November 5, 2015
Meaningful Work Improves Health
Older workers with jobs that give them a high degree of control and influence or a sense of achievement and independence tend to be healthier, new research finds.
The specific benefits of these “psychosocial” aspects of work include lower blood pressure, musculoskeletal agility, better cognitive functioning and improved mental health. They’re equivalent to the health benefits associated with vigorous exercise three times a week, the study found.
Researchers long ago established a strong connection between poor health and jobs requiring strenuous physical activity in harsh conditions. This new study looks at a wide array of psychosocial job characteristics increasingly relevant in the New Economy, as well as revisiting the grueling physical characteristics prevalent in the manufacturing-driven economy of the past.
Lauren Schmitz, a postdoctoral fellow at the University of Michigan, tracked 50- to 64-year-old men working full-time over an 18-year period. The researcher used the Occupational Information Network, which gauges some 970 occupations, to identify the current physical and cognitive demands of their jobs, as well as their physical environments. Controls included factors such as the workers’ childhood health, smoking, exercise, mid-career earnings, and their parents’ socioeconomic status.
The study revealed a strong association between the men’s health and the psychosocial characteristics of their employment. Further, workers who were required to make “high-stakes decisions” had better cognitive functioning. Interestingly, only weak links were found between declining health and the environmental hazards and strenuous physical demands that the workers faced late in their careers.
“Occupations that allow men to use their strongest abilities and give them a sense of achievement, independence, variety, authority, creativity, and status are associated with improved health at older ages,” Schmitz concluded.Learn More
November 3, 2015
5 Financial Goals for Teens, Young Adults
The above video qualifies as Personal Finance 101 – one critic dismissed it as nothing more than “common sense.” But that’s appropriate for the audience and worth sharing with teenagers and young adults in your life who are just starting on a financial path.
The speaker, Alexa von Tobel (three years before she agreed to sell her online advisory company to a major insurance company for millions of dollars) provided common sense goals for people who get their money the old-fashioned way – one paycheck at a time.
She proposed these five financial priorities (with minor alterations by Squared Away):
- Follow a budget.
- Have an emergency savings account.
- Strive to become debt-free. Pay credit cards in full.
- Negotiate your salary.
- Save for retirement to secure employer’s 401(k) match. …
October 22, 2015
Polishing the EITC on its 40th Birthday
The Earned Income Tax Credit is a critical lifeline that lifts some 9 million low-income Americans out of poverty – half of them children.
But the federal tax refund program isn’t perfect. The large refunds come just once a year, in the spring tax filing season. A cash crunch is a year-round problem for working families with low or erratic incomes who can’t always pay their bills.
A new study by the Center for Economic Progress identified additional financial benefits from the Earned Income Tax Credit (EITC) when participants in a Chicago pilot project received smaller, regular EITC payments throughout the year.
For example, workers who received the quarterly payments – in May, August, October, and December – were much less likely to have high-rate payday loans than people whose EITCs came all at once, helping program participants to avoid expensive late fees on payday loans. There was also evidence that workers in the EITC pilot accumulated less total debt, though the sample size was small.
The participants surveyed overwhelmingly said they preferred the periodic payments, and they reported lower stress levels than the control group. Shirley Floyd explained why in a previous blog post:
When Floyd receives a one-time tax refund in February, “the entire thing is gone” by March. But each payment she received in the pilot program, she said, allowed her “to do what you need to do.”
The program was run by the Center for Economic Progress, which provides financial services to low-income families. David Marzahl, president, was disappointed that about one-third dropped out of the research pilot, leaving only 217 participants who saw it through to the end. Nevertheless, he feels the pilot confirmed the concept’s potential to help low-income working persons with children and would like to see it expanded into a nationwide program, administered by the IRS. …Learn More
October 13, 2015
Free Help Navigating the Medicare Maze
HICAP, SHIP, SHINE – whatever your state calls the program, the mission is an urgent one.
With some 10,000 baby boomers turning 65 every day, these programs help new enrollees grapple with their Medicare options and make decisions, especially during open enrollment, which begins on Thursday and ends Dec. 7.
Medicare is “confusing” to boomers, because they “have more than one option, and most of us, when we were working, had only the PPO or the HMO” to choose between, said Christina Dimas-Kahn, program manager and a telephone counselor in San Mateo County, California’s Health Insurance Counseling and Advocacy Program (HICAP).
The top requests for assistance coming into her office are from new enrollees to Medicare, followed by the elderly who can’t afford their medications, messy billing problems between Medicare and health providers, and questions about long-term care and how to pay for it, she said.
The primary goal is “education and empowering you to enroll yourself,” said Joshua Hodges, who oversees the programs for the U.S. Administration for Community Living (ACL), which funds them. Their “beneficiary focus” has become even more crucial, he said, since the advent of Advantage managed-care plans, which complicate the choices faced by Medicare beneficiaries.
Click here for a state-by-state directory of State Health Insurance Assistance Programs (or SHIPs) – their official name. SHIPs are also available to residents of Puerto Rico, Guam, the Virgin Islands, and Washington DC. …Learn More
October 6, 2015
Your Aging Parents or Clients: 7 Tips
When Bob Mauterstock asked how many financial advisers in the room had elderly clients showing signs of diminished mental capacity, a few hundred raised their hands.
Next, he asked, how many have a protocol for these clients? Fewer than 10 put up hands.
With the U.S. population over age 85 growing at a rapid clip, advisers increasingly are facing this issue, he explained last week at the Financial Planning Association meetings in Boston. A 2009 Fidelity survey backs him up: 84 percent of advisers said they had clients touched by Alzheimer’s disease.
Mauterstock, the author of “Passing the Torch, Critical Conversations With Your Adult Children,” shared seven tips to help advisers, clients, and their families. While many of his suggestions apply to wealthier people receiving comprehensive financial services, they’re also useful to people dealing with a parent experiencing cognitive decline.
Recognize the symptoms. “Diminished mental capacity is a slow, gradual thing,” he explained. Don’t wait until the signs become crystal clear before taking action. He used the example of his own client – a Harvard-educated anesthesiologist – who started calling repeatedly and asking to speak with his accountant. Mauterstock’s staff gave him the accountant’s phone number – only to get the same call over and over again. Better to recognize the signs early, contact the client’s family, and devise a plan.
Do the Homework. Advisers should have a complete checklist of things to discuss with clients before they experience cognitive issues, from a durable power of attorney to the handling of trusts held in their name. He also recommended documenting client meetings once cognitive decline sets in. Having another adviser in these meetings is in the client’s interest – as well as the adviser’s – and helps ensure that good decisions are being made. An advocate for the client should also sit in, to help with decisions as they become increasingly difficult to work through.
Hold Family Meetings. The most important thing an adviser can do when cognitive decline starts setting in is to ask the client to call a family meeting. …Learn More
September 24, 2015
Changes to Reverse Mortgages Continue
The federal government continues to work out the kinks in its reverse mortgage program. The latest change allows a non-borrower to remain in her home after her spouse, who signed the reverse mortgage, has died.
The federal government established its reverse mortgage program in the 1990s to provide an alternative source of income for retirees over age 62. These Home Equity Conversion Mortgages (or HECMs) are secured by the equity in borrowers’ houses, and the loans are repaid only when they move or die. The loans are federally insured to ensure that borrowers get all the funds they’re promised, even if the lender fails, and that lenders are repaid, even if the value of the property securing the loan declines.
A June 2015 regulation effectively allows lenders to permit a surviving, non-borrowing spouse to remain in the home, postponing loan repayment until she moves or dies. To qualify, the original reverse mortgage must have been approved by the Federal Housing Administration prior to August 4, 2014, and the property tax and insurance payments must be up to date and other conditions met.
The spousal provision adds to earlier changes, detailed in a 2014 report by the Center for Retirement Research, aimed at improving the HECM program’s fiscal viability while protecting borrowers and lenders. These regulations were a response to riskier homeowners who had tapped their home equity to cope with the Great Recession. The regulations reduced the amount of equity that borrowers could extract upfront and also introduced financial assessments of homeowners to ensure they’re able to pay their taxes and insurance. …Learn More
September 3, 2015
Medicare Hotline Complaints Detailed
Last month, Squared Away published a primer for new Medicare enrollees choosing between their two available options: an Advantage plan or traditional Medicare plus a Part D drug plan and/or supplemental Medigap policy.
Millions of beneficiaries receive their Medicare benefits without any major problems. But today’s blog is about a report detailing complaints to the national telephone hotline operated by the Medicare Rights Center, a non-profit patient advocacy organization. Two of the top issues reported by seniors were denials of coverage and rocky transitions from employer or other health insurance into Medicare.
Here are some of the findings:
- 60 percent of calls about Advantage plans involved denials of coverage for physician care, home care, therapy, medical equipment, tests and other services. Some calls about coverage denials also involved traditional Medicare. However, in contrast to private Advantage plans, Schwarz said that private Medigap plans must follow Medicare’s lead in determining what’s covered. “If Medicare pays, then Medigap pays,” she said.
- The majority of denials of drug coverage involved medications not on the list approved by the senior’s drug plan.This primarily affects either seniors starting new medications or new plan enrollees who learn that their plan doesn’t cover all their medications. Advantage and Part D drug plans are not permitted to deny coverage in the middle of a plan year if they’ve been covering a drug for a specific medical condition, unless the drug is removed for a specific reason, such as the appearance of a new generic. They can, however, remove the drug from the list when the senior’s annual policy expires, Schwarz said. …