Wednesday, June 14, 2017
According to a recent story in Investment News, FINRA is going to provide brokerages with more guidance on dealing with "rogue brokers." Finra CEO Robert Cook promises to give brokerages more guidance on overseeing rogue brokers explains that "[FINRA] intends to help brokerages better identify and supervise brokers with checkered disciplinary histories who may pose risks to investors. In coming months, the broker-dealer self-regulator will delineate [FINRA's expectations]...." The article relates pressures on FINRA to do something about brokers that move from firm to firm.
At its May meeting, Finra's board advanced proposals that would allow tougher penalties for brokers with certain past infractions, enable disciplinary hearing panels to restrict the activities of brokers and firms while a case is on appeal, and require firms to strengthen supervision while a "disqualification request" is under review or a broker is appealing a hearing decision.
There's a working group on this issue and FINRA is considered other measures, with any final regs needing SEC approval.
Tuesday, June 6, 2017
Our exclusive Retirement Savings Calculator will help you estimate the future value of your retirement savings and determine how much more you need to save each month to reach your retirement goal. Actual results will depend on how much you contribute to your retirement accounts, the rate-of-return on your investments, and how long you live. (The calculator does not take taxes on your retirement income into account so your actual spendable income will be less.)
Try it out. It really is quick and easy. It would be a great tool to use with our students to get them thinking about financial security and the importance of planning for retirement.!
Tuesday, May 23, 2017
As I reported here for the first time recently, Pennsylvania's Governor Wolf has proposed consolidation -- or as he prefers to call it -- unification -- of four separate administrative agencies, the Departments of Aging, Health, Human Services (formerly Public Welfare) and Drug & Alcohol Treatment Programs. Are similar budget-driven changes occurring in your state?
As I catch up with events in Pennsylvania, I'm learning from readers about growing concerns about the possible merger.
- As one recently retired PA legislator pointed out, there seems to be little in the way of a written plan for how services will be handled under this merger. Rather, the merger appears mostly as a description of budget items, with a lot of "minus" signs to indicate cuts. Perhaps by design, Pennsylvania government is often a bad example of transparency for governments. What is the real plan, if any?
- With the consolidation, at a minimum, older Pennsylvanians would be losing a cabinet level post, their singular, dedicated spokesperson. This would be likely to affect all future budget and programming battles.
- The timing is, to use a favorite Trump adjective, "sad." While the leading edge of the big wave of aging baby boomers began to be felt a few years ago when those born in in 1945 started turning age 65 in 2010, the "real" need for an effective advocate is when boomers start turning age 75, age 80 and so on, the higher ages when they are more likely to need or question access to services.
Perhaps of greatest significance is the potential impact of consolidation on the process for assessment of need for services and assistance, especially Medical Assistance.
Under the current allocation of resources, "assessment" of need is handled by individuals employed under the authority of Pennsylvania's Department of Aging.
However, the financial allocations are currently determined under the authority of the Department of Human Services. Consolidation might make sense on paper, but wait!
As one of my mentors in aging, Northern Ireland's former Commissioner of Older People Claire Keatinge, says, to be helpful, fair and effective, any individual assessment of need for health care, social care and security, should be exactly that -- individualized and focused on the client, and should not be simply a match to "what services (if any) are available." That process-based distinction is critical to determining current and future funding priorities.
In Pennsylvania, the lion's share of budget and personnel for aging services has long been housed in the Department of Human Services (formerly Public Welfare), but those workers -- perhaps by necessity and perhaps by design, have often functioned as dedicated bean counters, as in "here's what services we fund, so do you or don't you meet the eligibility criteria?"
By losing the aging assessment focus of the current Department of Aging, it seems likely the state would compromise, and perhaps lose entirely, the independent thinking and opportunity for critical needs-based assessment.
Several elder-focused organizations have raised these and other key points in opposition to the existing budget-based consolidation proposal. Those active in the debate include:
- The Pennsylvania chapter of the National Association of Elder Law Attorneys (PAELA) has asked thoughtful legislators to "oppose such consolidation" as presented in the current budget proposal. As Pittsburgh Elder Law attorney Julian Gray testified on May 1 in state Senate hearings, a "bigger" agency is not necessarily a "better" agency.
- Representatives for the service organization for Pennsylvania senior service workers, P4A, testified strongly in favor of the role of the Department of Aging as the advocate for the "unique needs of seniors." Speakers focused too on the Department's historical role in protecting and managing a unique funding stream dedicated to seniors, "lottery" funds.
- Long-time practitioner and elder law guru, Jeff Marshall, has a comprehensive commentary, with links, detailing the history and importance of Pennsylvania's Department of Aging. There's a simple bottom line expressed here -- "if it ain't broke, don't fix it."
- Related articles
Thursday, May 18, 2017
Social Security is a popular social insurance program administered by the Social Security Administration. It provides critical resources and economic security to many workers who are retired or have a disability, as well as to their survivors and dependents. This webinar is designed for legal services and other advocates who are just getting started in the field and others who want to learn more about the essentials of the program. This Legal Basics: Social Security webinar will cover the basics of the Social Security program and the rules surrounding it, including general information on how the program works and who is eligible to claim benefits (including spouses and children). We will also discuss other basic information such as timing considerations when applying for benefits, how benefits are calculated, and suggestions on where to find further information.
To register for this free webinar, click here.
Friday, May 12, 2017
On May 10, 2017, my research colleagues Gavin Davidson (Queens University Belfast) and Subhajit Basu (University of Leeds) participated in a policy briefing at Stormont, the Northern Ireland Assembly in Belfast. They appeared in support of recommendations by the Commissioner of Older People (COPNI) Eddie Lynch on a major plan for modernization of social care programs for vulnerable adults (of any age).
Professors Davidson and Basu focused on three key recommendations:
- Northern Ireland should have a single legislative framework for adult social care with accompanying guidance for implementation. This could either be new or consolidated legislation, based on human rights principles, bringing existing social care law together into one coherent framework.
- All older people in Northern Ireland, once they reach the age of 75 years, should be offered a Support Visit by an appropriately trained professional. This will be based on principles of choice and self-determination and is aimed at helping older people to be aware of the support and preventative services that are available to them.
- Increasing demands for health and social care reinforce the importance of considering how these services should be funded. All future funding arrangements must be equitable and not discriminate against any group who may have higher levels of need.
The audience, which included researchers, social service program administrators and elected officials (not only from Northern Ireland, but elsewhere, including the Isle of Man), reportedly responded strongly to the recommendations, especially to the concept of specially-trained "support visitors," offered to persons age 75 or older. The intent is to provide individuals with planning support and, where needed, medical assessment. Guidance and information is often needed for pre-crisis planning, thus moving in the direction of prevention of crises and reduction of need for last-minute response. The support visitor concept has been used successfully in Denmark and other locations in Europe. The next step for Northern Ireland would likely be a pilot or test project.
As a co-author of the research reports that led to the COPNI recommendations, working with Professors Gavin Davidson and Subhajit Basu as part of a team headed by Dr. Joe Duffy of Queens University Belfast, I found it an interesting coincidence that at almost the same time as the Northern Ireland government session, I was addressing similar interests in "preventative" planning while speaking on elder abuse in a "Day on the Hill" program at the Capitol in Pennsylvania, hosted by the Alzheimer's Association. It is clear that on both sides of the Atlantic, we are interested in cost-effective, proactive measures to help people stay in their homes safely.
Wednesday, May 10, 2017
Writing for the Institute for Family Studies, George Washington Law Professor Naomi Cahn and University of Minnesota Law Professor June Carbone dig into the black and white of statistics on "gray" divorce, with interesting observations. For example:
First, some good news for everyone: the divorce rate is still not all that high for those over the age of 50. Yes, it has doubled over the past 30 years: in 1990, five out of every 1,000 married people divorced, and in 2010, it was 10 out of every 1,000 married people. And yes, the rate has risen much more dramatically for gray Americans than for those under 50; in fact, there was a decline in the rate for those between the ages of 25-39. But the divorce rate for those over 50 is still half the rate for those under 50.
Divorce for older individuals often does have significant impacts for individuals in retirement, as they point out:
These statistics don’t mean that gray divorce isn’t a problem. Those who divorce at older ages, like those who divorce at younger ages, tend to have less wealth than those who remain married, with the gray divorced having only one-fifth of the assets of gray married couples. Compared to married couples, gray divorced women have relatively low Social Security benefits and relatively high poverty rates. While gray married, remarried, and cohabiting couples have poverty rates of four percent or less, 11 percent of men who divorced after the age of 50 were in poverty, and 27 percent of the women were in poverty.
For more, read "Who is at Risk for a Gray Divorce? It Depends."
Sunday, April 23, 2017
Justice in Aging has released a new fact sheet, New Guidance from SSA on Spousal & Survivors Benefits for Married LGBT Individuals. "On March 1, 2017, the Social Security Administration (SSA) announced it would reopen any decision to deny spousal or survivors benefits to a same-sex spouse based on a discriminatory marriage ban, which resulted in a loss of benefits to the individual who filed the claim." The fact sheet notes an SSA ruling and POMS. "This policy change applies to applications for spousal or survivors benefits that SSA denied prior to the Windsor and Obergefell decisions because it did not recognize their marriages. Even those who began receiving SSA benefits following the Supreme Court decisions may be due retroactive benefits for the period between when they first applied (and were denied) and when SSA finally recognized their marriage." The fact sheet also explains who is not affected as well as who might be. The fact sheet concludes explaining that SSA is in the process of reaching out to 800 beneficiaries whose benefits were denied to tell them their applications are being reopened.
Click here to read the full fact sheet.
Friday, April 14, 2017
The AARP blog, Thinking Policy last week posted about new data: Labor force participation rate for people ages 55+ edges up in March
The monthly Employment Situation Report from the Bureau of Labor Statistics (BLS) shows the economy added 98,000 jobs in March 2017 — an unexpectedly smaller increase from the first two months of the year. The number of persons ages 55+ who are employed increased slightly from February. Meanwhile, the unemployment rate for those ages 55 and older remained unchanged, at 3.4 percent and approximately 1.2 million unemployed. The percentage of the 55+ population that is either working or actively seeking work, i.e. the labor force participation rate, increased slightly to 40.1 percent. The labor force participation rate of persons ages 55+ has remained at around 40 percent throughout the past year. In March the labor force participation rate of men ages 55+ was 46.1 percent, compared with 34.9 percent for women ages 55+.
The post specifically examines the data about women in the workforce, with the highest percentage of those 55 and older hitting the high in 2013. "Education has been a key factor influencing women’s labor force participation and is likely to continue to have an impact in the future. Over the past several years, women earned the majority of college degrees of all levels. If this trend continues, employers faced with the need for college-educated workers are likely to seek more ways to attract and retain female employees. This in turn may influence the number of women in the labor market – and the number who continue to work at older ages."
Wednesday, March 22, 2017
Are you a Parrot Head? (If you don't know what I mean, the answer to the question is no). Whether you are a Parrot Head or not, wouldn't you love to retire to Margaritaville? Now you can! Jimmy Buffet is opening a chain of 55+ communities within the next year or so. Forbes ran a story last week with the exciting news! Jimmy Buffett To Open String Of Margaritaville Retirement Homes By 2018 explains the plan: "[t]he golden years are looking even brighter with news that Jimmy Buffett is planning to open a string of luxurious Margaritaville retirement home communities, the first in Daytona Beach, Florida. Retirees will be able to live in a paradise where the party never stops and 'growing older, but not up' is encouraged. The price tag will start in the low $200s and furnished models are scheduled to open in early 2018 for those '55 and better.'"
So what will we do if we live in Margaritaville? According to the story "[t]his utopia promises retirees exciting recreation, fitness facilities, lap pools, spas, personal beachfront access, unmatched dining and an entertaining nightlife. Minto Communities has 60 years of experience developing award-winning, master-planned communities and building quality homes for over 80,000 families."
You can read more about this project here .
See you there!
PS-have the song stuck in your head yet?
Thursday, March 9, 2017
You know experience is a good teacher. So imagine getting advice about retirement from someone who is living it? The New York Times ran a wonderful article, From the Elders to the Kids: What I Wish I’d Known. The assignment for a group of "journalism students from five colleges and universities [was] to talk with retirees, and find out what they wish they had known when they were the students’ age." The conversations were recorded and can be viewed on the website. One thing that struck me is that of those individuals featured in the print part of the project retired at a fairly "young" age, ranging between 51 and 67.
Questions included what did the elders wish they had known about retirement when they were the ages of the interviewers, what they wished they had done in preparing for retirement, living a healthy lifestyle, keep active, etc. In one of my classes, I have students interview someone they know who they consider to be an elder. I'm going to include the "what should I know now about preparing for retirement" to the list of questions the students ask. Anyone else assign any similar exercise to their students?
Wednesday, March 8, 2017
The teachers' pension fund in Puerto Rico is the latest example of an under-funded government-operated retirement plan. A unique complication of the Puerto Rico teachers' plan is the decision to opt out of Social Security as a separate form of retirement income. In a recent New York Times article, the reporter makes the the analogy to a Ponzi scheme:
Puerto Rico, where the money to pay teachers’ pensions is expected to run out next year, has become a particularly extreme example of a problem facing states including Illinois, New Jersey and Pennsylvania: As teachers’ pension costs keep rising, young teachers are being squeezed — sometimes hard. One study found that more than three-fourths of all American teachers hired at age 25 will end up paying more into pension plans than they ever get back.
“I think they’re really being taken advantage of,” said Richard W. Johnson of the Urban Institute, a co-author of the research. “What’s so tragic about this is, often the new hires aren’t aware that they’re getting such a bad deal.”
The problem is magnified by the fact that the Puerto Rico teachers union — like many teachers and police unions around the country — opted out of Social Security long ago, hoping it could save both workers and the government money by not paying Social Security taxes.
That decision was predicated on the assurance that the workers’ pensions would be well managed and adequately funded. But in Puerto Rico, as in some other places, that has not been true for decades.
For more, read In Puerto Rico, Teachers' Pension Fund Works Like a Ponzi Scheme.
Tuesday, March 7, 2017
The glass ceiling has long term repercussions for women. Making less during their working lives may mean they have less for retirement. The New York Times ran an article recently, Money Worries for Retired Women. Looking at a report, the article notes that
Across all age groups, women have considerably less income in retirement than men, according to a report from the National Institute on Retirement Security. For women age 65 and older, their income is typically 25 percent lower than that of men. As men and women age, the gap widens to 44 percent by age 80.
As a result, women were 80 percent more likely than men to be impoverished at age 65 and older, while women age 75 to 79 were three times more likely to fall below the poverty level than men the same age.
It's not just earning less that contributes to the problem, according to the article. Taking time off to raise a family contributes to this matter. As well, consider if the woman is a caregiver for an elder and has to take a leave of absence. (We've blogged several times about family caregivers and the impact it has on the caregiver).
Many women take time off to raise children or care for an aging relative, which gives them fewer years to contribute to a retirement plan. Moreover, because employers will often match — up to a set amount — the money an employee sets aside in a workplace retirement account, like a 401(k) or 403(b), those matching dollars are sacrificed.
“Financial problems in retirement and senior debt arise with insufficient income as a result of lower lifetime earnings and less in savings, costs of family caregiving and divorce...”
Don't forget to add increased longevity into the equation and possibility of running out of money in retirement is a real fear. One piece of good news in the story is that women are working longer, which allows them to save more for their retirement. "Working longer makes it possible to add to retirement accounts and to avoid tapping into them for living expenses. It also frequently comes with employer-based health insurance. It can also deliver a substantial financial benefit in Social Security... The extra years of earnings at these ages replace earlier years of low or zero earnings in the retirement benefit computation formula...."
From the Washington Post, an especially moving account written by former White House Communications Director Jennifer Palmieri about her sister, who died at age 58 following some ten years with "early onset" Alzheimer's:
Every day, more Americans receive the devastating news that someone in their family has this affliction. For now, there is not a lot of hope for recovery. It can make you envious of cancer patients; their families get to have hope. Having come through this experience with my sister, I am afraid that I can’t offer these new Alzheimer’s families hope for a recovery. But I do hope that by relaying the story of my sister’s journey, I can offer them some peace.
My sister Dana was brilliant, beautiful, full of positive energy, a force of nature. She was not an easy person. She was driven and successful, and, as the disease progressed unbeknown to all of us, it became harder to connect with her. Ironically, that began to change once she got the diagnosis.
When she called each of us with the news, she already had it all figured out. We were all to understand that, really, she saw the diagnosis as a blessing. It was going to allow her to retire early. It would motivate our family to spend time together we would not have otherwise done. It would shorten her life, but she would make sure the days she had left were of the highest quality.
The thoughtful piece can help all of us as we and our family members tackle challenges. For more, read The Blessings Inside my Sister's Alzheimer's Disease.
Wednesday, March 1, 2017
I've noticed a fair number of articles recently on the topic of planning for retirement, including this recent one from the New York Times. What to Do Now to Retire Better looks at actions you should based on your age group, starting when one is in her 20s. For example, for folks in their 40s the article suggests working with a financial advisor, portfolio rebalancing, establishing a self-employed plan such as a SEP IRA and using a retirement calculator to make sure you are on the right track. The advice for those in their 50s is more extensive, including planning for what happens after retirement, checking out Social Security, reducing debt, investigating downsizing and more.
Since financial literacy is so important, this article would be good to assign to students to get them thinking about their own futures and planning for their retirements.
Monday, February 27, 2017
The Washington Post ran a recent story about saving for retirement. Two-thirds of Americans aren’t using this easy way to save for retirement stress the importance of workers taking advantage of various workplace retirement accounts yet many fail to do so.
Fewer than one-third of Americans are saving money in their 401(k)s and other workplace retirement accounts, according to an analysis of tax records by Census Bureau researchers.
Although nearly 80 percent of Americans work for an employer that offers retirement programs — whether a 401(k), 403(b) or something else — only 32 percent of workers sign up for such accounts, according to a working draft of the study by Michael Gideon and Joshua Mitchell. The researchers studied W-2 tax forms from 2012 from 155 million American workers for their findings, which help shed light on just how ill-prepared many Americans are for the future.
The article discusses the importance of saving for retirement for the various age groups and notes that it's unlikely that those close to retirement have a realistic idea of what it costs to live during retirement.
Older workers ... are increasingly experiencing sticker shock when they realize just how much money they’ll need for retirement, said Manisha Thakor, a financial adviser in Portland, Ore. The most conservative calculations estimate Americans will need to have about eight to 10 times their annual salary saved for retirement, she said.
“By the time people see how much they need, it seems so horrific and out of bounds that they just freeze and do nothing,” she said, adding that she counsels clients to save at least 20 percent of their income toward retirement and other expenses. “They just throw their hands up and say, ‘What’s the point of even trying at this point? I’m so far off.’ ”
At the same time, people are living longer, which means they’ll have to save up that much more to help support themselves in their post-work years. She added, “Layered on top of both generations is the specter of student loan debt, which has now eclipsed credit card debt.”
The student debt referenced in the article is that taken on for their kids or grandkids.
What is the way to get more workers to take advantage of the offered workplace retirement plans? One idea in the article is automatic enrollment. Even though that may be successful, don't forget, "[i]n recent weeks ... Congress has moved to repeal Obama administration measures that allow states to automatically enroll workers ii retirement programs."
NPR had a good recent summary of the politics behind opposition to full implementation of fiduciary duty standards for investment brokers in providing retirement advice:
Over the past two weeks, the Trump administration has taken steps to delay and perhaps scuttle a new rule designed to save American workers billions of dollars they currently pay in excessive fees in their retirement accounts.
The Obama administration spent 5 years crafting the rule through the Labor Department. It requires that financial advisers and brokers act in their customers' best interest when offering them investment advice for their workplace retirement accounts. Firms must comply by April [2917 under the current rule].
As the commentary pointed out, early-on Trump pledged to support the interests of ordinary working Americans and to take on Wall Street:
In his inauguration speech, President Trump talked about giving America back to everyday working Americans. In one of the more memorable moments, the president said, "The forgotten men and women of our country will be forgotten no longer."
The fiduciary duty rule for investment brokers directly signals the tension between President Trump's pledge to working Americans and his career-long focus on big business.
AARP supports the rule, recognizing that the U.S. has an "under savings" problem. Distrust of investment advisers plays into the reluctance of ordinary Americans to engage in professionally-assisted planning for the future. Will AARP rally retirees to resist repeal or delay of the fiduciary duty rule?
For more, read or listen to Trump Moving to Delay Rule that Protects Workers from Bad Financial Advice.Trump Moving To Delay Rule That Protects Workers From Bad Financial Advice and White House to Investors: Put Savers' Interests First.
Warren Buffett has been counseling -- for years -- to avoid high fee "experts" for investment advice, recommending the use of index funds instead. See e.g. Newsday's "Warren Buffett Says Don't Waste Money on Investment Fees."
Wednesday, February 22, 2017
The marketers of reverse mortgages often paint a rosy picture of how seniors will be able to draw on the equity in their homes to cover daily expenses, without risk of repayment before death. But details of these mortgages can be overlooked and as we've reported before, seniors can be surprised when terms and conditions create traps that can lead to foreclosure. However, from Florida, we're now hearing about cases where one of the simplest conditions -- the borrower continuing to live on site -- has become the subject of litigation.
“All of a sudden, we saw a spate of foreclosures where the mortgage companies alleged the seniors no longer lived in the home,” said Gladys Gerson, supervising attorney for Coast to Coast Legal Aid of South Florida’s senior unit. “This has been happening around the state.”
About a dozen similar cases reached Gerson and other attorneys at Coast to Coast, who have helped a growing number of low-income seniors fight and win dismissals despite aggressive lender litigation.
Florida is ground zero for seniors’ issues, but as the strategy has often proved effective, it’s likely to spread, according to defense attorneys. “If you see the volume of national advertising that’s geared to seniors, I can’t believe this is limited to Florida,” Corona’s father and partner, Ricardo, said. “The servicers are not even based in Florida, so I don’t see why they would limit themselves.”
Corona admits he didn’t expect a hard fight when he first reviewed El Hassan’s case, but court records show he was wrong. Over the last 10 months, the ongoing litigation yielded two hearings, 40 docket entries and attempts by both sides to collect attorney fees.
For more, read the full article, Foreclosure Litigation Strategy Takes Aim at Seniors, Attorneys Say.
Thank you to my colleague, Dickinson Law Professor Laurel Terry, for this source.
Thursday, February 16, 2017
20 New Yorkers from all different circumstances and backgrounds who have both exceeded life expectancy and who are disrupting commonly-held expectations of what it means to grow old.
Every few weeks, [the authors] introduce the story of a new person to our readers. You will meet a woman who cares for her 1-year-old great-grandchild, a man who was in prison for 30+ years and is trying to make up for lost time and an optometrist who has retired four times but keeps returning to work.
Isn't it time for a little positive news?
Friday, February 10, 2017
When I first saw the news stories of the French cyclist who had set a cycling record for sixty minutes, I wasn't particularly impressed -- that is, until I realized that Mr. Robert Marchand is now age 105 and he's trying to break his own record of almost 17 miles per hour, set when he was 103. Turns out this is part of a much larger story about fitness in aging. From the New York Times:
At the age of 105, the French amateur cyclist and world-record holder Robert Marchand is more aerobically fit than most 50-year-olds — and appears to be getting even fitter as he ages, according to a revelatory new study of his physiology.
The study, which appeared in December in the Journal of Applied Physiology, may help to rewrite scientific expectations of how our bodies age and what is possible for any of us athletically, no matter how old we are.
For more, read Lessons on Aging Well, From a 105 Year-Old Cyclist. Inspiration for your own weekend workout, perhaps!
Thursday, January 26, 2017
The Young Invincibles recently released a report that looks at the financial health of the Millennials. The Financial Health of Young America "compares the financial health of young Americans in 1989 compared to today’s young adults to reveal major declines across five key factors – income, assets, net wealth, home ownership and retirement savings. In summary, Boomers had higher incomes, owned more homes, and had twice the net assets that Millennials have today."
In addition, the report notes the following key findings:
Millennials have earned a net wealth half that of Boomers at the same age.
Young adult workers today earn $10,000 less than young adults in 1989, a decline of 20 percent.
Education attainment still an individual’s best pathway to financial security.
When Boomers were young adults, they owned twice the amount of assets as young adults.
Disturbing racial inequality persists and grows. Young African Americans’ median wealth declined by a third since 1989.
Student debt blunts some of education’s benefits.
The report makes various recommendations in the following categories: skills, education, income, employment benefits, housing policies, improving the ability to save and gain wealth, and improve portable retirement choices. This is the first of several reports. The full report runs 30 pages and is available here.