare, Medicaid and VA programs, but we can also refer you to trusted financial advisers who will help you evaluate any course of action that could put your future in jeopardy.

Remember, too, that our services cover far more than your finances: our retirement planning strategy provides you with the most comprehensive type of planning we’ve ever found. We call it LifePlanning, and once you discover the power of a LifePlan, you’ll think about retirement in a whole new way. Your LifePlan will help you ensure your financial security, but it also does much more. Financial planning alone cannot prepare you adequately for your retirement years – in fact, this type of one-dimensional “planning” can be a recipe for disaster, because it ignores so many of the other critical facets of retirement! In addition to giving you a financial blueprint, a LifePlan also helps you decide which housing options are best for you. It ensures that your legal affairs are in order and your medical needs will be thoroughly met. Your LifePlan even helps you communicate with your family so that they understand and will comply with your wishes.

Why not take the next step and find out if this comprehensive approach to retirement planning is right for you? Attend one of our free LifePlanning Seminars, held at locations throughout the area. For our current listing of upcoming seminars, click here, then register online, or contact our office during the week and we’ll be glad to assist you. It will be our pleasure to meet you at a LifePlanning Seminar soon!

(originally reported at http://blog.aarp.org)

 

 

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10-14-17 Aging Options (Hr 1)

1st Hour-KTTH & KIRO

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10-14-17 Aging Options (Hr 2)

2nd Hour-KTTH & KIRO

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It’s Time for Medicare Open Enrollment – and some Objective Advice

Ah, October: the weather is cooler, the nights are longer, the leaves are turning color, and it’s Medicare Open Enrollment Time. (That may explain why you see so many older adults walking around with perplexed expressions on their faces at this time of year.)

Medicare Open Enrollment for the 2018 calendar year begins October 15 and runs through December 7, 2017. This is the one time of year (for most people – there are some limited exceptions) when qualified seniors 65 and older can change their coverage by switching between original Medicare and Medicare Advantage (offered by private health insurance companies) or switching from one Medicare Advantage plan to another. Naturally when this season comes around you’ll find a host of articles designed to help the decision-making process seem less daunting. However, you’ll need to be careful, because some of those “helpful” articles aren’t objective after all – many are actually written by companies with products to sell. (Remember, you can always find plan comparisons for your zip code by using the Plan Finder at www.medicare.gov.)

We found two recent articles that seem reasonable and objective, articles that could be helpful for seniors analyzing their Medicare options. The first article is this one from the website USNews, called “9 Questions to Ask Yourself during Medicare Open Enrollment,” and we’ll list these nine in a moment. The second is from our friends at AARP. As they often do, the organization devoted a significant portion of the October AARP Bulletin to Medicare decision-making, including a handy chart to help seniors decide whether Medicare Advantage or a so-called Medigap Plan is the best way to go. Choices like these, writes AARP are critical: “[They] could save you hundreds, perhaps thousands of dollars a year and could well determine the quality of your health care, and your health, for years to come.”  But making the right choice is not only important, it’s also complicated.  “These plans change a lot from year to year,” says Leigh Purvis, director of health services research with the AARP Public Policy Institute. “You can leave hundreds of dollars on the table if you’re not in the right plan for you.”

So, like millions of seniors, you have a limited amount of time to make a potentially major medical and financial decision. Where should you start? You might want to take a look at the article from USNews and review their list of nine helpful questions. The answers will hopefully guide you as you evaluate your options. Here’s the list:

  1. “Did you have problems with your plan last year?” In the words of USNews, “Seniors who had a positive Medicare experience last year may have little reason to change coverage, assuming there have been no significant changes to the plan benefits or their personal situation.” However, the article adds, “If your current plan isn’t meeting your needs, now is the time to make changes.”
  2. “Can you afford your current plan?” Answering this question demands you look past the premiums to include co-pays, deductibles and prescriptions. Don’t buy more coverage than you can afford, or less than you really need.
  3. “Do you want supplemental coverage?” If you do, you’ll find that switching back and forth between Medicare Advantage and Medigap coverage carries some restrictions.  Before you leave your current plan, make sure you can continue to get the coverage you need, especially as your health care needs change.
  4. “How much traveling will you do next year?” Medicare Advantage plans tend to be less expensive but they restrict the doctors you can see. Make sure your plan provides “portable” coverage if you’re expecting to be away from home a great deal, or if you divide your time between homes in separate states.
  5. “Were you recently diagnosed with a new illness?” If so, make sure your present plan will provide the coverage you’ll need down the line. You may want to seek out a plan that provides case management, especially if you’ll be going through treatment for a long time. Now is the time for that critical analysis.
  6. “Will you need dental or vision coverage?” Original Medicare doesn’t generally cover these important services, while many Medicare Advantage plans do.
  7. “Do you need a separate prescription drug plan?” Perhaps your situation has changed since last year. Make sure you consider this question, along with the next one, to make certain you don’t leave yourself unprotected.
  8. “Are your prescriptions covered?” As your prescriptions change, says USNews, you might need to switch Part D plans. Make sure you consult with your doctor about your present and future needs and choose your plan accordingly.
  9. “Do you need help finding the right plan?” The article suggests that you might.  “Just as people seek advisors to help them plan their finances, there are agents who can help clients select the best Medicare option possible,” says the USNews But make sure you select someone objective. “The last thing you want to do is work with an agent who only works with one client,” says wealth adviser Chris Alberta. “In that case, chances are a person will be directed to the client’s product rather than the best plan possible.”

We strongly suggest if you’re feeling overwhelmed by your options that you contact our AgingOptions office so we can provide the assistance you need. Don’t try making important decisions involving medical coverage without getting some objective advice. That also goes for all your retirement planning, because typical “one-dimensional” planning that focuses solely on finances is simply not enough. A truly comprehensive retirement plan considers finances, medical care, legal protection, housing options and family communication, so that every facet works with and reinforces the others. We call that type of retirement plan an AgingOptions LifePlan. If you’re ready to get serious about retirement planning, or even if you’re years away from retirement but starting to look ahead, we invite you to join us for an information-packed LifePlanning Seminar, a free session with Rajiv Nagaich where you’ll discover retirement planning like you never thought possible.

For information and online registration, this link will take you to our Upcoming Events page where you can select the seminar of your choice. We’ll look forward to seeing you soon. And remember, if Medicare Open Enrollment is starting to look like a maze, call AgingOptions so we can steer you toward the decision that’s right for you. Age on!

(originally reported at https://money.usnews.com and www.aarp.org)

 

 

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Who Should Get an HECM? Solid Answers to Common Questions

With all the articles we’ve read and conversations we’ve heard here at AgingOptions about the Home Equity Conversion Loan, or HECM – commonly called the reverse mortgage – the question millions of older homeowners are still asking themselves is simple: “Is a reverse mortgage right for me?” We can’t count the number of times we’ve been asked that question, on the radio, in a seminar on at our office, and our answer is typically, “It depends.” Everyone’s situation is unique and a reverse mortgage, while a Godsend for many, is by no means right for everyone, and we tend toward a more conservative view of this issue, as we’ll discuss below.

In our local Seattle Times on a recent weekend we discovered this insightful and well-written article by a man named Jack Guttentag who called himself “The Mortgage Professor.”  In fact, that title isn’t far off the mark: Guttentag is a Professor of Finance Emeritus from the Wharton School of Business, and what he has to say about reverse mortgages seems to us generally well balanced, with a few caveats. His views seem to represent yet another financial expert who is now an outspoken believer in the power of this versatile financial tool called an HECM.

The first question he tackles in the Times article is, “Which seniors should reject a HECM, and which should consider one?”  Guttentag identifies three broad categories of seniors for whom a reverse mortgage is probably the wrong financial solution:

  • Seniors whose financial situation is so secure that a reverse mortgage is unnecessary;
  • Seniors who are determined to pass a debt-free house to their heirs;
  • Seniors who want those presently living in the house to be able to keep living there after the homeowner’s death – family members other than a spouse who are too young (below age 62) to qualify for a reverse mortgage.

If you fit into one of these three categories, the Mortgage Professor says you should “say no” to a home equity conversion loan. However, we might argue that you should at least (pardon the pun) do your homework and talk to a qualified, objective reverse mortgage expert before you make that decision. Don’t rule out the power of a reverse mortgage until you’ve gotten some unbiased professional advice, because your financial circumstances may change, and there may be a way to solve some of the other impediments standing in your way.

How about the many seniors who, in the words of Jack Guttentag in the Times, should say yes to an HECM? This is a much longer list, and we won’t include every one of the ten criteria he mentions, but here’s a sampling. According to this article, you might want to look into a reverse mortgage if:

  • You expect your retirement income to drop but your mortgage payments to continue;
  • You’re living on Social Security or a small pension and need an indefinite source of supplementary income;
  • You’re worried that your retirement nest egg won’t last through your retirement years;
  • You need a way to manage unexpected expenses, especially if you’re on a fixed income;
  • You want to delay Social Security but need income now to bridge the gap while you wait.

If any of that sounds like you – and we think those conditions and many of the others listed by Guttentag in the Times article apply to a large number of retirees – then the reverse mortgage could, he suggests, be a big part of the solution to your financial worries in retirement. But we would add a few cautionary notes. As Rajiv Nagaich says, “Our view is that anyone who desires to live in their current home – after they’ve made sure that the home is age-friendly and that their family or other care workers will be there to support them when they need it – should get a line of credit established. I see the line of credit as a hedge and a financial tool.  But some of the other uses suggested in this article, such as need for basic income, should be approached with caution because in my view it’s better to avoid depleting the last asset you have, which is your home.” Rajiv recommends that low-income seniors explore rent-controlled housing, and then be ready to move to a care facility at a later time, as potential HECM alternatives.

The article is written in a Q&A format, so it deals with some of the basics of an HECM. For example, Guttentag explains why a reverse mortgage is called by that name: it’s because in a reverse mortgage the loan balance starts out low and grows over time which is just the opposite of a standard mortgage. He also answers the common question, “Does taking a reverse mortgage result in no home equity passing to my heirs?” The answer is, possibly, but probably not: it depends on how the borrower uses the reverse mortgage, how long the borrow lives, and how much the home appreciates. These are all scenarios that a reverse mortgage professional can review with you so you and your family will know what to expect.

Finally, for those among us who are procrastinators, the Times article wraps up with this question: “What are the advantages and disadvantages of waiting before taking out a reverse mortgage?”  Guttentag’s reply: if you wait to take out an HECM, you’ll generally be able to draw out more because you’ll be older. You might be able to borrow more because your home has appreciated. “However,” he writes, “both of these effects can be swamped by a rise in interest rates, which reduces draw amounts. The best strategy for borrowers who have no current need for funds but anticipate that they will sometime in the future is to take a credit line now and let it sit unused while it grows in size. That way, if market interest rates rise, the reduction in draw amounts that results will be at least partially offset by a rise in the unused credit line.”

Our recommendation is for you and your spouse to read articles like the column by the Mortgage Professor, and then to sit down and consult with a trusted expert like Laura Kiel, whose services we endorse. Only by spending time going over your own situation can you make a decision that best suits your needs. If you’ll contact us at AgingOptions we’ll gladly refer you to Laura, because we know you can rely on the professional information she’ll provide to you. But remember that decisions such as whether a reverse mortgage is right for you should not be made in a “planning vacuum.” Instead, you need the type of holistic approach to retirement planning that we practice here at AgingOptions. With our strategy called LifePlanning, we combine all the elements of your life in retirement – finances, housing, medical care, legal affairs and family communications – into a well-crafted LifePlan, one in which all these parts mesh together seamlessly. There’s no other retirement plan like it.

There’s a simple, no-obligation way to find out more: come see Rajiv Nagaich at an upcoming AgingOptions LifePlanning Seminar. These free events held throughout the area take just a few hours but will start you on the road to a retirement that is truly joy-filled and secure. You can click here for details including online registration, or call us for assistance during the week. It will be our pleasure to show you the power of an AgingOptions LifePlan.

(originally reported at www.seattletimes.com)

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Saving for College Instead of Retirement? Time to Re-Think Priorities

Do you think saving for your children’s college education takes precedence over saving for your own retirement? If you do, you’re not alone – but you may be making a major mistake, with a big price to pay down the line when you do eventually retire. That’s the conclusion from this very recent article that appeared on the website of Bloomberg News (it also ran in several newspapers around the country including our own Seattle Times). Written by Bloomberg columnist Megan McArdle, the advice in the column is crystal clear, right there in the title: “Save for Retirement Before You Even Think About the Kids’ College Fund.” As McArdle says, “It’s easy to borrow for college. It’s not so easy to borrow for the decades after your working life.”

In researching her Bloomberg article, McArdle turned to an annual survey put out by investment firm T. Rowe Price called “Parents, Kids and Money.” She noted what she called “an alarming factoid”: more families have college savings plans than retirement savings plans. What’s more, fully two-thirds of responding families told T. Rowe Price that they prioritized saving for college over saving for retirement. “If this describes you,” McArdle writes, “it’s time to rethink your priorities. Saving for retirement is a necessity. Saving for college is something optional that you do after you make sure you’ll have food and shelter in your old age.”

McArdle uses a clever analogy to describe the situation: the oxygen mask warning we hear every time we fly. What does the instructional video always tell you to do? “Attend to your own oxygen mask before you turn to your kid,” says McArdle. “This is not because airlines care less about kids than they do about the passengers with the credit cards. It’s because someone who has passed out from anoxia is not much use to their kid or anyone else.” Her conclusion is spot on, in our view. “Taking care of yourself is part of being a good parent. If you don’t do it, your kids will have to, and they may not be up to the job.” McArdle adds, “This is simply common sense. But the evidence suggests that this bit of common sense is eluding a lot of parents.”

Here at AgingOptions we believe in telling it like it is when it comes to planning for retirement, not sugar-coating the facts, which is why we think McArdle’s Bloomberg piece is important to consider. As she puts it, many of her friends (and many of our radio listeners and seminar guests) seem to think they can start saving for retirement after the kids are out of college.  McArdle said she heard this recently from a friend whose youngest child would not be out of college until the friend turned 57.  McArdle blasts this type of non-planning as “magical thinking. Fifty-seven is a good age to start planning what you will do in your retirement, but it is a terrible age to start saving for it,” she says. “You have almost no time for the money to grow, which means that to enjoy a decent standard of living over a 20-year retirement, you would effectively need to be saving more than your salary each and every year. This is not a viable plan.”

She also questions the assertion some people make that they’ll just keep on working indefinitely. McArdle writes, “It’s a splendid idea if you can manage it – but a lot of people can’t manage it. They get sick. Or their company makes them redundant, and they can’t find a new job (age discrimination is terrible, and should be fiercely combated, but it is nonetheless a reality you need to take into account in your own savings plans). Or their spouse gets sick and needs more caretaking than can be accommodated by their career. There are a dozen reasons why you cannot – let me reiterate cannot – plan on ‘working until the age of 75’ as your retirement strategy.” Those are some pretty direct and unambiguous words!

The consequences of failing to save for retirement will not only impact you, they’ll also impact your loved ones. While many live on Social Security as their primary – or even only – source of income, those benefits are usually not that generous. “So probably,” says Bloomberg’s McArdle, “you’re going to have to ask the kids for help, just at the time when they’re dealing with the financial and emotional struggles of starting their own families. This is madness.” After all, as she puts it, there are other ways to fund college, but precious few options for funding retirement. “Your kids can get scholarships or borrow for college; you cannot use these means to finance your retirement.” She concludes, “That’s why you need to be saving enough, every year, to provide a comfortable retirement, before you even think about opening a college savings account.”

The Bloomberg article is extremely clear and well-written, and should be shared with your immediate family, ideally in a family conference. That’s a time where you can all come together in a neutral setting – such as our AgingOptions offices – and make certain everyone understand your priorities for the future. Unless you plan now, using the type of comprehensive LifePlanning exclusively offered by AgingOptions, you’ll find yourself in a very tenuous predicament at retirement time, unable to protect your assets or to avoid becoming a burden to those you love. By contrast, a LifePlan takes family communication into account and incorporates housing, financial, medical and legal planning into one well-crafted retirement blueprint. An AgingOptions LifePlan is your key to a fruitful and secure retirement.

Find out more by joining Rajiv Nagaich soon for a free, no-obligation LifePlanning Seminar near you. Click here for all the dates, times and locations, then register online or call our office for assistance. Make sure you have your priorities straight as you prepare for your retirement years! Come be our guest at an AgingOptions LifePlanning Seminar.

(originally reported at www.bloomberg.com)

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