False teeth

Get Dental Work Before You Retire

Caps, gum surgeries, implants, dental exotica – all kinds of things can and do go wrong in retirees’ mouths.

But dental coverage also drops sharply for older Americans, because when people retire, they give up their employer’s dental insurance. Without it, retirees needing dental work can face an unexpected, mini financial crisis.

Medicare does not cover routine dental procedures, a fact that a majority of working baby boomers are unaware of. But most seniors also aren’t covered through a spouse or under, say, a union dental insurance plan for retirees. The private dental insurance market is their only option for care, and very few purchase it.

Uninsured older Americans shell out $1,126 annually, on average, for dental work, which is $400 more than people with coverage spend. Out-of-pocket costs can be much higher in a year when extensive work is required. …Learn More

Long-term Care on a Boxed-wine Budget

The dangers of isolation in old age, the quest for a nice nursing home on “a boxed-wine wallet” – Annabelle Gurwitch approaches these issues with humor in a PBS NewsHour video that touches on themes previously covered in this blog.

When Gurwitch and her sister started grappling with finding a new home for their parents, one that would provide care for them, the sisters faced some tough decisions – and their parents had to make difficult compromises.

But when their father became very ill, something wonderful happened in their parents’ new community. …Learn More

Tax documents

Retirement, Saving and Your Taxes

Just one in four of the low-income workers eligible for the federal tax credit for retirement saving are even aware that it exists.

The IRS, as I said in a previous blog, practically “gives money away” through its Saver’s Tax Credit, which returns as much as half of the amount saved to the tax filer. The credit was designed to encourage the nation’s lowest-paid workers, who largely don’t save.

Yet a survey last year by the Transamerica Center for Retirement Studies found that people who are not eligible for the credit know more about it than people who are eligible. There was a pervasive lack of awareness in three groups in particular: workers earning under $50,000, women, and people with no more than a high school education.

We’re getting into the thick of the tax season, so we’ve assembled a list of our previous tax-oriented blogs – the first article explains the saver’s credit. The blogs, listed below, explore a variety of issues to consider when you’re doing your taxes: …Learn More

Dark tunnel

In the Dark about Retirement?

There’s new evidence to remind us that nothing much changes: we are still baffled by our DIY retirement system.

And no wonder!

First, saving must start at a young age, when retirement is an abstraction. Saving is further stymied by two big questions: how much to save and how to invest it?  It’s also smart to anticipate how one’s compensation arc might affect Social Security – taking into account, for example, that women withdraw temporarily from the labor force to have children and that earnings can decline when workers hit their 50s.  As we fly past middle age and retirement appears on the horizon, it’s a little late to figure this retirement thing out.  And there’s no plan for long-term care when we’re very old.

The evidence: Start with Merrill Lynch’s new survey in which 81 percent of Americans do not know how much money they’ll need in retirement.  This makes it very difficult to know how much to deduct from one’s paycheck for retirement savings. Employers, frankly, could do more to help us figure this out. (Some answers appear at the end of this blog.)

Being in the dark now about how much to save is a cousin of being afraid of running out of money later, in retirement. More than 70 percent of accountants say this fear of running out is their clients’ top concern – followed by whether they can maintain their current lifestyle and afford medical care in retirement – according to the American Institute of Certified Public Accountants.

Our inclination to avoid difficult issues does not go away with age.  Yes, we’ve gotten wiser, but advanced old age means death, and who wants to think about that?

The upshot: seven in 10 adults have not planned for their own long-term care needs in the future, Northwestern Mutual reports.  Even among a smaller group who anticipate having to take care of an elderly parent, one in three of them “have taken no steps to plan” for their own care.

“You would think that would prompt them to action,” said Kamilah Williams-Kemp, Northwestern’s vice president of long-term care. And while the constant barrage of news and statistics is making Americans more aware of their rising longevity, Williams-Kemp said, caregivers are often more interested in talking about their emotional and physical challenges and the rewards of caregiving than about its substantial financial toll.

There is a “disconnect between general awareness and prompting people to take action,” she said.

The potential for dementia or diminished capacity late in life isn’t on our radar either, the survey of CPAs found: the vast majority of people either choose to ignore the issue, wait and react to it, or are confused.

Squared Away exists in part to educate people about retirement essentials, based on facts and high-quality research. The following blogs might help you:

How Much for the 401(k)? Depends. …Learn More

emergency

Some Insured Workers Delay Healthcare

Stark differences are emerging in the ways that workers, depending on how much they earn, are using the medical services covered by their employer health plans.

While higher-income workers gravitate toward preventive and maintenance care, lower-wage workers visit emergency rooms far more often, according to a study published last month in Health Affairs.  The researchers pointed to one major culprit: a 67 percent increase in average deductibles for employer health plans since 2010.

Employers usually offer the same health plans to all their employees. But the growing prevalence of high-deductible plans could be making making some low-wage workers think twice before seeing a doctor if they’ll have to pay the entire bill because they haven’t hit their yearly deductibles yet. Health insurance premiums and other out-of-pocket medical costs in high-deductible plans together consumed about 21 percent of pretax earnings for the low-wage workers studied.

Many of these workers, apparently trying to contain their out-of-pocket costs, might “avoid or delay health care services, despite having coverage,” said the researchers.

They analyzed four employers that covered some 43,000 workers through a common private health insurance exchange in 2014.  The researchers adjusted the data so they could compare the employees, controlling for, among other things, health insurance plan design, deductible levels, employee characteristics, and the size of their households.

An analysis of insurance claims data found that lower-paid workers were more likely to see a doctor after medical problems develop, while higher-paid workers were more diligent about preventing problems.

For example, workers in the top two wage categories ($44,000-$70,000 and over $70,001) received preventive care during visits to the doctor’s office far more often than workers earning under $30,000.  Screenings for breast, cervical and colon cancer were also more frequent among high-paid employees, who also adhered more closely to the drug regimens prescribed by their doctors.

Not surprisingly, hospital admission rates for lower-wage workers were nearly double the rates of the highest-paid workers – and four times higher for avoidable medical problems that landed them in the hospital. Low-paid workers visited emergency rooms about three times more often.

There are many potential reasons for these differences, including low-paid workers’ generally lower education levels and less access to paid time off from work to see a doctor. But the researchers said financial constraints certainly played a role: …Learn More

A Bigger Bite Out of Social Security

Social Security chartMost retirees didn’t notice the $5 cost-of-living increase in the average Social Security check. That’s because the Part B Medicare premium deducted from their checks went up nearly as much (from $104.90 in 2016 to an average $109 this year).

Beyond premium hikes, the bigger issue for retirees are the additional out-of-pocket costs they must pay as part of their Part B coverage for doctor visits and outpatient care. When rapidly rising copayments are added to the basic premium, they together consumed more than 15 percent of the average Social Security benefit last year. That is more than double the percentage in 1980, and it’s expected to exceed 17 percent by 2030, according to the Centers for Medicare and Medicaid (CMS).

The CMS estimates were made prior to the announcements of 2017’s final COLA and Part B increases. But the trend of eroding benefits was confirmed by Juliette Cubanski, associate director of Medicare policy for the Henry J. Kaiser Family Foundation. …Learn More

Rights of Low-income Medicare Users

A 2014 report from the Consumer Financial Protection Bureau (CFPB) said that the largest category of financial complaints by seniors was debt collection, with nearly half of their complaints involving “continued attempts to collect debt not owed.”

texas-medicaid-CardThe CFPB just followed up with a missive directed at some 7 million older Americans enrolled in the Qualified Medicare Beneficiary Program (QMB). People who qualify for this Medicare designation receive such small Social Security checks – less than $1,010 per month for individuals and $1,355 for couples – that doctors, hospitals and other medical providers are barred from billing them directly for services rendered. The CFPB said that it, as well as the Centers for Medicare & Medicaid Services, continue to hear from QMB participants who report they are receiving unjustified medical bills.

Here’s how the CFPB suggests that QMBs or family members deal with improper medical billing:

  • Prevent the problem by repeatedly reminding your doctor or medical service provider that you are a Qualified Medicare Beneficiary. QMB cards aren’t required federally but the District of Columbia and at least one state, Texas, provide members with a card to prove it.
  • If you are billed, tell the medical provider or debt collector they are barred from charging you for Medicare deductibles, coinsurance and copayments, because you are enrolled in QMB.
  • You have a right to a refund for a bill paid in error.
  • If the medical provider will not stop billing you or refuses to issue a refund, call 1-800-Medicare (1-800-633-4227).
  • Submit online complaints about debt collection practices by clicking here. …

Learn More