AgingOptions Life Plan: Finance

“Will I have enough assets in order to not run out of money before I run out of life?” is top of mind for all of us in the final third of our lives. In answering this, preservation, positioning and passing of accumulated wealth goes beyond traditional estate planning. It calls for all affected family members to be participants in a model that integrates health, housing and elder law considerations.


Senior Living Costs on the Rise, Outpacing Inflation

According to a newly released nationwide survey, costs for rent at senior living facilities across the U.S. are on the rise, with the West and South seeing the biggest increases. That’s the news from an article we recently discovered on the website www.NextAvenue.org.

You can click here to read the article. We think this is important information for seniors to have as they make their plans for a financially sound retirement, since the cost of senior housing can often be an unpleasant surprise.

The new data from the firm A Place for Mom shows that, from 2014 to 2015, median costs for rent and care at communities for older adults rose at a rate that’s 1.5 times the rate of inflation, an average hike of just under $100 per month. At the same time the study showed a wide variation in charges, with average monthly costs differing by more than $1,000 between, for example, Chicago and Tallahassee, Florida.

As a helpful feature, the article includes a link to an interactive tool that families can use to compare costs in various geographic areas. Consumers can also track how costs are trending in various areas of the country.

Here in Seattle, we rank about in the middle of the Top 15 cities based on 55-plus population. The median monthly cost for assisted living in Seattle, according to the survey, is nearly $4,400. This is almost $1,000 less than highest-priced Washington, D.C., but at least $1,000 more expensive than lowest-priced Tampa, Florida. On average our region is costlier for seniors than Chicago, Los Angeles, or Phoenix, but less expensive than Boston, Philadelphia or Minneapolis, for example.

“What we’re trying to do is put this information in consumers’ hands so that they can better plan for the future,” said Charlie Severn, vice president of brand marketing for A Place for Mom. “This is such a highly emotional subject for families, and when they have the ability to do the research up front and plan, ultimately it’s a better outcome for families.”

We think this information is important as you look ahead to your retirement future, especially because many seniors underestimate the cost of senior housing. Here at AgingOptions we counsel our clients to plan carefully for all aspects of retirement, including housing choices, financial plans, legal affairs, family relationships and health care needs. By taking all these into account, your retirement plan can help you protect your assets and avoid becoming a burden to your loved ones.

But where do you begin? The best suggestion we can make is to invite you to attend one of our free LifePlanning Seminars. These information-packed sessions take place at convenient times, in locations throughout the area. A LifePlanning Seminar will provide a valuable overview of all the key aspects of a solid retirement plan. However, space at these popular LifePlanning Seminars is limited, so we urge you to register today for the date and time of your choice.

Click on the Upcoming Events tab on this website for all the details. Then come with your questions about retirement. We assure you that you’ll come away armed with a fresh new approach to retirement planning, and a newfound confidence as you consider your future years. It will be a pleasure meeting you!

(originally reported at www.nextavenue.org)

What Spouses Should Know About Social Security

Because we work in the retirement field, we deal with Social Security rules and regulations every day. But for most retirees, Social Security still contains a great deal of mystery. That’s why we’re always happy to suggest helpful resources like this article about Social Security from the financial website Motley Fool (www.fool.com).

The article is called “What Spouses Should Know about Social Security,” and it explains in clear language how spousal benefits for Social Security work. These benefits can make a big, big difference in a retiree’s income. As Motley Fool explains, “Depending on the age at which you claim spousal benefits, the amount could be worth a maximum of half of your spouse’s full retirement benefit, so it’s important to know the details of how it works.”

We won’t go into all of those details here. The article explains some of the stipulations, and of course we’re always ready to answer your specific questions, either at one of our LifePlanning Seminars (see below) or during a visit here at our office. But there are a few basics that are helpful to know.

For example, in order to qualify for spousal benefits, you need to be at least 62 years old and your spouse needs to be collecting his or her Social Security benefits. (The only exception to the 62-year-old age threshold involves certain dependent care situations.) If you qualify for spousal benefits, Social Security will first calculate how much of your own earned payment you’re entitled to receive, and then add the difference between your own earned benefit and the spousal benefit. You’ll always receive the higher amount.

How much is the full spousal benefit? It’s one-half of your spouse’s full retirement benefit. For couples where one spouse has earned significantly more than the other, this can make a significant difference in household income, so it’s highly important to your future financial planning.

There’s another important point in the article: taking spousal benefits after you turn 62 but before full retirement age permanently reduces your spousal benefit. In general, the longer you wait to draw Social Security benefits, the better: every year between age 66 and age 70, for instance, benefits rise 8%. But the decision about when to take benefits is a highly personal one, dependent in part on your financial needs and the state of your health, among other considerations. We can review those options with you.

It’s true that planning for retirement can seem confusing, even daunting. Retirees ask, “How can I protect my assets in retirement? What housing choices are best for me? Will I be able to afford health care? Does my family understand my wishes? How do I make sure my legal affairs are in order?” We can help you find answers to these and a host of other pertinent questions. Why not start by attending one of our free LifePlanning Seminars? These information-packed sessions take place at locations throughout the region. Click on the Upcoming Events tab on this website and register for the LifePlanning Seminar of your choice.

At any time if you would like to contact us to discuss Social Security – or any other aspects of retirement – please call for an appointment. It will be a pleasure working with you.

(originally reported at www.fool.com)

If You’re About to Re-Marry, Here are Four Money Moves to Make Now

Are you about to embark on a second marriage? Congratulations! It’s wonderful to rediscover wedded bliss after divorce or the loss of a spouse.

However, in the midst of planning for the celebration, there’s another plan you need to make – a financial plan. Protecting your assets, for yourself and your heirs, is vital, and a second marriage can create a host of unexpected pitfalls if you don’t prepare.

We highly recommend this helpful article published some months ago on the website MarketWatch.com. It’s called “Smart Money Moves to Make Before a Second Marriage.” As the writer puts it, having an open and honest financial conversation before you marry is especially important for second marriages. “The requisite prenuptial financial meeting can be even more important the second time around,” the article says, “when both spouses may be more advanced in their careers, with significant assets and, perhaps, children to plan for.”

The author lists four specific financial actions to take before you walk down the aisle. These tips are simple, but essential if you want to protect the assets you’re counting on in your senior years – and perhaps those you plan to pass along to your heirs.

The first suggestion: before you re-marry, put all your financial cards on the table. This includes “coming clean” about assets, liabilities, tax returns and investment statements. You may even need to arrange a pre-marital meeting between your respective financial advisers, depending on your situation. Openness now builds trust later.

The second idea is to explore what the article calls “your money personalities.” If you’re the frugal one, you don’t want to be surprised to learn that your new spouse is a spender. “Merging your financial philosophies can be especially difficult,” says MarketWatch. “The key to success is gaining some appreciation for each others perspective and strengths.” Then you can design your household financial management around each spouse’s fiscal strong suits.

Suggestion number three involves setting joint financial priorities, something that some couples assume but never adequately explore until conflict arises. Again, these issues can be especially acute in a second marriage where both spouses are older, usually with more assets on the line and adult children to consider. You’ve got to figure out how to work together as a financial team. Says MarketWatch, “Disagreements can range from the size of a mortgage to carry to the amount of risk to take with your investments to how much you’ll each contribute to your children’s college education.” Decide what the new rules and guidelines will be and then stick to them!

Finally, the article concludes with a suggestion we heartily endorse: update your wills and other legal documents. There are many ways to provide legal protection for yourself, your new spouse and your adult children, but if you fail to plan you open yourself and your heirs up to serious pain and potential disputes that can tear families apart. We discussed this on our AgingOptions blog in a recent article about updating your beneficiaries, something many retirees in second marriages fail to do.

Yes, it’s great to celebrate this new relationship! But don’t let bad planning turn your celebration into a nightmare. And don’t let failure to plan ruin your dreams of a fruitful retirement. To start creating your own retirement plan, we invite you to attend a free LifePlanning Seminar at a location near you. We’ll review all aspects of a solid LifePlan: legal, financial, housing, health and family. It’s a fast-paced, information-packed session we know you’ll enjoy. To reserve your place at a free seminar, click on the Upcoming Events tab on this website. We hope to meet you soon.

(originally reported at www.marketwatch.com)

Retirement May Not Be What You Think –Some Surprises to Expect

What do you think “retirement” will be like? As we’ve discovered in our interaction with thousands of retirees, the answers vary widely. But a recent research report done by the financial firm Merrill Edge revealed that retirement can definitely hold some surprises – not all of them happy ones.

We discovered this interesting article on the financial website Market Watch (www.marketwatch.com). According to the author, the Merrill Edge study reveals that “what retirement is really like may surprise you – and not always in a good way.” The study essentially asked retirees the question, “What have you done in retirement that surprised you?” For nearly one retiree in three, the top answer was clear: they spent more money in retirement than they had planned or expected.

A few years ago a similar study by the financial firm Mass Mutual showed the same thing, although not quite so dramatically. This 2014 study revealed that one retiree in six was surprised by their financial problems in retirement. That’s still a significant number.

What other surprises did the Merrill Edge study point out? About one retiree in five had to make an unexpected move to a new location, possibly for financial reasons and possibly for health-related reasons. This number seems surprisingly high to us, since here at AgingOptions we spend quite a bit of time counseling our clients on how to plan for their housing needs as they age. From this study it would seem that, while many retirees do choose to move, nearly 20% of those who do relocate did not anticipate doing so.

Returning to the question of finances, we wondered why so many retirees find themselves surprised by their spending. According to the Market Watch piece, the chief answer is simple: the higher than expected cost of health care. “A couple, both 65, that retired in 2015 will end up shelling out roughly $245,000 — that’s up nearly 30% over the past decade – on health care throughout retirement,” says Market Watch, even though they have Medicare health coverage.

And in light of that “sticker shock,” here’s a related statistic that amazed us: Market Watch states that less than one person in four has factored health care costs into their retirement planning! In today’s environment of skyrocketing out-of-pocket medical costs, that number may indicate that traditional financial planners simply aren’t doing an adequate job of preparing their clients for the true cost of growing older. Bottom line: your retirement plan needs to be comprehensive in scope, covering all aspects of your future life.

What are these elements of a good plan – or a LifePlan, as we call it? Medical needs rank high on the list, as does a good financial plan. Your legal affairs must also be in order and carefully thought out. You need to consider your many housing options and plan for the one that best suits your needs and desires. And finally, one element many plans overlook is your family: you need to make certain they’re aware of your desires. No one wants to burden their family unnecessarily as they grow older! A LifePlan includes this entire range of considerations, allowing to you approach retirement with confidence.

Here’s how to begin the planning process: simply click on the Upcoming Events tab above and register for a free LifePlanning Seminar. These take place frequently at locations throughout the area. There’s no obligation whatsoever, and we assure you that you’ll come away with valuable knowledge and insight that will help you get started on the road toward a happy and fulfilling retirement. Following a carefully conceived LifePlan is one excellent way to ensure that all your “retirement surprises” will be happy ones.

We’ll look forward to meeting you at a LifePlanning Seminar soon.

(originally reported at www.marketwatch.com)

Surprise! Ten Services Medicare Part A and B Probably Won’t Cover

The popular financial website Motley Fool (www.fool.com) always covers a wide range of stories in a clever, sometimes irreverent style. We like how the site tries to put things in down-to-earth terms, which is why we were drawn to a just published article about Medicare. Not only does the article briefly (and helpfully) describe each of Medicare’s four parts, it also lists ten common medical services that – generally speaking – original Medicare does not cover.

Clearly this is important information for retirees who may be operating under the wrong assumptions about their future medical insurance needs. Click here to access the Motley Fool article.

It’s no secret that medical costs keep rising, and so does the value of Medicare benefits – benefits which affect virtually every senior adult in America. The Urban Institute recently released a study estimating that, by 2030, the value of Medicare’s lifetime benefits to the average 65 year old couple will exceed $650,000. But in spite of its critical importance in the lives of seniors, much about Medicare remains misunderstood. As the Motley Fool article puts it, “if consumers don’t understand a program, they won’t be able to take full advantage of it.”

For example, a study by United Healthcare in 2013 showed that at least one fifth of American seniors called Medicare “confusing.” People still don’t fully understand which of Medicare’s parts (A, B, C and D) covers what, and which ones carry a premium. With typical understatement, the Motley Fool says, “It would appear that the biggest obstacle the program faces is an educational shortfall.”

The article then briefly describes which part covers what. We won’t go into further detail here, but if this is something you’ve wondered about – as many of our clients have – this article is a good place to start.

Then the Motley Fool piece lists ten medical services seniors may have thought would be covered by “basic” Medicare (parts A and B) but which in most cases will not be. (There are some exceptions.) For example:

• If you’re traveling or living outside the U.S. your medical needs will almost certainly not be covered by Medicare A or B.
• For hearing aids and routine eye exams and glasses you’ll be on your own – these are not generally covered by original Medicare.
• Don’t count on Medicare A or B for routine dental care or foot care.
• If you prefer alternative treatments such as acupuncture or homeopathy, those services will not be covered by Medicare A or B.
• Cosmetic surgery is generally not covered if it’s elective. It may be covered as a result of disease or accident.
• Unless you’re recuperating in a skilled nursing facility, you shouldn’t expect Medicare A or B to cover custodial care – in other words, the kind of care an assisted living facility or home health care worker might provide. Odds are you’ll be responsible for these costs.
• Some diabetes supplies may not be covered, or may be covered only partially.

The point is clear: if you haven’t thought about medical costs as you age, you may be in for a shock. So our question is, have you considered how to meet your medical needs in retirement? A surprising number of seniors have not – which is why we strongly urge you to attend one of our LifePlanning Seminars where we review all five of the essential facets of a solid retirement plan. We’ll help you consider medical needs, financial plans, legal affairs, housing options and family relationships, so you can protect your assets and avoid becoming a burden to those you love.

Space at our LifePlanning Seminars is limited, so register today. Click on the Upcoming Events tab on this website. LifePlanning Seminars are offered at no cost, but the information is priceless. We’ll look forward to meeting you at a future seminar.

(originally reported at www.fool.com)