Wednesday, July 6, 2016

Residents Offer Their Perspectives on Three CCRC "Sales" in New Jersey

In New Jersey, ORANJ is an organization for residents of "continuing care retirement communities" (or CCRCs, also sometimes known as "Life Plan Communities," following a LeadingAge marketing study and plan announced in November 2015). Founded in May 1991, members recently celebrated their 25th anniversary.  In a summer 2016 newsletter, called, appropriately ORANJ Tree, residents from three communities reported on major changes in ownership of their facilities, and how such changes can affect community moral and future prospects.  The CCRCs discussed were:

  • 2016: Cadbury at Cherry Hill (reporting a new ownership is part of a conversion from nonprofit status to for-profit)
  • 2016: Franciscan Oaks
  • 2013: Fountains at Cedar Parke

In my observation, these New Jersey transactions, especially a conversion from nonprofit to for-profit, are part of a larger, national picture of communities struggling for identity in a competitive senior living market.

July 6, 2016 in Consumer Information, Current Affairs, Health Care/Long Term Care, Housing, Property Management, Retirement | Permalink | Comments (0)

Tuesday, July 5, 2016

Will Mandatory Retirement Come to the Medical Profession?

Modern Healthcare ran an article that got me thinking about whether we will see mandatory retirement being applied to the certain doctors. More hospitals screen aging surgeons to make sure their skills are still sharp was published on June 11, 2016. The article starts with relating the story of  one facility and a 79 year old surgeon returning to work after some health problems. The facility had concerns but the article notes, "[t]hey had few tools at their disposal, though. Hospital policy limited interventions to clinicians who had made medical mistakes. [The surgeon] had never had an adverse event with a patient under his care." The chief of surgery at this hospital suggested a program from "Maryland that provides cognitive and physical examinations for aging surgeons."

We all know that conversations with someone about their diminished abilities are very difficult to have. The article offers a nod to that. Everyone is living longer, even doctors, and  longevity along with "[a]dvances in medicine, personal wellness and public health, along with the desire to preserve a sense of purpose and their lifelong identity, have led many to work well beyond traditional retirement age."  Some facilities are developing policies to evaluate their continued practice of medicine, "policies that require clinicians of a certain age to undergo physical, cognitive and clinical testing. Those programs have been met with ire by career practitioners, who argue that age is just a number. Doctors—no matter what their age—already must renew their medical licenses at regular intervals with state medical boards."  Critics note that renewals of licenses don't test "for age-related cognitive and physical decline that could harm the quality of care provided to patients." (does this debate sound familiar to anyone?)

The article then moves into a discussion of the ADEA and mandatory retirement and whether mandatory retirement should be applied to doctors. The American Medical Association (AMA) issued a report in 2015 on age-related declines with clinicians and is working on the beginnings of "research opportunities to inform preliminary guidelines for assessing senior and late-career physicians." This year the American College of Surgeons (ACS) "recommended that surgical specialists undergo voluntary and confidential baseline physical examinations at regular intervals starting between ages 65 and 70."

The article notes that some health care facilities have instituted their own requirements. "The policies vary in terms of the ages at which clinicians begin screening and what the exams require. Some call for clinicians to complete clinical skill and physical health screening every couple of years. Others require a more controversial cognitive test, which the AMA is leery of supporting." There is no uniformity yet with these programs. As far as the doctor at the beginning of the article? He did go through a program and passed. The surgeon "did recently decide to shift some of his responsibilities and now spends more time on training and education with another physician taking the role of chief of vascular surgery.  [The surgeon] also became an advocate who encourages his colleagues to consider it."

July 5, 2016 in Cognitive Impairment, Consumer Information, Current Affairs, Health Care/Long Term Care, Retirement | Permalink | Comments (0)

Monday, June 27, 2016

Retirement Advisors and the Fiduciary Standard

Do retirement advisors have to comply with the fiduciary standard when giving clients advice? If you said yes, you'd be right in line with what most folks think. After all, isn't your financial advisory giving you advice about your retirement investments? The New York Times article, Isn’t Honesty the Best Policy? explores this issue.

"The Department of Labor has been working since 2010 to hold everyone who provides financial retirement advice to this standard. After multiple public comment periods and significant consultation with industry leaders, consumer advocates and other experts, the department published a final rule that went into effect this week but provides the industry with a realistic transition period."  But not all are on board with using the fiduciary standard for financial advisors. So there was lobbying and action in Congress. "Their lobbying worked. Republican majorities in the House and Senate pushed through a bill to block the Department of Labor’s rule. On Wednesday, President Obama rightly vetoed it."

But that isn't the end of it. "[T]he Chamber of Commerce and other industry groups are trying a different route. Using similar arguments they made when lobbying Congress, they filed a last-ditch lawsuit in United States District Court for the Northern District of Texas ... to prevent the rule from being enforced." The lawsuit claims that it creates an "unwarranted burden[]" but the author of the article responds to that point: "I almost can’t believe this even needs to be said, but it’s not unwarranted to burden retirement advisers with a requirement that they act in their clients’ best interest."

According to the article, the opposition of the regulations may be speaking from both sides of their mouths, because "[w]hile financial executives complained to the Department of Labor that the rule was “immensely burdensome” and “very difficult” to comply with, they were telling investors on Wall Street that they “don’t see it as a significant hurdle” and that efficiently complying with the rule could provide a competitive edge in the market."

"If the fiduciary standard is good enough for medical care, legal advice and accounting, it is good enough for financial retirement advice. We don’t accept less anywhere else in commerce. Why should we accept it from those we trust to protect our retirement savings?"

Ask your advisor about the advisor's compliance with the fiduciary standard. It's important.

June 27, 2016 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement | Permalink | Comments (0)

Wednesday, June 22, 2016

Social Security & Medicare Trustees 2016 Reports Released

It's that time of the year! The Social Security Trustees and the Medicare Trustees released their 2016 reports.  There is always a lot of information in these reports, but what everyone wants to know is when these programs are "running out" of money. According to the Social Security Trustees 2016 report, the SSDI and Retirement funds (combined) are "good" through 2034, although individually the SSDI fund isn't as robust, with its solvency at risk in 2023. 

Here is an excerpt from the summary:

The Bipartisan Budget Act of 2015 was projected to postpone the depletion of Social Security Disability Insurance (DI) Trust Fund by six years, to 2022 from 2016, largely by temporarily reallocating a portion of the payroll tax rate from the Old Age and Survivors Insurance (OASI) Trust Fund to the DI Trust Fund. The effect of updated programmatic, demographic and economic data extends the DI Trust Fund reserve depletion date by an additional year, to the third quarter of 2023, in this year's report. While legislation is needed to address all of Social Security's financial imbalances, the need remains most pressing with respect to the program's disability insurance component.

The OASI and DI trust funds are by law separate entities. However, to summarize overall Social Security finances, the Trustees have traditionally emphasized the financial status of the hypothetical combined trust funds for OASI and DI. The combined funds satisfy the Trustees' test of short-range (ten-year) close actuarial balance. The Trustees project that the combined fund asset reserves at the beginning of each year will exceed that year's projected cost through 2028. However, the funds fail the test of long-range close actuarial balance.

The Trustees project that the combined trust funds will be depleted in 2034, the same year projected in last year's report....

As far as Medicare, the Trustees report solvency through 2028. Here are two excerpts from the Trustees Report (in Section II.A.)

Short-Range Results

The estimated depletion date for the HI trust fund is 2028, 2 years earlier than in last year’s report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years. HI tax income and expenditures are projected to be lower than last year’s estimates, mostly due to lower CPI assumptions. The impact on expenditures is mitigated by lower productivity increases.

Looking at the separate programs Part A (HI) and Part B (SMI) the picture for SMI is a bit better

The SMI trust fund is adequately financed over the next 10 years and beyond because premium income and general revenue income for Parts B and D are reset each year to cover expected costs and ensure a reserve for Part B contingencies. A hold-harmless provision restricts Part B premium increases for most beneficiaries in 2016; however, the Bipartisan Budget Act of 2015 requires a transfer of funds from the general fund to cover the premium income that is lost in 2016 as a result of the provision. In 2017 there may be a substantial increase in the Part B premium rate for some beneficiaries. (See sections II.F and III.C for further details.) ...

 

June 22, 2016 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Medicare, Retirement, Social Security | Permalink | Comments (1)

Monday, June 13, 2016

Are Baby Boomers Unique in Isolating Themselves as They Age?

Professor Laura L. Carstensen, PhD, who is the director of the Stanford Center on Longevity, has an intriguing essay in a recent issue of Time magazine, focusing on research on social engagement among the Boomer generation.  She writes

The 55-to-65-year olds just about to join the ranks of the elderly are far less socially engaged now than their predecessors were at the same age 20 years ago.   And this pattern emerged across all traditional measures of social engagement:  Boomers are less likely to participate in community or religious organizations than were their counterparts 20 years ago.  They are less likely to be married.  They talk with their neighbors less frequently.  And it doesn't stop with participation in communities and neighborhoods: boomers report fewer meaningful interactions with their spouses and partners than did previous generations, and they report weaker ties to family and friends. 

She asks, "Should we be worried about these trends?"  For her answers, read "Baby Boomers are Isolating Themselves as They Age." (Hint, the subtitle says: "That's bad -- for everyone.")

June 13, 2016 in Consumer Information, Current Affairs, Ethical Issues, Retirement, Statistics | Permalink | Comments (0)

Friday, June 10, 2016

Local Government Challenges as Older Workers Retire

How long do you plan to work, if you are a Baby Boomer? According to one survey from the Center for State and Local Government Excellence, we are facing a "brain drain" in local governments. The 'Silver Tsunami' Has Arrived in Government explains the survey "indicates that governments are experiencing an uptick in retirements. More than half -- 54 percent -- of surveyed governments reported an increase in retirements last year from 2014, while just 10 percent reported a decrease."  Here's where the "brain drain" comes in. According to the story "[b]aby boomers at or near retirement age make up a large share of senior-level managers in many agencies. Compared to the private sector, public-sector workers tend to be older and possess higher levels of education."

The article explores reasons why there seem to be so many retirements these days, including the expiration of union contracts, retirement benefits reductions , etc. And since not all Boomers have hit retirement age yet, the "silver tsunami" is expected to continue "over a number of years given that the youngest baby boomers just turned 52 years old."

The article explains that the survey shows not just retirements but an increase in individuals quitting their jobs.

The survey, 7 pages long with 19 questions and results, is available here as a pdf.

June 10, 2016 in Consumer Information, Current Affairs, Retirement, Statistics | Permalink | Comments (0)

Tuesday, June 7, 2016

Health Care Debt and Debt Collectors: "Is This How My Life Will End?"

John Oliver, in his typically over-the-top, but still informative manner, focuses on the industry of debt collection and how it can be especially troublesome for older adults.  Indeed, when I was running an Elder Protection Clinic for Dickinson Law, a significant percentage of our clients were struggling with "old" debts, often connected to health care costs, and were dealing with aggressive attempts to recover what has come to be known as  "zombie debt."  One woman interviewed about $80k in debt arising out of denial for insurance coverage for her elderly husband's hospitalization for breathing problems, describes her fear and frustration after a lifetime of working and saving.  She asks, "Is this how my life is going to end?"

 

 

Our thanks to Karen Miller, Esq., in Florida, for sending this link.  

June 7, 2016 in Consumer Information, Current Affairs, Ethical Issues, Health Care/Long Term Care, Retirement, Statistics | Permalink | Comments (0)

Thursday, June 2, 2016

Incentives to Delay In Claiming Social Security?

Periodically we post about an article on Social Security, and one of the hot topics of late is when to start drawing Social Security. Do you take Social Security early before you reach your full retirement age, do you wait until that magic number (66 for many) or do you delay taking Social Security to later, even age 70? When you start to claim your Social Security benefit does have ramifications. We have also seen articles about the future viability of the Social Security program.

The Wall Street Journal ran an article recently about a recently published paper on the topic. The article, Here’s How to Get More People to Delay Claiming Social Security offers a view of regarding making Social Security more viable.


Global aging paired with pension shortfalls have led many governments to raise retirement ages and cut benefits. But this approach tends to be unpopular, as demonstrated by loud protests we’ve seen over the last few years from Greece and France to Detroit and, soon, Puerto Rico.

The article explains that the authors offer this proposal to increase the solvency of Social Security by "replacing the current Social Security delayed retirement credit with a lump-sum payment would induce many people to voluntarily defer claiming their Social Security benefits, and many would work more."

In the article, the authors explain the study they conducted to see if their idea would have merit, and they explain that

What we learned from our study is that many people would be willing to claim later and work longer, if they can get the attractive partial buyout from Social Security. Additionally, many who had initially stated that they wanted their benefit as young as possible, were also most willing to delay and work longer when offered the partial buyout.

The authors explain their idea is designed to be "cost-neutral" thus not adding to the woes regarding Social Security's long term prospects. The authors also note that  "incentivizing longer work lives could lead to better mental and physical health at older ages for many people, so there could be ample positive social benefits."

The authors' paper is published on SSRN. Will They Take the Money and Work? An Empirical Analysis of People's Willingness to Delay Claiming Social Security Benefits for a Lump Sum. Here is the abstract for the paper:

This paper investigates whether exchanging the Social Security delayed retirement credit, currently paid as an increase in lifetime annuity benefits, for a lump sum would induce later claiming and additional work. We show that people would voluntarily claim about half a year later if the lump sum were paid for claiming any time after the Early Retirement Age, and about two-thirds of a year later if the lump sum were paid only for those claiming after their Full Retirement Age. Overall, people will work one-third to one-half of the additional months, compared to the status quo. Those who would currently claim at the youngest ages are likely to be most responsive to the offer of a lump sum benefit.

 

June 2, 2016 in Consumer Information, Current Affairs, Retirement, Social Security | Permalink | Comments (1)

What Do People Do in Retirement?

Have a plan to retire? Know how you will spend your time? AgeWave, along with Bank of America Merrill Lynch did a study on how people spend their retirements. Beyond the Bucket List: Experience Leisure in a Whole New Way provides the highlights from the study.  

Huffington Post ran two blog posts that discussed the report. New Study Uncovers the Upside of Retirement Leisure: The Freedom Zone was published on May 12, 2016 and New Study Reveals Four Distinct Stages of Retirement Leisure on May 13, 2016. The report notes that people who are retired have more free time, but transitioning from work to retirement may be a challenge for some, since, according to the report, many folks work even when they are on vacation. The report discusses emotional well-being and the value of experience over acquisition. The report also discusses the importance of saving for retirement. The report identifies "4 stages of retirement leisure" from "winding down & gearing up" to "contentment & accommodation."

To read the full report, register with Merrill Lynch to download it.

June 2, 2016 in Consumer Information, Current Affairs, Health Care/Long Term Care, Retirement | Permalink | Comments (0)

Thursday, May 26, 2016

Older and Poorer? Local Governments Need to Plan

Governing ran an article last month, An Older, Poorer America Is Coming, The article opens

The percentage of older Americans living below the federal poverty line has decreased by two-thirds since 1966. That year, according to data from the Pew Research Center, 28.5 percent of Americans age 65 and over were poor. By 2012, that number had declined to just 9.1 percent.

But we may be at the end of that happy trendline. I think that over the next five to 10 years we will see a dramatic reversal in the economic fortunes of millions of our oldest residents. That has profound implications for governments at all levels.

Discussing how we fund retirement (the 3-legged stool), the author notes the changes in pension plans, the low amounts saved and the higher amount of debt. This is not particularly new to those of us who teach elder law. But consider the following from the author:

You can put off retirement, and many are. The labor force participation rate for those 65 and older increased from 12.4 percent in 1994 to 18.6 percent in 2014. But you can’t put off aging. The collapse of incomes for this group when they no can longer work is going be a double hit for government, decreasing the taxes they pay just as they need more public services.

The author calls on local governments to be planning for this scenario: "the consequences of dramatic increases in the older poor, including looking at affordable housing, transit and health care." Noting the potential power of the ballot box, the author concludes "Given the size of the baby boom population, a return to the poverty rates that existed among aging Americans before the War on Poverty would result in more than 8 million newly impoverished seniors. They’re not going to sit quietly on a street corner with a tin cup."

May 26, 2016 in Consumer Information, Current Affairs, Retirement | Permalink | Comments (0)

Wednesday, May 4, 2016

Keep Working-It May Help You Live Longer

The Wall Street Journal ran an article on May 2, 2016 that working past 65 may be good for the worker's longevity. Retiring After 65 May Help People Live Longer covers a recent study published in the Journal of Epidemiology and Community Health. "The risk of dying from any cause over the study period was 11% lower among people who delayed retirement for one year—until age 66—and fell further among people who retired between the ages of 66 and 72, the study found."  One limit on the study-individuals studied were limited to those born between 1931-1941.  The study noted  "[postponing retirement may delay the natural age-related decline in physical, cognitive and mental functioning, reducing the risk of chronic illness...."

Here is an excerpt from the abstract:

Background Retirement is an important transitional process in later life. Despite a large body of research examining the impacts of health on retirement, questions still remain regarding the association of retirement age with survival. We aimed to examine the association between retirement age and mortality among healthy and unhealthy retirees and to investigate whether sociodemographic factors modified this association. .....

Conclusions Early retirement may be a risk factor for mortality and prolonged working life may provide survival benefits among US adults.

The full article is available for purchase here.

Thanks to Professor Dick Kaplan for sending us the link to the article.

May 4, 2016 in Consumer Information, Current Affairs, Other, Retirement | Permalink | Comments (0)

Wednesday, April 27, 2016

Know when to hold 'em, fold 'em . . . and (the tough one for lawyers?), know when to walk away

Southern California attorney and mediator Jill Switzer, who writes columns for Above the Law as "Old Lady Lawyer," uses lyrics from Kenny Rodger's The Gambler as part of her theme in a recent essay.  She asks whether lawyers prepare themselves, not just financially, but emotionally, to retire at the right time.  Suggesting the answer is "probably not," Switzer draws on data from a recent California State Bar survey:

On its website, the State Bar of California recently asked its lawyers “how long do you plan to keep practicing law?” The poll was completely unscientific, as it didn’t tally the results by age, years in practice, or any other criteria whatsoever. However, the result was not surprising, at least to this dinosaur: more than fifty percent of the responding lawyers said they would continue to practice as long as they are able. (Ten percent or so said they were looking to switch careers as soon as possible, approximately twenty percent said that they hoped to take early retirement, and approximately fifteen percent said they’d practice until they turned sixty-five. Note to millennials: the retirement age at which you can start receiving full Social Security benefits is creeping upward.)

For more, see Old Lady Lawyer: Is There a Farewell Victory Lap for Lawyers? 

And speaking of "farewell," did you notice that Above the Law recently terminated the "comments" option for readers of the frequently sharp-tongued blog?  Details here, and I suspect a few readers might view this change as somewhat ironic. 

April 27, 2016 in Discrimination, Ethical Issues, Legal Practice/Practice Management, Retirement | Permalink | Comments (0)

Tuesday, April 26, 2016

Mandatory Retirement Ages for Judges?

I was bemused to realize that I was on my way to vote today in the primaries in Pennsylvania without knowing in advance the outcome of a dispute over language to be used on an a referendum issue on the ballot.  The issue was mandatory retirement ages for judges in Pennsylvania.  In Pennsylvania, state judges are elected.

An early formulation of the referendum question was as follows:

Shall the Pennsylvania Constitution be amended to require that justices of the Supreme Court, judges, and magisterial district judges be retired on the last day of the calendar year in which they attain the age of 75 years?

An alternative proposal for the wording was:

Shall the Pennsylvania Constitution be amended to require that justices of the Supreme Court, judges and justices of the peace (known as magisterial district judges) be retired on the last day of the calendar year in which they attain the age of 75 years, instead of the current requirement that they be retired on the last day of the calendar year in which they attain the age of 70?

Interesting, yes? The wording does appear to potentially influence the outcome on the referendum, particularly in a state where there has been a fair amount of turmoil about behavior of members of the judiciary, unrelated to age issues, but also unlikely to make the average member of the public eager to vote to extend time in office.   From an education-of-the-voter standpoint, I was relieved when I saw the latter version on the ballot. 

For more, read Penn Live's recent coverage on the "age" issue here.  Plus, look for the outcome on the issue in news coverage after Tuesday's primary election.

4/26/16 Noon UPDATE:  It turns out that even though "my" precinct's electronic ballot contained a referendum regarding the mandatory retirement age for judges, any vote on that issue doesn't actually count.  The Pennsylvania legislature voted to take the judicial age question off the primary ballot.  So, despite my own preference for an "educate-the-voter" version for such a referendum, on November 8 the "first" version of the language quoted above will appear.  Hmmmmm.  Here's more on this topic.

April 26, 2016 in Discrimination, Retirement | Permalink | Comments (0)

Friday, April 15, 2016

Multigenerational Housing-The Hot New Thing!

The New York Times ran a story recently about a new trend in housing for elders---multigenerational homes.  Multigenerational Homes That Fit Just Right are homes that, as the name implies, are designed for multiple generations of a family that live in the same house.  "[A] growing number of families ... are seeking specially designed homes that can accommodate aging parents, grown children and even boomerang children under the same roof. The number of Americans living in multigenerational households — defined, generally, as homes with more than one adult generation — rose to 56.8 million in 2012, or about 18.1 percent of the total population, from 46.6 million, or 15.5 percent of the population in 2007, according to the latest data from Pew Research. By comparison, an estimated 28 million, or 12 percent, lived in such households in 1980."

But how does one accommodate family dynamics when living together under one roof? In fact, the story notes, many of the multigenerational households do live in an "ordinary" home. But, it appears that the building industry has developed an option that is catching on, "responding quickly to this shifting demand by creating homes specifically intended for such families."  For example, one builder's homes "don’t offer just a spare bedroom suite or a “granny hut” that sits separately on the property or a room above a garage. The NextGen designs provide a separate entranceway, bedroom, living space, bathroom, kitchenette, laundry facilities and, in some cases, even separate temperature controls and separate garages with a lockable entrance to the main house. Family members can live under the same roof and not see one another for days if they so choose."

The article explains the drivers for the trend, baby boomers (of course), the 2008 recession, tough job market and higher rents facing millenials, the boomerang children and again, those baby boomers, "[m]any [of whom] are planning ahead in hopes that they can devote more attention to their children and grandchildren — and spend little, if any, time in a nursing home."

Expect to see more of these multigenerational homes over the next years. From a legal perspective, it seems that ground rules, a family contract and a care  would be important to the success of the venture (whose turn is it to cut the grass this week? No loud music after 11 p.m. as a couple of an examples).  What an interesting concept of the market changing to accommodate demand.

April 15, 2016 in Consumer Information, Current Affairs, Health Care/Long Term Care, Housing, Property Management, Retirement | Permalink | Comments (1)

Wednesday, April 6, 2016

Massachusetts Court Rules MBTA Retirement Fund Records Are Subject to State Public Records Law

A specialized area of "law and aging" is accountability for retirement investments, including public employee pension funds.  In Massachusetts there has been a long feud between the Boston Globe media company and the Massachusetts Bay Retirement Authority (MTBA) Pension Fund over access to pension records, especially after the loss of some $25 million in employee retirements assets following the collapse of a hedge fund holding MTBA money.  Last month, a Massachusetts judge rejected key arguments by the MTBA's that the records in question were not subject to state public records law:

"The Court will ALLOW the Globe's motion for summary judgment and DENY the Retirement Board's cross-motion. The Retirement Board's preliminary assertions that the Supreme Judicial Court has already resolved the central question of statutory interpretation in the Board's favor, and that in any case the Globe may not press its claims because it failed to join other necessary parties, are both incorrect. On the merits, the Court concludes that the Board does indeed receive public funds from the MBTA, and thus that the Board's records are now subject to mandatory disclosure under the public records law unless they fall within one of the statutory exemptions. The Board's assertion that the 2013 statutory amendment only applies to records created after its effective date is also incorrect."

For more on the reasoning, see Boston Globe Media Partners, LLC v. Retirement Bd. of Massachusetts Bay Transp. Authority Retirement Fund, 2016 WL 915330 (Superior Ct. Suffolk County, Mass, March 9, 2016). 

See also Boston Globe media reports, including Judge Calls for Open MBTA Pension Files, detailing some of the related allegations by whistleblower Harry Markopolos and Boston University finance professor Mark Williams.  See also a consulting firm's March 9, 2016 Report for the MBTA that concluded MBTA had accurately reported accounting data on the pension funds during the years in question. 

April 6, 2016 in Estates and Trusts, Property Management, Retirement, State Cases | Permalink | Comments (0)

Tuesday, April 5, 2016

Planning Ahead for Management of Retirement Accounts

The Washington Post ran an interesting piece recently, using one couple's history of retirement savings to demonstrate the benefits from coordination and, perhaps, redistribution of assets or payments in advance of actual retirement.  The couple then invited commentary from two different financial advisers.  From one adviser, they learned:

Having different types of savings accounts can give the couple more control over their tax bill when they retire, [Financial Adviser] Sewell says. Money withdrawn from the tax-deferred accounts, such as the TSPs and the traditional IRAs, will be taxed as ordinary income when retirement withdrawals are made – a tax rate that could be as high as 39.6 percent for workers in the top tax bracket. The Roth IRA, on the other hand, can provide tax-free income in retirement. And money withdrawn from their taxable investing account could be taxed at lower rates, such as the long-term capital gains rate of 20 percent, she says. Adding to that account over time can also provide a separate pool of savings and allow them to hold off on tapping their tax-deferred accounts until they are required to do so at age 70.5, Sewell says. That would give those retirement savings more time to grow tax-free.

They also learned:

But consolidating accounts would make it easier for the couple to track where their money is invested and what fees they are paying, Porter says. They can look into rolling over some or all of their IRA savings into their TSP accounts, which typically have more affordable index-based investment options, Porter says. For example, the average expense ratio for a TSP fund, including target-date funds, stock funds and bond funds, was 0.029 percent in 2015, or 29 cents for every $1,000 invested. In contrast, the average 401(k) investor pays an expense ratio of 0.89 percent, or $8.90 for every $1,000 invested, according to a report by BrightScope and the Investment Company Institute. “I have not seen a lower cost plan, so I think you can’t beat that,” Sewell says.

For more read: This Couple Has Six Retirement Plans: Is It Time to Simplify?

Our thanks to George Washington Law Professor Naomi Cahn for sending this link.

April 5, 2016 in Consumer Information, Property Management, Retirement | Permalink | Comments (0)

Monday, April 4, 2016

The Ingredients for a Happy Retirement

Maddy Dychtwald, co-founder of AgeWave wrote an article for the Wall Street Journal on happy retirements.   In Where People Find the Most Happiness in Retirement,  she explains about a survey AgeWave conducted with Bank of America/Merrill Lynch.  She explains they found that

While many of us still think of retirement as a time to wind down and take time for ourselves, two-thirds of today’s retirees have found that retirement is, in fact, the best time in life to give back: their time, their talent and their money. (This finding also echoes in many ways what Marc Agronin describes in his article in The Wall Street Journal this week–that people are happier when they are connected to family, friends and community, than spending on the latest adventure.)

Volunteerism and giving seem to play a role in whether a person has a happy retirement.

Even retirees’ definition of success relates strongly to giving back. When we think about retirement and planning for it, too many of us focus almost exclusively on money: “Will I have enough money to do the things I want for as long as I live?” There’s no doubt this is an important question. But, as it turns out, at all income levels, the study shows that retirees are almost six times more likely to define their own personal success in retirement by their generosity rather than their wealth.

The recommendation from Ms. Dychtwald? Consider what will give retirement meaning and reason. "When it comes to happiness in retirement, it seems generosity trumps wealth." The study is available here.

 

April 4, 2016 in Consumer Information, Current Affairs, Retirement | Permalink | Comments (0)

Tuesday, March 15, 2016

55+ and Looking for a Job? The Elephant in the Room...

Our thanks to George Washington Law Professor Naomi Cahn for passing on this item from the Washington Post: 

“I speak to a lot of big audiences of people over 50 looking for jobs,” says Kerry Hannon, career expert and author of “Getting the Job You Want After 50 for Dummies.” “I feel and I see the palpable fear. The job market has not improved for this set of people.”

 

“It’s not a pretty scene,” she says. “What happens is people say they will keep working, but for various reasons, including health, they don’t keep working.”

 

Employment consultant Sara Rix says surveys show that up to 80 percent of people think they will work in retirement. A much lower percentage of people actually do (19 percent, according to the AARP).
 

People don’t continue working for many reasons: layoffs, health and unexpectedly becoming a caregiver are just a few.

 

Those still able to work can face tremendous difficulties finding a new job. The elephant in the room is age discrimination....

For the full article by Columnist Rodney Brooks, see "Not Ready to Retire, But Not Finding Work."

March 15, 2016 in Consumer Information, Discrimination, Retirement | Permalink | Comments (0)

Wednesday, March 2, 2016

Making a Decision On a CCRC?

The New York Times ran a story at the end of February about the appeal of a Continuing Care Retirement Community or CCRC.  (Just a note that LeadingAge, a group of aging service organizations is using Life Plan Communities). The Everything-in-One Promise of a Continuing Care Community examines the appeal of CCRCs.  Looking at how it works, the article discusses the often-times hefty entrance fee and compares that to a "fee for service model". The article explains what one gets (and what one doesn't) when one is signing a CCRC contract: "[k]eep in mind that few of these contracts involve direct, conventional purchase of a housing unit. In most cases, the resident buys only the lifetime right to live in a community, take advantage of its range of amenities and services, and receive care there. The units generally are not bought and sold on the open market."

My co-blogger, Professor Pearson is quoted in the article discussing regulatory oversight and transparency:

“There’s a lack of transparency with C.C.R.C.s that’s resulted in weaker trust,” said Katherine C. Pearson, a professor at the Dickinson School of Law of Pennsylvania State University who has testified before Congress on the issue. “You need to visit several facilities, talk to residents, look at past cost increases and five years of financial records.”

Professor Pearson, who talks with continuing care community residents around the country, said there was no one rule of thumb to use when evaluating these communities. A prospective resident generally wants a community that is active and engaged and “supports healthy living,” she said. But given the magnitude of the decision (after all, it is often the last major purchase someone will ever make), it deserves very careful consideration.

“Get as much financial information as you can,” she said. “This is not an impulse buy.”

The article offers some practical advice when considering a CCRC. The article notes it isn't as easy as an apples to apples comparison since there is no government rating system of CCRCs and "[t]he major drawback in evaluating continuing care communities is the complexity of their contracts, which come in a number of variations. Some may require a deposit of up to $1 million, while others may charge only monthly fees. Refunds may be difficult to obtain and depend upon the length of stay and other requirements. Contract details have to be read carefully and financial statements reviewed."  The article suggests

  • review of the contract by a team of professionals, and look specifically at the contract regarding refunds of the entrance fee, whether there is a rescission period, how a decision is made if the resident needs a higher level of care and the financial stability of the company.
  • visiting the CCRC and talking to residents and staff. Visit all areas of the CCRC.

  • compare several CCRCs and check with the appropriate state agency for any complaints filed vs. the CCRC. Ask around-the article suggests the local senior center might be a good place to find out more.

     

March 2, 2016 in Consumer Information, Current Affairs, Health Care/Long Term Care, Housing, Retirement, State Statutes/Regulations | Permalink | Comments (4)

Tuesday, February 23, 2016

Stakeholders and Policymakers Collaborate on Proposals for Better Approach to Financing Long-Term Care

On February 22, 2016, a diverse collection of individuals, representing a broad array of stakeholders interested in long-term care, released their report and recommendations for major changes.  In the final report of the Long-Term Care Financing Collaborative (LTCFC) they propose:

•Clear private and public roles for long-term care financing

•A new universal catastrophic long-term care insurance program. This would shift today’s welfare-based system to an insurance model.

•Redefining Medicaid LTSS to empower greater autonomy and choice in services and settings.

•Encouraging private long-term care insurance initiatives to lower cost and increase enrollment.

•Increasing retirement savings and improving public education on long-term care costs and needs.

The full report is available here.  

ElderLawGuy Jeff Marshall wrote to supplement this post by providing details of the report, written by Howard Glecknan of the Utban Institute.  Thanks, Jeff!  

Members of the Collaborative included:

Gretchen Alkema, The SCAN Foundation; Robert Blancato, Elder Justice Coalition; Sheila Burke, Harvard Kennedy School; Strategic Advisor, Baker, Donelson, Bearman, Caldwell & Berkowitz; Stuart Butler, The Brookings Institution; Marc Cohen, LifePlans, Inc.; Susan Coronel, America’s Health Insurance Plans (AHIP); John Erickson, Erickson Living; Mike Fogarty, former CEO, Oklahoma Health Care Authority; William Galston, The Brookings Institution; Howard Gleckman, Urban Institute; Lee Goldberg, The Pew Charitable Trusts; Jennie Chin Hansen, immediate past CEO, American Geriatrics Society; Ron Pollack, Families USA; Don Redfoot, Consultant; John Rother, National Coalition on Healthcare; Nelson Sabatini, The Artemis Group; Dennis G. Smith, Dentons US LLP; Ron Soloway, UJA-Federation of New York (retired); Richard Teske (1949-2014), Former U.S. Health and Human Services Official; Benjamin Veghte, National Academy of Social Insurance; Paul Van de Water, Center on Budget & Policy Priorities (CBPP); Audrey Weiner, Jewish Home Lifecare, immediate past Chair, LeadingAge; Jonathan Westin, The Jewish Federations of North America (JFNA); Gail Wilensky, Project HOPE;Caryn Hederman, Project Director, Convergence Center for Policy Resolution; Allen Schmitz, Technical Advisor to the Collaborative, Milliman, Inc.

February 23, 2016 in Current Affairs, Ethical Issues, Health Care/Long Term Care, Housing, Medicaid, Medicare, Property Management, Retirement, Science, Statistics | Permalink | Comments (1)