September 7, 2017
Why Many Retirees Choose Medigap
The Medicare open enrollment period starting Oct. 15 applies only to two specific insurance plans: Part D prescription drug coverage and Medicare Advantage plans.
But before choosing among various plans sold in the insurance market, the first – and bigger – decision facing people just turning 65 is whether to hitch their wagons to Medicare-plus-Medigap or Medicare Advantage. Squared Away spoke with insurance broker Garrett Ball, owner of Secure Medicare Solutions in North Carolina, who sells both. Most of his clients buy Medigap, and he explains why.
In a second blog post, we’ll interview a broker who deals mainly in Advantage plans. Another source of information about Medigap and Advantage plans are the State Health Insurance Assistance Programs.
Q: Let’s start with explaining to readers what your company does.
We’re an independent Medicare insurance broker that works with some 2,000 clients on Medicare annually who are shopping for supplemental plans. My company began in 2007, then in 2015 I launched a website tailored to people just turning 65 to answer the questions I get every day. We’re not contractually obligated to just one insurance company. When we work with someone, we survey the marketplace where they live, assess their needs, and help them pick a plan. We get paid by the insurance companies when someone signs up for a plan. Different states have different commission levels, and there is more variation state-by-state than company-by-company. Insurers typically pay fees of $200-300 per person per year.
Q: What share of your clients buy Medigap policies, rather than Medicare Advantage plans?
Approximately 10 percent of my clients end up with Medicare Advantage vs 90 percent with Medigap. Some states have a higher percentage in Medicare Advantage. I do business in 42 states, so this depends on the insurance markets in individual states.
Q: Why do you sell more Medigap plans? …Learn More
September 5, 2017
Senior Hunger in Decline but Still High
Saturday morning at a Boston-area farmers market.
While hunger has eased among older Americans, millions still worry about having enough to eat from day to day.
A new report by two non-profits – Feeding America and the National Foundation to End Senior Hunger – found that food insecurity among people 60 and older declined by a meaningful amount between 2014 and 2015, the latest year of data available. This marked the first decline since the Great Recession.
Nevertheless, the percentage of the older population fitting the various definitions of being food insecure used in the report is much higher than in 2001. In 2015, 15 percent of older Americans felt threatened by hunger – the broadest definition – compared with 11 percent in 2001. And hunger is not isolated to the poor, said James P. Ziliak, founding director of the Center for Poverty at the University of Kentucky and co-author of the new report.
A big reason for rising food insecurity among seniors is that only 40 percent of those with low incomes who are eligible for federal food stamp assistance are actually enrolled in the Supplemental Nutrition Assistance Program, or SNAP, he said. This compares with 80 percent of the eligible population as a whole enrolled in SNAP. …Learn More
August 24, 2017
Outsized Caregiving Duties for the Few
The value of the informal care provided to the nation’s elderly, often by adult children, exceeds $500 billion a year – more than double the price tag for the formal care of nursing homes and home health aides.
Only 6 percent of Americans are, at any given time, regularly helping parents who have deteriorating health or disabilities to perform their routine daily activities (and 17 percent will provide this care sometime during their lifetime). But a sliver of the population shoulders an inordinate amount of responsibility.
A study by Gal Wettstein and Alice Zulkarnain of the Center for Retirement Research finds that the
6 percent of adults providing parental care devote an average 77 hours to their duties each month, or roughly the equivalent of a full-time job for two weeks.
And the burden grows as adult offspring get older. They found that 12 percent of 70-year-olds are caring for parents and spend, on average, 95 hours per month doing so, even though they’ve reached an age when they might be developing health issues of their own. This remarkable situation is no doubt a result of both rising life expectancies for the elderly parents and improving health among their offspring, who are also aging but are nevertheless still able to provide care.
The study was based on data from a survey of older Americans that used the standard definition of care, which includes helping seniors with activities of daily living (known as ADLs), such as bathing, eating, and walking across a room, and includes instrumental activities of daily living (IADLs), such as taking medications, cooking, and managing finances.
For the half of seniors over 85 who require this assistance, informal family care is their first choice. Not surprisingly, nearly two-thirds of this care is done by spouses and daughters, especially unmarried daughters. But there are costs, in terms of money and work, as well as time. Caregivers report that they spend more than one-third of their budgets on parental care. …Learn More
August 15, 2017
Women Spending Fewer Years in Marriage
It took months for one girlfriend’s suitor to persuade her to get married. Another of my friends skipped marriage entirely and had two children on her own. Others married, had kids, and divorced, a status that seems unlikely to change for some as they age. I married for the first time at 56.
These anecdotes, about a random group of baby boomer women in the Boston area, illustrate some of the ways that women over the past half century have dramatically reduced the time they spend as part of a married couple.
A new study being released today by the Center for Retirement Research at Boston College finds that “middle boomer” women born in the late 1950s can expect to spend no more than half of their adult lives (starting at age 20) in marriage. That share was closer to three-fourths for the mothers of baby boomers.
The researchers measured this dramatic change and its underlying causes – namely delayed wedlock, permanent singlehood, and divorce – across four cohorts of women who participated in a survey of older Americans.
Between the oldest group (born in 1931-41) and the youngest group (born in 1954-59), the average age of first marriage has increased by nearly three years, while the share of women who have never married tripled to 12 percent. The share who’ve divorced also rose, from one-third to one half, according to the center, which sponsors this blog.
The change has been even starker for black women: the share of their adult lives spent in marriage declined from 54 percent of the oldest group to just 32 percent of middle boomers. Divorce is a contributing factor, but the primary reason is that black women are much more likely to fall into the “not married” category than in the past. In fact, the not married group is now larger than the married group.
This trend has many implications, not the least of which are financial. …
July 20, 2017
Retrofitting Your Home for Old Age
Brickhouse Design Group Ltd.
Big advances in the construction industry are helping the elderly better maneuver around their homes, and they’re doing it in style.
Ramps no longer look like ramps; they are pleasantly lit walkways with stone paving. Compact pneumatic elevators squeeze into tight spaces. The lip at the entrance to the shower – the one an elderly person can trip over or that blocks a wheelchair – has cleverly been eliminated. Watch this recent webinar to find out how.
And here’s an interesting idea: a reverse mortgage is one way to pay for the upgrades required for seniors who want to remain in their homes as they age.
That is the punch line in the webinar, which is sponsored (not surprisingly) by the National Reverse Mortgage Lenders Association (NRMLA). NRMLA confirms that some loan originators report that the proceeds from federally insured reverse mortgages are being used for the purpose, though this is not widespread – yet.
Many are, however, considering it: one in four older households in a 2014-2015 academic survey reported, after they had received reverse mortgage counseling, that they planned to use their funds to pay for home improvements.
This webinar isn’t exactly exciting. But it will interest baby boomers who are either caring for elderly parents or thinking about their own old age. One poll found that 87 percent of older Americans would not want to move into a nursing home. But if they want to age in their homes, there’s apparently a lot of work to be done.
“The bulk of long-term care will occur in single-family, owner-occupied homes,” predicted one webinar presenter, citing a study. “But the homes aren’t prepared.” …Learn More
July 11, 2017
Retirement Calculators: 3 Good Options
The Internet offers many free calculators to baby boomers wanting to get a better handle on whether their retirement finances are on track.
The operative words here are “on track,” because each calculator has strengths and weaknesses. Calculators aren’t capable of providing a bullet-proof analysis of the complex factors and future unknowns that will determine whether someone has done the planning and saving required to ensure a financially secure retirement.
With that caveat, Squared Away found three calculators, listed below, that do a good job. They met our criteria of being reliable, free, and easy to use. Many other calculators were quickly eliminated, because they were indecipherable or created issues on the first try.
Most important, each calculator selected covered the assumptions crucial to an accurate analysis. All ask such obvious questions as how much an older worker and spouse (or single person) have saved, their portfolio’s returns, and estimates of their Social Security and pension income. The first calculator below asks how much money the user wants to leave to his children, and all three include the user’s home equity, a major resource that most retirees are loath to tap but are under increasing financial pressure to consider. Also, the first two ask more detailed questions – and are more time-consuming – than the third, which is the best option if you want just a rough estimate of where you stand.
Finally, this blog’s writer tested each calculator and compared the results with her personal adviser’s customized analysis. Each time, the outcomes were in the same ballpark as the adviser’s. A fourth good option is to use the calculator provided by the financial company managing your employer’s 401(k) – most of the major providers offer them. …Learn More
July 4, 2017
Celebrate the 4th!
Many of you are enjoying a long weekend or taking the entire week off. Enjoy your vacations and drive safely.
As the summer kicks into high gear, we’ll continue blogging twice a week about retirement and related personal financial issues.Learn More