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For Retirees, 70 May Not Be The New 65

September 10, 2012 by Honey Leave a Comment

A recent Wall Street Journal MarketWatch article by Elizabeth O’Brien (August 30, 2012) describes a new study by the Employee Benefit Research Institute (ERBI). The study finds that about a third of today’s households won’t be financially prepared to retire, even if they continue working until age 70.

ERBI’s findings are at odds with a prior study by the Center for Retiree Research at Boston College, which found that 86% of households would be able to retire if they worked until age 70.

According to ERBI’s Jack VanDerhei, the reason for the vast descrepency between both studies is “the Center for Retirement Research analysis didn’t factor in the prohibitively high costs of nursing home care, which typically isn’t fully covered by Medicare and is only covered by Medicaid in some cases. His own methodology included the probability of nursing home expenses and arrived at a less optimistic conclusion.”

Here’s an additional quote from the article: “Many workers don’t even have the luxury of delaying retirement. In EBRI’s 2012 Retirement Confidence Survey, 50% of current retirees reported they left the workforce earlier than planned—because of health concerns for themselves or their spouse, changes at their company or other reasons.”

The bottom line: take heed. Medicare does not pay for long-term care. Long-term care costs can be catastophically high. Medicaid-paid long-term care offers little choice and less dignity. Plan accordingly, now! Reasonably priced long-term care insurance is a sane, empowering, logical investment.

Are You on the Hook for Mom’s Nursing Home Bill?

June 26, 2012 by Honey Leave a Comment

In an article that EVERY Boomer should read, “Are You on the Hook for Mom’s Nursing Home Bill?” (http://online.wsj.com/article/SB10001424052702303506404577446410116857508.html), in the June 22, 2012 Wall Street Journal, Kelly Greene notes that “29 states have ‘filial support’ laws that could be used to go after patients’ adult children for unpaid long-term-care bills.” And although these laws have not been enforced in many states, “…Pennsylvania nursing homes have started routinely using the law to prod families into paying their elders’ bills or completing Medicaid paperwork on their behalf.” And it’s a good bet that other states will begin to use their laws as Medicaid funding dries up and nursing homes become increasingly desperate to cover their costs.

So just when you thought Mom and Dad would receive their long-term care (LTC) in a local nursing home at the federal government’s expense, you may be asked to ante up – conceivably for hundreds of thousands of those dollars that you were planning to support your comfortable retirement!

The answer, of course, is early planning. “The best defense against such laws, elder-law experts say, is planning,” Greene continues. ‘If your parents aren’t multimillionaires, then you need to get some advice way early, maybe when they’re 65,’ says Carolyn Rosenblatt, aSan Franciscomediator, elder-law attorney and registered nurse. ‘By the time they’re in their 80s, most people need some help. How would you pay for that?’

The best way to eliminate this potential problem entirely is to begin a discussion of LTC insurance with your parents when they reach their 50s or early 60s at the latest. And while you’re at it, you can begin planning to purchase your OWN LTC insurance so you don’t your children don’t have to suffer through the same emotional and financial stress in your later years.

“Life Is What Happens to You While You’re Busy Making Other Plans” (John Lennon): Part II

June 14, 2012 by Honey Leave a Comment

In “Counting on an Inheritance? Count Again” the June 11, 2012 Wall Street Journal documents trends that are becoming all too familiar to Baby Boomers. First, their parents are living longer. “How much longer?” the article asks. “Thanks to medical gains, a 65-year-old man has a 60% chance of living to age 80 and a 40% chance of reaching 85. For women, the odds are 71% and 53%, respectively.” Therefore, Mom & Dad are much more likely to spend your inheritance simply to make ends meet as they age.

AND if you add in the cost of long-term care, which 75% of Americans over age 65 are likely to need, you might as well bid fond farewell to that lump sum you were planning on after both parents pass.

Second, just like the Boomers, their parents have seen their investments shrink substantially in the past few years – which will lead to an even smaller inheritance for the children. In fact, the Boomers may find themselves pitching in to help support Mom & Dad! According to a recent study from Northwestern Mutual Life Insurance Co. in Milwaukee, the WSJ article notes, “…when asked how prepared they feel to live to various ages, one in three surveyed adults age 60-plus said they didn’t feel prepared financially to live to age 85.” And, sadly, many Boomers avoid such discussions with their parents – until it is too late.

On the positive side, the Wall Street Journal notes that some financial advisors are recommending (FINALLY!!!) that Boomers help their parents pay for long-term care insurance (LTCi) premiums to defray potentially catastrophic costs as they age. The lack of these policies can lead to family squabbles about the quality of care that Mom & Dad need and their cost. Of course, any Boomers who have to struggle with this dilemma should certainly consider LTCi for themselves to capture insurability and low premiums while they are still healthy and spare their own children future headaches.

“I don’t want to be a burden on my children.”

January 8, 2012 by Honey Leave a Comment

A recent article (“Aging and Broke, More Lean on Family,” Wall Street Journal, Dec. 31, 2011) by E.S. Browning documents a disturbing trend among boomers and their parents. And if Americans continue to avoid responsible planning for their long-term care, boomers and their CHILDREN will be confronted with an even more pervasive problem. Increasing numbers of aging boomers will live with their children or receive financial aid from them.

Browning reported that “Thirty-nine percent of adults with parents 65 and older reported giving parents financial aid in the past year, according to a September Pew Research Center survey. Some parents may have trouble acknowledging it: 10% of parents 65 and older reported receiving aid. …In 1900, 57% of adults 65 and older lived with relatives, according to Pew Research. Because of Social Security, Medicare and improving health and wealth, that rate declined to 17% by 1990, Pew says. Now it is up to 20%.”

As the boomers continue to age, this percentage is extremely likely to increase, and the result will be growing levels of emotional, physical and financial stress among family members. Long-term Care Insurance provides dignity and choice and helps families avoid this kind of crisis.

Another Harmful Article on long-term care (LTC)

January 28, 2011 by Honey Leave a Comment

Checking my Google alerts for long-term care (LTC) mentions, I found this useful and correct piece by Terry Savage, someone I greatly respect because she researches thoroughly (“Long-term care combined with life insurance solves problems,” Chicago Sun Times, January 24, 2011).

Then I came across this harmful piece by Anne Teregesen of the Wall Street Journal (“The latest long-term-care snafu,” Wall Street Journal, Personal Finance, January 22, 2011.) Here’s what I had to say to her:

Dear Ms Teregesen,

While you got your info correct in this recent article, it is a pity that you chose to place all the emphasis in this piece on old policies without mentioning that policies placed from the 90’s on don’t have these restrictions and work like a charm. Furthermore, the number of these old-old policies is small – a point you also failed to mention. Rather than “spook” consumers away and give them one more reason to procrastinate and not have a conversation about responsible LTC planning, I wonder why you could not have at least mentioned that the statistics are that over 95% of all LTC claims get paid. Normally, the reasons LTC claims don’t get paid are that trigger criteria aren’t met or the claim is incomplete. If the claim is incomplete or incorrect, we correct it, re-submit, and the claim gets paid. The claims process is pretty uncomplicated. It’s becoming quite routine for home health agencies and assisted living facilities to complete claim paperwork. There are plenty of sources for these facts that you failed to use. So now you have one more column with a negative spin on responsible LTC planning. You have further discouraged the vast wave of Baby Boomers, who are already ill prepared and who will probably need lots of long-term care in a giant bulge, from considering reasonably priced LTC. Because of your inadequate research, you have done the public a bad service.

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For Retirees, 70 May Not Be The New 65

Are You on the Hook for Mom’s Nursing Home Bill?

“Life Is What Happens to You While You’re Busy Making Other Plans” (John Lennon): Part II

Another Harmful Article on long-term care (LTC)

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