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
Many boomers will have to stay employed longer than they’d hoped to close the gap between what they’ll need in retirement and what they can realistically afford. Yet the job market is tough for job-hunting older workers, and if they are employed, wages stagnate or decline when people get into their 50s.
A new report by the AARP Public Policy Institute shows the continuing toll on workers ages 45 and older who have suffered a bout of unemployment since the onset of the Great Recession. Lower pay, fewer hours, or more limited benefits in their new jobs and a prolonged inability to find any job are plaguing these workers. AARP found that only half of those hit by job losses have found work, and the rest either remain unemployed or may have given up and dropped out of the labor force entirely.
AARP’s representative survey of some 2,500 older Americans, conducted late last year, aligns with earlier academic studies looking at the Great Recession’s impact on older workers. The youngest boomers are now 50, so the survey includes some people in Generation X.
The following are AARP’s major findings:
Nearly half of the people surveyed earn less in their new employment than they did before losing their previous job. …
Americans have been labeled everything from the Greatest Generation to Generations X, Y, and Z. Are you ready for the Centenarian Generation?
The number of 100-years-olds has roughly doubled over the past two decades to more than 67,000 – mostly women – and the U.S. Census Bureau predicts it will double again by 2030. Just think about the implication of living for a century: retirement at, say, 65 means 35 years of leisure.
This is unappealing to some, unaffordable to many, and it impacts us all.
“We’ve added these extra years of life so fast that culture hasn’t had a chance to catch up,” Laura Carstensen, director of Stanford University’s Center on Longevity, said during a panel discussion at a recent Milken Institute Global Conference in Los Angeles. The best use for a additional 20 or 30 years of life isn’t, she said, “just to make old age longer.”
Granted, the Milken panelists – all privileged and accomplished baby boomers – are removed from the financial and other challenges facing most older Americans. But they have thought deeply about longevity and its consequences.
The following is a summary of their musings on how we might adjust to the coming cultural tilt toward aging:
Young people need to be more engaged in the issue of increasing U.S. life expectancy, because it will affect Generation Z far more than it has today’s older population. To engage his son’s interest in the topic, Paul Irving, chairman of the Milken Institute’s Center for the Future of Aging, said he introduced the concept of 80-year marriages. “That started a conversation,” he said. …Learn More
Due to differing tax treatments, each $1,000 placed into a traditional, tax-deductible 401(k) costs less today than $1,000 placed into a Roth 401(k), but that Roth will provide more money in retirement.
New research indicates that workers don’t recognize this difference between the two types of employer-sponsored retirement accounts when deciding how much to save.
A $1,000 contribution to a traditional 401(k) costs the worker less than $1,000 in take-home pay, because the income tax hit on the $1,000 will be delayed until the money is withdrawn from the account. But a $1,000 contribution to a Roth 401(k) costs exactly $1,000 in take-home pay, because the worker has to pay income taxes on it up front. The Roth funds, including the investment returns, will not be taxed when they’re withdrawn.
A Roth 401(k) might be thought of as shifting additional money into the future, allowing people to spend and consume more in retirement. (This assumes the same tax rate over a worker’s lifetime.)
The upshot: to get a set amount of after-tax money for retirement, workers could contribute less to a Roth than to a traditional 401(k). But that’s not what they do. …Learn More
The general public is very cool on annuities. But many economists like the idea of retirees using some portion of their savings to buy them.
Annuities, with their fixed monthly payments, may be the best way to ensure retirees’ savings last just as long as they do. Otherwise, they may either spend it too fast and deplete their savings prematurely or spend too conservatively, depriving themselves of necessities in their old age.
New research suggests that one reason retirees don’t buy annuities is because they have great difficulty figuring out what they’re worth. When they try to figure this out, they bump up against their own cognitive limitations – limitations that only worsen with age.
In the study, 2,210 adults over age 18 were asked to estimate the value of a monthly annuity familiar to most workers: Social Security benefits. First, the research subjects were asked if they would pay $20,000 to “buy” a $100 increase in their monthly Social Security benefits. If the person said no, the survey repeated the question with a lower amount, eventually zeroing in on what this additional $100 benefit was worth to them. Next, the research subjects were asked to reduce – or “sell” – their monthly benefits by $100 in return for a specific dollar amount paid to them upfront.
In theory, the buy and sell prices they finally arrived at should be equal. But there was an enormous gap between the two. The median price research subjects were willing to pay was $3,000, and the median price at which they would sell was $13,750. There was also a wide range of sales prices among the individual participants: some would accept $1,500 or less, while others wanted $200,000 or more. …Learn More
A 1983 reform to Social Security is now in full swing for baby boomers: they must wait at least until their 66th birthday to claim their full pension benefits.
But is the gradual increase in the program’s so-called full retirement age – it was 65 for prior generations – having any effect on when boomers retire?
Why people decide to retire when they do is complicated, and economists have tried for years to understand this. Americans are working slightly longer than they did in the mid-1990s, with the average retirement age rising from 62 to 64 for men and from 60 to 62 for women (though this trend may be stalling). Myriad possible explanations for retiring later include the decline of traditional pensions, greater longevity, healthier older workers, and a more educated labor force.
Another reason could be the 1983 reform delaying the age at which baby boomers in this country are allowed to claim their full Social Security pensions, a reason supported by a new study of similar reforms to Switzerland’s government pensions.
The researchers found that a one-year increase in Switzerland’s full retirement age, or FRA, for women is associated with a half-year delay in when women retire and when they claim their full government pensions. …Learn More
The nursing profession is predominantly women, but it’s the male nurses who earn more – $5,148 more per year on average.
“Male RNs out-earned female RNs across settings, specialties, and positions with no narrowing of the pay gap over time,” according to a salary comparison from 1998 through 2013 in the Journal of the American Medical Association. Other research has revealed pay gaps in teaching, another women-dominated profession.
Today is Equal Pay Day, and the media is replete with reminders that American women earn 77 cents for every dollar that men earn. Nursing is the single largest profession in the growing health care sector, and the pay gap affects some 2.5 million women employed in a profession established in 19th century London by Florence Nightingale, who wrote “Notes on Nursing: What It Is, and What It Is Not.”
The importance of a woman’s earnings level goes beyond the obvious implications for her current standard of living. Earnings are also key to how much she can accumulate over a lifetime.
The largest pay disparity is for nurse anesthetists: men earn $17,290 more than their female counterparts. The only category in which women out-earn – by $1,732 – is university professors in the nursing field. The researchers isolate the role a nurse’s sex plays by controlling for demographic characteristics such as education level, work experience and other factors that also influence how much someone earns. Only about half of the gap between men and women was explained by these identifiable factors, leaving half unexplained.
The chart below shows pay gaps, by type of nurse specialty.