Thursday, January 14, 2016

Do Lawyers "Hear" their Older Clients?

Professor Debra Lyn Bassett at Southwestern Law School has an interesting new article, Silencing Our Elders, in a recent issue of the Nevada Law Journal.  She begins:

We do not think much about silence, perhaps especially in law school and as lawyers. In the law, we tend to ignore silence, typically referring expressly to silence in one of two contexts: (1) the right to remain silent (in the criminal law context) and (2) silence as constituting consent (in the contract law context).  Silence is an overlooked area with tremendous potential for facilitating the practice of law and helping clients.

From this broad introduction to the potential significance of silence, in the second half of her article Professor Bassett focuses more specifically on older clients, and the subtle ways in which "age bias" can influence an attorney-client relationship. For example, she writes:

When lawyers quickly fill in silences by asking additional questions, one risk is that the lawyer’s questions may reflect inaccurate assumptions or even stereotypes. Suppose, for example, that a client seeks legal advice about drafting a will, and the client briefly stops talking. Uncomfortable with the silence, the lawyer rushes in to fill that silence by asking, “Do you want your children to receive everything?” That question reflects an assumption—a common assumption, but an assumption nonetheless—that parents always want to bequeath everything to their children. Perhaps the client indeed does want to leave everything to his or her children, but the lawyer’s preemptive question may cause the client to feel uncomfortable expressing a contrary desire.

Good fuel for discussion in a variety of courses.  

My thanks to Dickinson Law Professor Laurel Terry for sending the link to this article.

January 14, 2016 in Consumer Information, Discrimination, Retirement, Science | Permalink | Comments (0)

Monday, January 11, 2016

WSJ: Self-Protection Tips for Avoiding Financial Exploitation

Illinois Law Professor Richard Kaplan alerted us to an article providing tips useful to consumers of any age on avoiding financial abuse and misuse of personal financial information.  The Wall Street Journal's article is titled "Protect Your Future Self from Financial Abuse." The advice begins:

To start, financial advisers and other experts suggest creating an inventory of assets—including retirement, brokerage and bank accounts, along with other investments.

 

“Whether it’s on your own or with a financial professional, you need to make sure you are aware of all the different financial accounts you have,” says Gerri Walsh, senior vice president of investor education at the Financial Industry Regulatory Authority, or Finra, the brokerage industry’s self-regulator.

 

This way, she says, an investor knows what he or she needs to keep track of and can provide an easy record for a trusted individual to consult should the investor become incapacitated or compromised.

 

Others suggest looking for opportunities to simplify your financial affairs. For instance, consolidate brokerage accounts spread across multiple firms and consider rolling 401(k) accounts from previous employers into your current plan or an individual retirement account.  

 

Identifying a trusted individual who could help with your affairs is the next step....

 

 

January 11, 2016 in Consumer Information, Elder Abuse/Guardianship/Conservatorship, Retirement | Permalink | Comments (0)

Monday, January 4, 2016

Japan's Aging Population

Aging populations is something faced in every country.  The Wall Street Journal is examining demographics in 2050 as part of Demographic Destiny 2050. WSJ explains it

The year 2050 is right around the corner, and yet it​ is hard to imagine the sweeping changes the world will confront by then. In a multimedia series, The Wall Street Journal helps readers ​envision how we will work, how we will age and how we will live.

Graying Japan Tries to Embrace the Golden Years, an article focusing on Japan,  is accompanied by 360 video as well as the ability to watch in virtual reality. Examining trends and past history of demographics leads some in Japan to be pessimistic about the graying of the population, while others take a different view,

Pessimists say the only way to keep Japan from inexorably drifting into bankruptcy is radical change, like a sudden, sharp influx of immigrants—an unlikely prospect given Japan’s history as one of the world’s most homogeneous cultures.

But a growing number of Japanese executives, policy makers and academics challenge that proposition. They are exploring whether modest adaptations can ease the woes of an aging society, or even turn the burdens into benefits… start[ing] with steering the growing number of healthy 60- and 70-year-olds from retirement into work… point[ing] to new aging-related growth engines, including an automation spending boom to stretch Japan’s declining labor force, and a growing “silver market” of elderly consumers drawing down savings from a lifetime of hard work and thrift….

The article discusses the ups and downs of an elder workforce and the potential of technologies to help workers. It also covers how the increasing aging population impacts the consumer goods market. It's a fascinating read and I think it would be useful to assign to students.

January 4, 2016 in Consumer Information, Current Affairs, Health Care/Long Term Care, International, Retirement | Permalink | Comments (0)

Monday, December 21, 2015

If Your Clients are Mostly "Older," Are You Practicing Elder Law?

The November/December 2015 issue of the ABA magazine (Volume 32, Issue 2) GPSOLO, the publication for members of the Solo, Small Firm and General Practice division of the American Bar Association, is devoted to Elder Law. The issue can be found on-line (and viewing does not seem to be restricted to division members!).  The articles are also available on Westlaw.

Articles include:

  • How to Make Money Practicing Elder Law, by Andrea G. Van Leesten, who practices in California and who is the 2015-16 Diversity Director for the Division;
  • Representing Elder Physical Abuse Victims,  by California practitioner Mark Redmond, who has "focused primarily on representation of elders in cases of physical and financial abuse for the last 15 years;" 
  • Advocating for Elders Suffering Financial Abuse and Exploitation, by Nicole Le Hudson, who focuses her San Diego practice on disability and elder law and who is a "member of the court-appointed attorney panel for conservatorships;"
  • The State of Age Discrimination Law: An Update, by Brian McCaffrey, who focuses his New York practice on employment litigation;
  • Estate Planning for Old Age and Incapacity, by Sheila-Marie Finkelstein, who practices estate planning in Irvine, California; 
  • Counseling Clients about Health Care Toward the End of Life, by Sally Balch Hurme (who I just discovered while reading her article recently retired from 23 years of consumer advocacy with AARP -- but who is still clearly very active in elder law, thank goodness!); 
  • How to Fund Long-Term Care Without Medicaid, by Eileen Walsh, from Louisville,  and I have to admit I read her article first - she explores Medicare, insurance, VA benefits and reverse mortgage options); and 
  • What Every Lawyer Needs to Know About Planning for Retirement, by Cynthia Sharp who "works with motivated lawyers seeking to generate additional income."   

Charlie Sabatino brings to bear his 30 years of experience and careful thought to the question of whether having older clients automatically means you are practicing "elder law," in his column "GP Mentor: When Does Serving Older Clients Become Elder Law?"  Hint?  The answer may depend on whether you are working in the best interests of the senior.

In addition, there is a great Resource Guide of recent texts on Elder Law  and the Division Chair's essay on recognizing Elder Abuse. PLUS, there's a detailed shoppers's guide to cameras, mobile phones ans more in the 2015 Tech Gift Guide -- for those of you still searching for gift ideas for your favorite elder law attorney!  

December 21, 2015 in Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Retirement | Permalink | Comments (0)

Sunday, December 20, 2015

Social Security: File and Suspend No More

Back in October, as part of the Bipartisan Budget Act, Congress eliminated a couple of Social Security claiming strategies (§ 831) that have been getting a lot of press (one is known as "file and suspend", the other, "restricted application").  The New York Times ran an article on December 4, 2015 discussing these strategies that are being eliminated and what options remain for individuals planning for their retirement.  The End of Social Security Loopholes: What Now? examines the role of life expectancy in deciding when to start collecting Social Security retirement benefits. But, "[f]iguring out the best strategy is difficult because few retirees know how long they will live." The article discusses the variables that go into deciding which strategy is best  and notes that these are not "one size fits all" decisions.

The Washington Post also ran an article about the elimination of these two claiming strategies and what that means for individuals planning for their retirement. As one Social Security strategy disappears, consider other smart options focuses on the elimination of the file and suspend strategy and offers 4 tips, including obtaining advice and preparing a budget.

December 20, 2015 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement, Social Security | Permalink | Comments (1)

Sunday, December 13, 2015

More on Elder Abuse

I don't know whether the issue of elder abuse is just getting more coverage or whether cases of elder abuse are increasing. We all know that elder abuse is a global issue.  I ran across a few recent articles about elder abuse that I wanted to share in this post.

First, The Conversation published Why are we abusing our parents? The ugly facts of family violence and ageism . The article opens with the story of Gwen, who was being abused by her son. The article suggests that "[o]lder people experiencing abuse from family members share the same experience as women suffering intimate partner violence in having someone close to them, whom they ought to be able to trust, perniciously erode their sense of safety and wellbeing through excessive use of power and control." But, when its a child who is the perpetrator, "feelings of parental love and responsibility coupled with shame and guilt for having “failed” as a parent often stop the parent from seeking help and protecting themselves." Turning to Australia, the article examines the prevalence and frequency of multiple abuses of a victim. "For example, financial abuse was coupled with another form of abuse in 65% of cases." Linking abuse and ageism, the article offers that "[promoting the dignity and inherent value of older people is a crucial component of elder abuse prevention."  The article calls for educating professionals, elders and society about the issues.

Next, a newspaper in Bend, Oregon ran the story, Financial exploitation hits close. Report: Most financial exploitation done by someone the victim trusts. "A report by Oregon’s Office of Adult Abuse Prevention and Investigations found nearly three-fourths of Central Oregon’s financial-exploitation cases involved someone known or trusted by the victim." The cases in Oregon are similar to what is happening across the country:"[s]tate investigators recorded 1,059 cases in which people 65 or older, who lived on their own or with a loved a one, were victims of theft or someone had misused their money, medication or property...Financial exploitation for seniors living outside of a long-term care facility was the most common type of elder abuse for the third year running in 2014."

Finally (but finally only for this post; I have no doubt that there will be more posts on elder abuse, unfortunately) CNBC ran a story on elder abuse with a headline that caused me to do a double-take.  Why seniors don't fear elder financial abuse discusses a new report from Allianz Life that "queried over 1,200 seniors and more than 1,000 people ages 40 to 64 about seniors' finances and found that among the seniors, 89 percent were confident they could handle their money on their own. At the same time, 22 percent of the younger group said they were not confident in their own ability to recognize elder financial abuse, or were not sure."

The CNBC story indicates that family members worry more about the elder being a victim than the elder does. "The confidence of the seniors may make them even more vulnerable to financial scams or financial abuse by friends or family members, said Walter White, president and CEO of Allianz Life. ..."Everything we understand about the prevalence of the issue would suggest that confidence is misplaced," he said."  The CNBC story cites some other reports that provide good statistics and discusses the connection between financial exploitation and ultimately a nursing home placement.

That kind of loss can devastate a person's finances, and elder financial abuse is often a major reason why seniors wind up in nursing homes and assisted living facilities on public assistance. Dr. Mark Lachs, co-chief of the division of geriatrics and gerontology at Weill Medical College, has studied the issue and found that an older person who falls victim to abuse, including financial exploitation, is four times more likely to be placed in a nursing home, after adjusting for other known risk factors for nursing home placement.

Discussing the reasons a victim may fail to report financial exploitation, the story adds overconfidence as a reason, citing to the Allianz report. The CNBC story concludes with some links to resources to help fight elder abuse.

More information about the Allianz report is available here.  Allianz also offers a number of materials for elders and professionals available on the Allianz website, here.

 

 

December 13, 2015 in Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Health Care/Long Term Care, Property Management, Retirement, Statistics | Permalink | Comments (0)

Wednesday, November 25, 2015

Giving Thanks for Family Caregivers

With Thanksgiving looming, it seemed appropriate to take a moment to say thanks to all the family caregivers.  And on the subject of caregivers, I wanted to share this 5 Facts about Family Caregivers published by Pew Research Center. 

Here are the five facts:

  • In the US there are 40.4 million unpaid caregivers for those 65 and older.
  • The caregivers are most likely between 45-64 years old. 
  • The most common caregiving kids perform helping around the house, doing errands and fixing things around the house.
  • A major segment of caregiving is providing emotional support. 
  • Most kids find helping their parents rewarding, although a few find it stressful.

This is good information to share with your students as well. So read the full document, thank a caregiver and have a Happy Thanksgiving!

November 25, 2015 in Consumer Information, Current Affairs, Dementia/Alzheimer’s, Health Care/Long Term Care, Housing, Retirement | Permalink | Comments (0)

Thursday, November 19, 2015

Yours, Mine or Ours: Who is Responsible for Social Care of Older Persons?

On November 26, 2015, the University of Leeds' School of Law in England will be host to a program on "Yours, Mine or Ours: Who is Responsible for Social Care of Older Persons?"  I'm very pleased to be part of the panel, under the leadership of Professor Subhajit Basu, PhD.  We will use a research report we completed with colleagues in 2015 for the Commissioner of Older People in Northern Ireland (COPNI), to offer comparative international examples of legislation and public policy initiatives that support the wide array of potential care needs for older persons.  We'll be looking beyond the needs for health care. 

One likely focus of the discussion is a proposal for a state-supported home visits by trained professionals, including social work professionals, for individuals age 75 or older, with a goal of providing advance assistance to the individual or family in meeting needs.  The proposal now under consideration in Northern Ireland has roots in other jurisdictions we studied, including Denmark. 

In Denmark, one of the inspirational leaders for "preventative home visits" is Mikkel Vass, M.D. at the University of Copenhagen. Beginning in 1998, Danish laws established an obligation for municipalities to offer "all citizens 75 years and older two annual preventative home visits."   A great deal of freedom to design the content of the home visits was given to the municipalities, but the goals are:

  • to support personal resources and networking; and
  • to offer social support, thereby preserving functional ability

In his study of 15+ years of home visit operations, Dr. Vass concludes that with a nationally-supported home visitation program:

  • Functional decline can be prevented;
  • Education of professionals makes a difference to the interview success;
  • Interdisciplinary education makes a greater difference to the program success;
  • To maintain effectiveness, education must be ongoing and based on simple messages and professional routines that respect local healthcare cultures; and
  • Operation can be cost-neutral.

Cost neutrality -- that will be important to every element of modern social care programs -- including home visits.

November 19, 2015 in Consumer Information, Current Affairs, Ethical Issues, Health Care/Long Term Care, Retirement | Permalink | Comments (1)

Monday, November 16, 2015

When is long enough enough for a judicial term?

I've heard periodically some conversations about attorneys practicing law much longer than they should because they develop significant cognitive deficits.  I've also heard similar conversations occasionally about judges, primarily in the context of judges who hold lifetime appointments. The AP ran a story in early November on this topic, featuring the efforts of the 9th Circuit to address the issue of judges who experience significant cognitive declines while still sitting the bench.

[T]he 9th U.S. Circuit Court of Appeals, which includes federal courts in California and eight other Western states, has taken a more pro-active approach to the problem of mental decline by trying to get its judges to think about the condition, plan for it and handle it appropriately if it comes up.

The circuit court holds regular seminars led by neurological experts to teach its chief judges about the signs of cognitive impairment. It has set up a hotline where court staff and judges can get advice about dealing with signs of senility in colleagues. It has also encouraged judges to undergo cognitive assessments and designate colleagues, friends or family who can intervene if concerns arise about their mental health.

The article discusses the pros and cons of mandatory retirement or term limits and notes that the 10th Circuit had two cases that might fall in the category of cognitive decline. The article quotes a 9th Circuit judge who decided to stop hearing almost all cases in an abundance of caution. This judge noted that "'if the goal is to work until you are no longer able, you will work a couple of years too long...'"

The AP story was picked up by a number of publications, including the ABA Journal

 

November 16, 2015 in Cognitive Impairment, Current Affairs, Dementia/Alzheimer’s, Retirement | Permalink | Comments (1)

Thursday, November 12, 2015

Register Now-Webinar on Veterans Pension Benefits

The ABA is offering a webinar on VA Pension: Income Security for Veterans and Their Family.  The 90 minute webinar is scheduled for November 17th, 2015 from 1-2:30 p.m. est. The website offers the following description of the webinar

This webinar will cover eligibility of veterans and their dependents for VA pension.

Panelists will discuss how to get the best results for a client looking to obtain a VA pension. Practical pointers on obtaining the highest amount for pension will be discussed, as well as how a client can keep that amount each year. Practice tips on dealing with a VA debt—due to an overpayment issue related to a VA pension—will also be provided. This presentation will give practitioners an understanding of the law and provide practical tips on how to work within the confines of the VA.

To register, click here.

Kudos to my Stetson colleague, Stacey-Rae Simcox, one of the panelists!

November 12, 2015 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Programs/CLEs, Retirement, Veterans, Webinars | Permalink | Comments (0)

Wednesday, November 11, 2015

Successive Generations Living Longer Than Before

I was reading a recent article in the New York Times on estimating longevity in the context of the Social Security Trust Fund. Your Kids Will Live Longer Than You Thought ran in the NY Times on November 10, 2015.  The article discusses statistics and probabilities, explaining how life expectancies are calculated.  Looking at the Social Security projections of life expectancy, the article notes that SSA is likely too conservative in their longevity projections.

The Technical Panel on Assumptions and Methods established by the Social Security Advisory Board, an independent government agency that advises Social Security’s trustees on matters including actuarial assumptions, says Social Security is systematically underestimating future declines in mortality rates, and therefore underestimating the likely life spans of young Americans.

So this is a good news-bad news scenario. Good news for those who get more years of life, bad news for Social Security.  "[O]ne quirk of Social Security is that a piece of obvious good news (People will live longer than we thought!) is bad news from the narrow perspective of paying for retirement benefits (The government will have to pay benefits longer!)."  So how to handle Social Security's too conservative projections? The Congressional Budget Office "tweaked" them by increasing them.

November 11, 2015 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement, Social Security, Statistics | Permalink | Comments (0)

Thursday, November 5, 2015

U.S. Treasury myRA

The U.S. Treasury announced the creation of a new retirement savings vehicle, myRA.  According to the blog post announcing this, myRA is a "retirement savings account for individuals looking for a simple, safe, and affordable way to save for their retirement. Over thirty percent of all American households have no retirement savings. myRA provides a way to start saving for retirement."

MyRA is designed for those who don't have an option for a retirement savings plan through their jobs.  There are some benefits to myRA:

  • There’s no cost and no fees to open and maintain an account;
  • The investment will not lose money;
  • U.S. Treasury backs the investment;
  • Account owners choose how much to save ($2, $20, $200 – whatever fits their budget);
  • If account owners change jobs, the account stays with them; and
  • Account owners can withdraw the money they put in without tax and penalty.

More information about the program is available from the myRA website, available here.

November 5, 2015 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement | Permalink | Comments (0)

Sunday, November 1, 2015

And the New Name for CCRCs Is...

At the opening general session for LeadingAge's 2015 Annual meeting on November 1,  the results of two years of research into consumer preferences for LTC and senior housing, including consumer and provider surveys and focus groups, has culminated in a new identity for Continuing Care Retirement Communities (CCRCs).  And  -- drum roll,  please -- the new name is Life Plan Communities.

The thinking is interesting.  First,  LeadingAge researchers learned that while current residents embrace the name "Continuing Care Retirement" for their communities, younger persons reject the notion of both "retirement" and "care."  Thus, Life Plan Communities are viewed as playing to the "engagement" model of aging, where individuals have more control over their options, and are less likely to be passive in their response to provider-defined theories of care. 

In announcing the new name, outgoing LeadingAge CEO Larry Minnix and other leaders emphasized that the change is intended to be part of a conversation, to stimulate thinking and reaction to what it means to plan for future needs.  They recognize that states may or may not embrace the name change, including whether state laws will be amended to reflect the new identity for purposes of licensing and regulation.

Will a rose by any other name smell as sweet -- or, perhaps, even sweeter? 

 

November 1, 2015 in Consumer Information, Current Affairs, Health Care/Long Term Care, Housing, Retirement | Permalink | Comments (0)

Wednesday, October 21, 2015

The Importance of Understanding Trusts in Family Law, Especially If Divorce Looms

The ABA Section on Family Law has devoted the entire Fall 2015 issue of its Family Advocate magazine to "Crossing Paths with a Trust."   The paper copy of the issue just appeared on my desk. The opening editorial advises family law attorneys advising clients considering divorce not to fear trusts:

Lawyers who simply take a deep breath and read the trust will often be surprised to learn that they have in their hands a road map for how assets will be managed, who gets what, when they get it, and under what terms. 

The articles in the issue include a "plain English guide to trusts as a means of orchestrating assets in divorce cases," how trusts can interact with disclosure requirements for premarital agreements, how to address equitable division of interests assigned to trusts, the use of child support or alimony trusts, and the unique potential advantages for using trusts for "special needs" planning for disabled children.  The issue ends with a bonus -- a primer on "will basics."

The articles underscore what I sometimes find myself saying to law students, that courses on "wills, trusts and estates" are about advanced family law issues, and that if families fail to address disputes among family members while they are still living, the issues may not be any less complicated when the asset-holding family member passes away. 

The entire issue seems like a good resource for a wide audience, including law students.  Unfortunately, the on-line version of Family Advocate issues is restricted to ABA Family Law Section members, at least during the first few weeks of  publication.  Apparently you can purchase paper copies (see for example the rates for the previous issue, for  Summer 2015) , including bulk orders, although I find there is often a lag time for specific issues to become available to purchase.  I guess you have to keep checking!    

October 21, 2015 in Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Property Management, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Monday, October 19, 2015

Market Trends in Financing for Senior Housing Options

Recently I was reading an issue of The Senior Care Investor, a subscription-based news service that reports on the "World of Senior Care Mergers, Acquisitions, and Finance," and doing so since 1948. 

For approximately the last three years, most of the M & A activity has been in assisted living (AL) and memory care (MC).  Senior Care Investor reports that CCRCs are "beginning to make a comeback" as the housing market recovers and prospective residents are again able to use equity in their homes to finance transitions into CCRCs.  The most recent issue also indicates some development money is returning to the skilled nursing facility market, even as overall M & A activity in senior housing is lower in 2015 than in 2014.  

I've been watching quite a bit of activity over the last few years in conversions of nonprofit senior housing operations to "for profit" and there is more evidence of that in the latest report. But the most recent issue (Issue 9, Volume 27) also reports on a "rare for-profit to not-for-profit deal," with a New Mexico-based company, Haverland Care LifeStyle Group, purchasing a new AL/MC community in Oklahoma.  

Also, the Senior Care Investor reports on a faith-based, not-for-profit CCRC provider that has decided to sell an entrance fee model (one that's in transition to an "all rental" model) that will offer independent living, AL, MC units and nursing home beds.  What happens when senior housing operations are fully "private pay" AND "rental" models AND disconnected from a faith-based organization?  Can they maintain their tax-exempt status? In other words, if the public is paying market rates (and thus higher rates based on any market increases) with no promises of future care if the residents run out of money, is that senior housing enterprise still a nonprofit operation entitled to be treated as exempt from federal income taxes?   

October 19, 2015 in Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Property Management, Retirement, State Statutes/Regulations | Permalink | Comments (1)

Monday, October 12, 2015

Livable Communities=Good Economy

AARP ran an article on the impact that livable communities have on local economies. The Livability Economy Livable Communities bring financial benefits to homeowners, business and local governments. covers a new report from AARP on The Livability Economy: People, Places and Prosperity.

This 28 page report focuses on 4 domains for livability: compactness, transportation, diversity of housing and land use integration.  This is how livability is explained in the report

Livability is a high-level performance measure of neighborhood design factors that are critical to high quality of life for people of all ages. The Livability Economy identifies a framework based on these design factors that includes four essential livability outcomes, and documents how communities have benefited economically by focusing on these outcomes ....

October 12, 2015 in Consumer Information, Current Affairs, Housing, Retirement | Permalink | Comments (0)

Friday, October 2, 2015

Planning Well For The End of Life (as a Foundation)

I've long been fascinated by the history of Atlantic Philanthropies (AP), starting when I first became aware of the behind-the-scenes role of the founder, Chuck Feeney, in funding extraordinary educational endeavors in Ireland, and, as I soon learned, also funding important social and health advocacy movements around the world.  The end of AP as a multi-million dollar grant-making foundation is near at hand, although not the end of its impact.

Linked here is the latest report from the CEO of AP, Christopher Oechsli, with linked reports on AP's final grants, including its support for a groundbreaking National Dementia Strategy in Ireland.

October 2, 2015 in Current Affairs, Dementia/Alzheimer’s, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, International, Retirement | Permalink | Comments (0)

Thursday, October 1, 2015

Life Expectancy and Income: A New Report

The National Academies Press has issued a new report, The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses.  Here is a description from the book

he U.S. population is aging. Social Security projections suggest that between 2013 and 2050, the population aged 65 and over will almost double, from 45 million to 86 million. One key driver of population aging is ongoing increases in life expectancy. Average U.S. life expectancy was 67 years for males and 73 years for females five decades ago; the averages are now 76 and 81, respectively. It has long been the case that better-educated, higher-income people enjoy longer life expectancies than less-educated, lower-income people. The causes include early life conditions, behavioral factors (such as nutrition, exercise, and smoking behaviors), stress, and access to health care services, all of which can vary across education and income.

Our major entitlement programs ? Medicare, Medicaid, Social Security, and Supplemental Security Income ? have come to deliver disproportionately larger lifetime benefits to higher-income people because, on average, they are increasingly collecting those benefits over more years than others. This report studies the impact the growing gap in life expectancy has on the present value of lifetime benefits that people with higher or lower earnings will receive from major entitlement programs. The analysis presented in The Growing Gap in Life Expectancy by Income goes beyond an examination of the existing literature by providing the first comprehensive estimates of how lifetime benefits are affected by the changing distribution of life expectancy. The report also explores, from a lifetime benefit perspective, how the growing gap in longevity affects traditional policy analyses of reforms to the nation?s leading entitlement programs. This in-depth analysis of the economic impacts of the longevity gap will inform debate and assist decision makers, economists, and researchers.

You can download the report as a pdf for free, read the report online, or purchase a hard copy of the report for $64.  Click here for more information.

October 1, 2015 in Current Affairs, Federal Statutes/Regulations, Retirement, Social Security | Permalink | Comments (0)

Wednesday, September 30, 2015

Do Tontines Have a Valid Role in Modern Retirement Planning?

Jeff Guo, writing for the Washington Postrecently offered a provocative look at "tontines" as a theoretical retirement planning alternative to "annuities." Apparently these are advocated by some modern legal and financial experts:

Economists have long said that the rational thing to do is to buy an annuity. At retirement age, you could pay an insurance company $100,000 in return for some $5,000-6,000 a year in guaranteed payments until you die. But most people don’t do that. For decades, economists have been trying to figure out why....

 

But there’s also some evidence that people just irrationally dislike annuities. As behavioral economist Richard Thaler wrote in the New York Times: “Rather than viewing an annuity as providing insurance in the event that one lives past 85 or 90, most people seem to consider buying an annuity as a gamble, in which one has to live a certain number of years just to break even.”

 

Here is where tontines come in.  If people irrationally fear annuities because them seem like a gamble on one's own life, history suggests that they irrationally loved tontines because they see tontines as a gamble on other people's lives.

 

A simple modern tontine might look like this:  At retirement, you and a bunch of other people each chip in $20,000 to buy a ton of mutual funds or stocks or whatever.  Every year, the group withdraws a predetermined amount and divides it among the remaining survivors.  You might get a bonus one year, for instance, because Frank and Denise died....

 Want to know more?  Read It's Sleazy, It's Totally Illegal, and Yet It Could Become The Future of Retirement.  Hat tip to David Pearson for sharing this story. 

September 30, 2015 in Consumer Information, Crimes, Estates and Trusts, Ethical Issues, Federal Statutes/Regulations, Retirement, State Statutes/Regulations | Permalink | Comments (0)

Friday, September 25, 2015

Does An Inheritance Improve Your Retirement Security?

The Center for Retirement Research at Boston College released an issue brief this month on How Do Inheritances Affect the National Retirement Risk Index?

You might immediately conclude that receiving an inheritance would definitely improve one's retirement security, but the answer really is the classic law school "it depends" answer.  "The bottom line is that, while anything that boosts households’ assets is beneficial to their financial situation, inheritances are not likely to be decisive in determining retirement preparedness for many households."  The report notes that the very wealthy have achieved retirement security so an inheritance won't make much difference.

On the one hand, past research has shown that higher-income households – who are less likely to be unprepared for retirement – are more likely to receive inheritances and to receive larger amounts than their lower-income counterparts. On the other hand, the anticipated inheritance receipts of low- and middle-income households represent a much larger percentage of their current wealth, suggesting that inheritances could potentially be more influential in boosting their retirement security.

A pdf of the report is available here. Key findings from the report are available here.

 

 

September 25, 2015 in Current Affairs, Retirement | Permalink | Comments (0)