This past Saturday on the AgingOptions Radio Show a listener by the name of Tricia called in to inquire as to whether there might be some good alernatives to the AARP (American Association of Retired Persons)… similar organizations that could offer the same benefits associated with AARP’s vast membership “clout” in procuring savings on things like insurance products and discounts on services and products.
Turns out that there are! Membership groups that build upon the AARP model of “purchasing strength in numbers” include groups such as the Association of Mature American Citizens (AMAC) ,which bills itself as a “Conservative alternative to the AARP” and the American Seniors Organization being two such examples.
Here’s what it really comes down to… in all these membership groups there’s the “Products” side of the coin and the “Politics” side… and its up to the leanings and leading of each individual to come to an informed decision about which channel they want their $$$ to flow into and through.
Here’s the knock on AARP. They lobbied hard and heavy for “Obamacare”, but not without, shall we say, ‘mixed motives’. How so? Obamacare is slated to pull over $500 billion (Yes, that’s billion with a “B”) out of Medicare over the next 10 years to help foot the bill for itself. And what will seniors do who then have to go out and purchase more insurance coverage on their own to make up for that little “redistribution of wealth”? Yup, that’s right… turn to AARP to purchase such coverage from them. Can you say “Conflict of interest”?
This is precisely why alternatives to AARP have sprung up. Americans love freedom of association, but conversely, we hate being strong-armed into supporting political positions that we don’t agree with. Ask 66% of any and all union members how they feel about having their dues going to support Democrat politicians and policies and you’ll see why groups like AMAC and ASO now exist.
For those of you who want to dig a little deeper into the decision of what you want your membership dues going toward here’s an interesting interview done by radio show host Bill Bennett with the founder of AMAC.
… And What Does It Mean For Their Retirement Security?
Prudential Financial sponsored research by the University of Missouri to identify the key factors
that impact when individuals choose to retire. This research identified several factors that make
individuals more likely to retire in any given year, including strong equity markets performance,
the retirement status of a spouse, and participation in a DB plan.2 Some of these factors heighten
the retirement risks to which individuals are exposed.
For example, based on historical stock market data, retiring after periods of strong equity market performance increases the likelihood of experiencing negative equity returns just after retiring, which have a much more detrimental impact on an individual’s retirement security than negative returns experienced later in retirement. This article outlines the findings from the University of Missouri’s research, highlights the investment risks associated with individuals’ elective retirement decisions.
Workers will be eligible to contribute an extra $500 to their 401(k)s next year, the Internal Revenue Service announced this week. Employees with higher incomes will also be eligible to get a tax break for saving in a traditional IRA, contribute to a Roth IRA, and qualify for the saver’s credit. Here’s a look at how 401(k) and IRA rules will change in 2012. http://money.usnews.com/money/blogs/planning-to-retire/2011/10/21/401k-and-ira-changes-coming-in-2012
Medicare will cut payment rates to home health agencies by 2.3 percent in 2012 — the sixth consecutive annual decrease in fees to the industry. The decision, which will lop off an estimated $430 million from the program next year, follows concerns by a congressional advisory panel that the agencies are overpaid. http://seniorjournal.com/NEWS/Medicare/2011/20111102-MedicareCutsPayments.htm
It’s difficult to determine exactly how much money is enough to retire comfortably. Households earning $50,000 or more will need about 80 percent of their pre-retirement earnings to maintain their current standard of living in retirement, according to a new Center for Retirement Research at Boston College report.
If you have original Medicare, the doctor you visit can make a difference in how much you have to pay. While you can go to any doctor who accepts Medicare payments, if the doctor does not “accept assignment,” you can end up paying a lot more. (This does not apply to beneficiaries who are in Medicare Advantage, or managed care, plans.)
Medicare Part B recipients must satisfy an annual deductible. Once the deductible has been met, Medicare pays 80 percent of what Medicare considers a “reasonable charge” for the item or service. The beneficiary is responsible for the other 20 percent.
However, in most cases what Medicare calls a “reasonable charge” is less than what a doctor or other medical provider normally charges for a service. Whether a Medicare beneficiary must pay part of the difference between the Medicare-approved charge and the provider’s normal charge depends on whether or not the provider has agreed to participate in the Medicare program.
If your doctor participates in Medicare it means that the doctor “accepts assignment.” In other words, the doctor agrees that the total charge for the covered service will be the amount approved by Medicare. Medicare then pays the provider 80 percent of its approved amount, after subtracting any part of your annual deductible that has not already been met. The provider then charges you the remaining 20 percent of the approved “reasonable” charge, plus any part of the deductible that has not been satisfied.
If your doctor does not participate in Medicare and does not accept assignment, the rules are different. Non-participating doctors can charge 20 percent of the approved amount plus up to an additional 15 percent more than the Medicare-approved amount. Non-participating doctors can also charge you for the care upfront and request that you bill Medicare, while doctors who accept assignment cannot.
Here is a revealing Met Life Study that delves into women’s attitudes and behaviors related to planning. It reveals a paradox that imperils their extra years with extra risks: Women in general have greater concerns about their retirement security yet do less than needed to plan for adequately addressing those concerns.
Moreover, even when they are on par with men in some planning behaviors, women fall short, along with some men, of incorporating basic and important planning principles into their strategy and activity. It seems self-evident that, if anything, in their own self interest, women should actually out-plan men. That is, we should see women taking charge of their futures in a more forceful way that accounts for their unique set of risks. Findings from this study reveal that this is not the case, although they certainly have the capacity to do so. See the Met Life Study here…
Once you pass 50, your life insurance needs may change. Perhaps the kids are grown and financially secure, or your mortgage is finally paid off. If so, you may be able to reduce or eliminate coverage. On the other hand, a disabled dependent or meager savings might require you to hold on to life insurance indefinitely. See the full AARP article here…
The number of seniors facing credit card debt has been growing. The average credit-card debt for consumers over 65 more than doubled from 1992 to 2004, to $4,907. Credit card debt can be especially problematic for seniors, who typically have a fixed income. If you or someone you love is having trouble making credit card payments, there are several options:
- Try negotiating. A credit counseling agency or attorney may be able to negotiate with the credit card company for lower fees or interest rates. If the debtor is relying solely on Social Security for income, it may even be possible to have the debt forgiven. Note, however, that if the debt is forgiven it can count as income, which may create tax consequences or affect Social Security payments.
- Reverse mortgage. If the debtor owns a house and is over 62 years old, a reverse mortgage may provide enough money to pay off debt. With a reverse mortgage, instead of paying the bank money to build up equity, homeowners use the equity in their homes to take out loans. The loan does not have to be paid back until the house is sold or the homeowner dies. While reverse mortgages may look like no-lose propositions on the surface, they also have some significant downsides.
- Tap into life insurance. Permanent life insurance policies build a cash value, which can be used as collateral for a loan or withdrawn from the account. This money can be used for any purpose, including paying down credit card debt. Keep in mind, however, that loans or withdrawals will reduce the death benefit.
- Bankruptcy. Filing for bankruptcy is not an easy solution. In 2005, a tough bankruptcy law went in to effect, making it much more difficult to get bankruptcy protection. For example, bankruptcy is available only to individuals whose income is below a certain level, and the homestead exemption, which allows you to protect all or some of the equity in your home, is stricter. Before filing for bankruptcy be sure to discuss your options with an attorney.
- Do nothing. It may sound crazy, but one option is to do nothing and let the credit card companies sue the debtor. If the debtor owns a house, the court may put a lien on it. If not, the debt may be written off or reduced. An attorney can tell you if this is the right step for you take.
Regardless of what steps the debtor takes, debtors have the right not to be harassed by credit card companies. The Fair Debt Collection Act prohibits certain conduct by credit agencies attempting to collect debts. For example, creditors may contact debtors only between the hours of 8am and 9pm, may not use abusive or profane language, and must stop contacting debtors if the debtors request it in writing.
“From 2005 to 2007 and for the first year of my show on Fox from late 2007 into 2008, I used to say one thing about real estate as an asset class whenever it came up, “There’s never been a better time to sell real estate than right now.” I used to write a weekly piece for the TheStreet.com back in 2006 and 2007 called “This won’t end well” and I often featured real estate charts that went straight up and were supposed to continue going straight up forever. I used to mock Ben Bernanke and others who were convinced that since we’d never had a nationwide downturn in real estate that it could never happen” . Read the rest of Cody Willard, a Wall Street Journal Market Watch contributor here…
