Posts Tagged "aging"

Parents’ Education Key to Child’s Security

“Seven Up,” a famous British documentary series, interviewed 7-year-old schoolchildren in 1964 and filmed them every seven years after that.

Over the documentary’s 49-year span, viewers watched the children’s lives take shape. A boy at an upper-crust boarding school goes to college and on to teach math at a prestigious private school. A girl educated in a working-class school in London’s East End is just able to make ends meet as an adult. A young equestrian from a wealthy family raises her own privileged children. A boy in an orphanage becomes a bricklayer.

These personal profiles at the heart of “Seven Up” reverberate in a recent, unrelated, academic study that has reached a similar conclusion: parents’ investment in educating their children is the ticket to financial security as an adult.

The researchers estimated that people with the college-educated fathers earned nearly $400,000 more over their lifetimes (at today’s pound-dollar exchange rate) than the people from less-educated families. They analyzed periodic surveys of 9,436 people in England, Scotland, and Wales between ages 7 and 55. …Learn More

Boston or Florida?

Retire in Boston or in Naples, Florida?

My husband is newly retired, and we’ve spent hours talking about where we might want to live after I retire in a few years. Our imagined scenarios are always changing.

But I’m clear on one thing: I do not want to buy a house in Naples, Florida, where a couple we know did recently. No offense to Naples, which has lots to recommend it – no shoveling! But the typical resident is 65 years old. In fact, Naples is older than the state of Florida, where retirement communities are so pervasive that they distinguish between the “young-old” (ages 60-75) and the “old-old” (over 75).

Boston, where my husband and I live now, couldn’t be more different. It is swarming with college students and young people, including his two sons and daughter-in-law. Boston’s young people work in rapidly changing industries like high-tech or environmental engineering, and I like it that way. Boston’s median age is 32 – half of Naples.

As I get closer to retiring and am faced with change, I think to myself, “Who wants to live in the midst of a bunch of old people like me?”

But that’s precisely what many retirees do. There are many examples of cities that have moved dramatically in the direction of one or the other extremes – Boston or Naples; Madison, Wisconsin, or Scottsdale, Arizona. The Wall Street Journal reported that new retirement communities are popping up in places that weren’t traditional resting places for snowbirds: retired baby boomers’ net migration to the Appalachian region where Georgia, North Carolina, and Tennessee converge has quadrupled since 2011.

This age segregation is a relatively new area of interest to demographers. Almost 60 percent of the neighborhoods and other subdivisions within U.S. counties have moderate or high levels of segregation, which is similar in degree to the level of segregation between the U.S. Hispanic and white populations, Richelle Winkler found in a 2013 study of federal Census data.

Age segregation also occurs in rural areas, as younger people leave for jobs and older people move in. In some rural parts of the Great Plains, Winkler writes, there are two times more seniors than young adults. …Learn More

The Marshmallow Test for Retirement

Walter Mischel, who used marshmallows to test children’s ability to delay gratification, died recently, but his lesson never grows old.

For those who aren’t familiar with his famous test, a young girl or boy sits at a table with a single marshmallow on a plate. The tester tells the child that he or she can eat the marshmallow right away, but waiting to eat it until the tester comes back into the room will bring a big payoff: a second sweet, puffy morsel.

Watching the children in this video squirm as they wrestle with their decisions brings to mind the adult equivalent. A desire for immediate self-gratification can come at the detriment of any number of personal financial decisions.

Like the marshmallow test, consuming now means having less money in the bank later.  The test also applies to deciding when to retire. Retiring becomes extremely tempting for baby boomers who want to escape from work after decades in the labor force.  But those who wait patiently for a few more years will have a sweeter retirement: a much larger Social Security check and more 401(k) savings distributed over fewer total years in retirement.

Children, when faced with the marshmallow test, struggle mightily to exercise self-control. They pick up the marshmallow to examine it, play with it, nibble it, and move it out of reach – but impulse gets the better of them, and they pop it into their mouths.

The lesson here is the same for children and adults: resist temptation and be rewarded. …Learn More

maze

Switching Medigap Plans is Tricky

Thomas Uttormark

When Thomas Uttormark turned 65 in 2010, he researched his Medigap options on the Medicare.gov website and chose a plan with a premium of around $100 a month.

As his premium inched up over the next two years, he decided to apply to another insurance company to see if he could reduce the cost of his policy. Since the federal government dictates the coverage amounts under each of the 10 Medigap plans, he reasoned, his existing insurer’s Plan N provided exactly the same coverage as any other insurer’s Plan N – and the new plan might be cheaper.

“I thought it was no big deal to switch,” said the 73-year-old Uttormark.

However, switching did prove to be a big deal. His application was denied. He suspects it was due to his pre-existing conditions, which included a routine gallbladder surgery before he retired, and his cholesterol, blood pressure and acid reflux conditions, which are fully controlled with medications. The insurer didn’t give him a reason for the denial.

Uttormark ran headlong into a maze of federal regulations that determine whether, when, and how a retiree can transfer from one insurer’s Medigap plan to another insurer’s Medigap. One in four people enrolled in traditional Medicare have Medigap supplemental insurance – about 10 million retirees – and are affected by these restrictive regulations.

They are “particularly confusing,” said Casey Schwarz, the senior counsel for education and federal policy for the Medicare Rights Center in New York and Washington.

She said that people who’ve just signed up for Medicare Parts A and B routinely call her organization because they are having trouble sorting out their options and what they will be permitted to do in the future if they choose either Medigap, which is supplemental coverage for traditional Medicare, or Medicare Advantage private insurance after initially signing up for Medicare Parts A and B.

A handful of states have looser regulations than the federal rules – California, Connecticut, Maine, Massachusetts, Missouri, New York, and Oregon – and allow retirees to move more freely among various Medigap plans, though the states also have their own restrictions.

Schwarz explained that the insurance company denied coverage to Uttormark because he did not qualify for what the federal government calls “guaranteed issue.”

Under guaranteed issue, there is only one time when every Medicare beneficiaries is assured access to a Medigap policy: when they first sign up for Medicare Part B. At this time, insurers can neither deny coverage based on a pre-existing condition nor charge a higher premium if an applicant has a specific health condition.

Another guaranteed issue period applies to limited numbers of retirees. It gives retirees the right to buy a Medigap policy – even people with pre-existing conditions – if they lose their previous coverage through no fault of their own. Perhaps their current Medigap or Medicare Advantage insurer went bankrupt or left the state, or their employer ended its Medicare supplement for retirees. When this occurs, however, the retiree must select a new policy within 63 days of losing their old coverage.

Uttormark didn’t qualify for guaranteed issue because he was choosing to drop his Medigap policy for a less expensive one. Insurers can rightly “refuse to sell him a policy, can charge him more for pre-existing conditions, or refuse to cover his pre-existing conditions,” Schwarz said.

The federal rules also provide an opportunity to switch plans if retirees selected Medicare Advantage as their first form of insurance when they enrolled in Medicare. In this case, they are permitted to move into any Medigap policy sold in their area but they, too, have a restriction: they must do so within the first year of their initial Medicare enrollment.

“Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life,” the Kaiser Family Foundation said in a recent policy brief detailing the federal and state regulations.

The Medicare.gov website describes the circumstances in which beneficiaries qualify for federal guaranteed issue. …Learn More

Granny Pods: Financial and Care Solution

JoAnn George in front of her granny pod

JoAnn George

 
Kathy Barker already was having concerns that her elderly father’s dementia made it increasingly difficult for him to manage his life. When his doctor said he could no longer drive, Barker had to do something.

A contractor was hired to build a 448-square-foot cottage in the backyard of her Tampa home. Her father enjoyed it for just 10 days before going into the hospital, where he died. But the house was still a great solution – this time for her mother, JoAnn George. (Her parents divorced long ago.)

Last November, George was moved into the backyard “granny pod,” which has a front porch, living room, bedroom, bathroom, and small refrigerator – but no other appliances. Granny pods, which come in a variety of architectural styles, from Victorian to modern, aren’t cheap. George’s cottage cost $90,000 to build, putting it in the higher end of the price range for these dwellings, according to Home Care Suites, which built it. [Here’s the virtual tour of the house.]

The 88-year-old George had been living in nearby Plant City, Florida, close to another daughter. But as she slowly declined, Barker decided that moving her into the backyard made sense. A flood in her mother’s home, caused by a broken pipe, provided a convenient opportunity to take matters into her own hands.

Now Barker, who runs a web development business with her husband out of their home, can keep a close eye on her mother. Although George is developing cognitive issues, she still takes care of herself, is healthy, and takes no medications.

The beauty of separate living quarters, Barker said, is that her mother can “keep [her] own independence.” …
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Brick wall with one small and one large door

Medigap Premiums Differ by Thousands

  • A 65-year-old woman in Houston can pay $5,300 a year for Medigap’s Plan C policy or she can buy a policy with exactly the same coverage from another insurance company for $1,700 a year.
  • A 65-year-old Hartford, Connecticut, man can spend anywhere from $2,900 to $7,400 annually for the most popular and comprehensive Medigap policy – Plan F.
  • The price disparity for Plan A for a 75-year-old man in Manchester, New Hampshire, is also large: anywhere from $1,820 to $6,301.

These are fairly typical of the enormous differences in the premiums that consumers across the country are paying for their Medigap policies.

The price disparities are “extraordinary and unable to be justified purely by the coverage that they’re offering,” said Gavin Magor, director of ratings for Weiss Ratings Inc., a consumer-oriented company that assesses insurance companies’ financial stability.

A nationwide analysis by Weiss shows that the premiums vary widely within each group of plans – Medigap Plans A, B, C through N – despite the fact that the coverage in each group is dictated by the federal government and does not change from one insurer to the next. Every company selling a Plan F policy, for example, must offer exactly the same coverage. (The exceptions are Massachusetts, Wisconsin, and Minnesota, where the states regulate their Medigap plans.)

If two people are buying a Chevrolet Camaro in Houston, “you would not expect one person to pay two or three times more than the other one,” Magor said.

Medigap is an added layer of insurance to supplement Medicare for people over 65. The additional coverage helps them with the copayments, deductibles, skilled nursing, and other charges that Medicare does not pay for.

Weiss supplied the data for this article by comparing Medigap premiums sold in each zip code and separately for men and women and for different age groups. The company based the analysis on premiums at more than 170 insurance companies.

There are a few viable explanations for the disparity in premiums. Urban and rural zip codes in the same state may be priced differently, in part because medical costs tend to be higher in the cities. And some insurers might be able to offer lower premiums, either because they are more efficient or are trying to be more price competitive to gain market share.

But Magor said that none of these explanations can fully account for the enormous price differences within zip codes. Many insurers are overcharging for their Medigap policies, he said.

A spokeswoman for America’s Health Insurance Plans, which represents health insurers, said she could not comment on Weiss’ information without the organization doing its own analysis of the data.

Paying too much for a Medigap plan can have a material impact on a retiree’s life. …
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Maybe You Can Slow Cognitive Decline

After decades of study devoted to describing the negative effects of dementia, a new generation of researchers is pursuing a more encouraging line of inquiry: finding ways that seniors can slow the inevitable decline.

One vein of this research, still in its infancy, considers whether seniors could reduce the risk of dementia if they engage in volunteer work. Several studies focus on volunteering, because most of the population with the greatest risk of dementia – people over age 65 – is no longer working.

There’s no suggestion that volunteering can prevent dementia. However, one new study, by Swedish and European researchers, found that Swedes between 65 and 69 who volunteer had a “significant decrease in cognitive complaints,” compared with the non-volunteers. The seniors answered a survey questionnaire at the beginning and end of the 5-year study that gauged whether they had experienced any changes in each of four complaints: “problems concentrating,” “difficulty making decisions,” “difficulty remembering,” and “difficulty thinking clearly.”

The study didn’t go so far as to claim that volunteering actually caused the improvements either. But it highlighted how volunteering might reduce the symptoms, possibly because it keeps older people more physically and mentally fit.

Ruth Bader Ginsburg's headshot

Collection of the Supreme Court of the United States

Indeed, the cognitive benefits of exercise have been understood for so long that they’ve become a perennial topic in the mainstream media. Supreme Court Justice Ruth Bader Ginsburg, 85, has become the poster child for elderly exercisers, with a personal trainer overseeing her push-ups and turns on an elliptical machine in a CNN Films documentary, “RBG.”

The research confirms that she’s doing what she needs to do to stay sharp for her beloved job: aerobic exercise in particular protects seniors’ brain matter from deterioration; weight training and stretching exercises do not.

A research team’s 2014 review of 73 prior studies on volunteer work found multiple benefits: “volunteering in later life is associated with significant psychosocial, physical, cognitive, and functional benefits for healthy older adults.” The paper, which appeared in the Psychological Bulletin of the American Psychological Association, defined psychosocial well-being as having greater life satisfaction, higher executive function, being happier and having a robust social network. …Learn More