Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.
The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.
The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.
Mistakes made during initial Medicare enrollment can be costly.
Someone with on-the-job health care coverage who enrolls at age 65 may be paying Medicare premiums unnecessarily. Even worse, retirees who sign up too late incur a penalty for life.
“If you’re actively working, that’s the only reason you can enroll late in Medicare” without paying the penalty, Medicare trainer Andy Tartella says in the above video, “The ABCD’s of Medicare,” produced by the Centers for Medicare and Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services.
Medicare has been around for exactly 50 years. But enrolling in the program is a new experience for every single American who turns 65. To navigate Medicare enrollment and the alphabet soup of Medicare programs, the following are other video tutorials produced by the federal government and other reliable sources – links are embedded at the end of the title: …Learn More
Years of confinement to a nursing home is everyone’s worst fear for old age.
With a semi-private room now costing about $81,000 annually, the prospect of a lengthy stay is also a popular reason for buying a long-term care insurance policy to cover it.
Undercutting this rationale is a new study led by senior economist Anthony Webb of the Center for Retirement Research, which sponsors this blog. He finds that U.S. nursing home stays are relatively short: 11 months for the typical single man and 17 months for a single woman. There’s some unpleasant news in the study, too, because the risk that an older person may one day need nursing home care is 44 percent for men and 58 percent for women.
The significance is that nursing home stays are higher-probability, lower-cost events than previously thought, which reduces the appeal of purchasing long-term care insurance. This finding helps to explain why so few older Americans – 13 percent – buy the coverage to protect their financial assets from potentially being drained by nursing home bills. …Learn More
Ken Sullivan and Michelle Palomera with their daughters Leah (left) and Abby.
Ken Sullivan’s diagnosis of Alzheimer’s disease at age 47 unleashed a torrent of feelings: shock, isolation, fear. It’s probably why he lost his demanding job at a large financial company.
The diagnosis was also emotionally devastating for his wife, Michelle Palomera.
But for both of them, it was a rude awakening to the myriad financial preparations required for Alzheimer’s. Even though both are financial professionals, they had no idea how complex it would be to revise their existing financial plan, how hard it would be to find professionals with the specific legal and financial expertise to help them, or how long this project would take – 17 months and counting.
“This disease has so many layers and aspects to it,” Palomera said.
The risk to an older individual of getting Alzheimer’s is only 10 percent – and early-onset like Sullivan’s is even rarer. But when there is a diagnosis, one issue is the lack of a centralized system for managing care and coordinating the myriad professionals and organizations involved. These range from the medical people who diagnose and treat an Alzheimer’s victim to health insurers, attorneys, social workers, disability and long-term care providers, and the real estate agent who may be needed if a victim or the family decides they can’t remain in their home.
Sullivan and Palomera had always shared their family’s financial duties. But Sullivan’s new struggles with details and spreadsheets left these tasks entirely on Palomera’s shoulders – all while juggling her job as a managing director for a financial company. “If something were to happen to me, I have to be really air tight on having everything squared away so the trustee – someone – can manage the situation for our daughters and Ken,” she said.
After Sullivan’s June 8, 2013 diagnosis, the couple called family to gently break the news. Their next calls were to a disability attorney and a financial planner. They’ve since gone through four estate attorneys to find one who could answer their questions and suggest the best options for themselves and daughters Leah, 9, and Abby, 11.Learn More
The differences in Americans’ longevity, depending on one’s income level, are striking.
The annual death rates for 50- to 74-year-old men and women with the lowest earnings are more than double what they are for high earners.
This gap in life spans, which is well-documented in the research literature, has been growing with each new generation. A recent study digs deeper to uncover specific ailments, such as heart disease, that may be driving the growing disparity.
Brookings Institution researchers Barry Bosworth, Gary Burtless, and Kan Zhang used data from a nationally representative sample of almost 32,000 older Americans that included the causes of individual deaths occurring between 1992 and 2010. The survey contains detailed information about the cause and timing of the deaths, as well as interviews with family of the survey participants after they die.
The researchers compared the mortality rates linked to specific diseases for high- and low income people, defined as those whose earnings in their prime working years fell either above or below the median, or middle, income. They found that the risk of dying from the nation’s leading causes of death – cancer and heart conditions – has declined significantly for high-income Americans, both men and women. No such improvements were evident, however, for low-income men and women. …Learn More
In last Tuesday’s election, voters in Massachusetts and three cities – Oakland, California, and Montclair and Trenton, New Jersey – approved paid sick time initiatives that benefit working mothers in particular.
These election results come on the heels of a slew of similar initiatives approved in the past year covering all or certain groups of workers in California and in San Diego, Washington, DC; Eugene, Oregon; several New Jersey municipalities; and the Tacoma suburb of SeaTac, according to an inventory of sick time laws compiled by the advocacy group, A Better Balance.
Mandated paid sick time for employees is growing in popularity but is still unavailable to significant numbers of working mothers, who, the data show, are more often responsible for children’s health than fathers. This issue is one more thing that – like lower pay – can disadvantage single women struggling to secure their personal finances today or save for retirement in the future, especially low-income women.
Research by Usha Ranji, associate director of women’s health policy for the health care non-profit organization, the Kaiser Family Foundation, found that 39 percent of working moms are forced to miss work when a child is sick, because they don’t have back-up child care; of them, 60 percent do not get paid for that time – a decade ago, fewer than half of this group were in this position. …Learn More
Failing to meet one of Medicare’s many enrollment deadlines can be costly to new or imminent 65 year olds.
The Journal of Financial Planning helps aging baby boomers start out on the right foot with a clear run-down of at least five different enrollment windows for various parts of Medicare.
Getting these dates right is “very tricky,” and people often make mistakes that lead to higher out-of-pocket medical costs and gaps in their coverage, said Katy Votava, president of the consulting firm, Goodcare.com, and author of “Making the Most of Medicare: A Guide for Baby Boomers.”
“They often receive well-meaning but mistaken advice, and then they’re really in a pickle,” she said. “They aren’t eligible to apply when they want to or face penalties down the road. Coverage gaps can be a tremendous financial burden.”
The image displayed was extracted from the Journal’s enrollment timeline, and the entire graphic and a Journal article by Votava can be viewed here. The graphic is worth 1,000 words but here are some important don’t-miss dates: …Learn More