Research

November 17, 2022

When nursing home care uses up a widow’s savings, the federal Medicaid program will kick in and cover her bills for care. But it’s more complicated for couples.

If one spouse moves into a nursing home and the bills start piling up, the person who is still living in their home can face serious financial hardship and even poverty.

This is a significant risk facing the one in three married people in their early 70s whose spouse will eventually wind up in a nursing home, researchers at RAND found in a study on the financial impact on couples rather than individuals.

It’s not unusual to pay roughly $90,000 for a year for a semi-private in a nursing home, though many people have relatively short stays. A common misconception about Medicare is that it covers all nursing home bills. It does not. The program pays for just 100 days of care in a skilled nursing facility and only after someone has been in the hospital and needs more time for recovery or rehabilitation.

High-income retirees pay directly for care that doesn’t follow a hospital stay, because in most states Medicaid kicks in only after couples deplete all but about $3,000 in savings to cover the cost of the nursing home. There is one significant protection for couples under Medicaid’s eligibility rules: their home does not count as an asset as long as a spouse continues to live there.

But if an unlucky couple has high out-of-pocket spending due to a long stay in a nursing home, the researchers found that it increases the chances they will run through virtually all of their savings and become impoverished. While poverty is far less likely for higher-income couples, they are not immune. …Learn More

Field Work

October 13, 2022

It is a cruel farce. Scammers use the names of federal agencies charged with protecting citizens’ financial security to rip them off.

The Consumer Financial Protection Bureau (CFPB) has confirmed the existence of a new scam in which someone purporting to be from the agency contacts individuals and tells them they are eligible for a payout in a class-action lawsuit. On one condition: to collect the money, the scammer says the taxes owed must be paid upfront.

This is known as an imposter scam. Imposter scams involving other federal agencies – the IRS or the Social Security Administration – are common.

The CFPB imposter scam sounds vaguely credible since the story the victim is told is similar to the agency’s actual mission. The mission of the CFPB, established after the collapse of the subprime mortgage market, is to uncover chicanery by financial companies and get restitution to compensate victims for their losses.

The agency said the recently disclosed scam often targets older people, who are more vulnerable to falling victim if they are experiencing cognitive decline. “We can’t say it enough. The CFPB will NEVER call you to confirm that you have won a lottery, sweepstakes, class-action lawsuit, or about any other fees or taxes,” CFPB said.

A different imposter scam involving the agency occurred a few years ago. Someone used the name of a former top CFPB official to convince older victims they’d won a lottery or sweepstakes they had never entered.

“An imposter scam happens,” the official said, “when a criminal tricks you by claiming to be someone you trust.” …Learn More

Research

July 5, 2022

COVID has created perils that go beyond just the threats to our health. Reports to the FTC of financial fraud and identity theft shot up 68 percent in the first two years of the pandemic – double the pace during the previous five years combined.

Older adults with fading memories and declining cognition have always been especially susceptible to fraud. But the pandemic, by forcing them into isolation, may have worsened their vulnerabilities.

That’s one takeaway from a new study showing that older Americans who report feeling lonely or suffering a loss of well-being are more susceptible to fraud. The study, based on pre-pandemic surveys of people over 65, is also highly relevant post-pandemic and indicates that interventions to reduce social isolation might be effective in blunting their vulnerability.

For retirees with “high life satisfaction and fulfilled social needs,” the researchers said, “fraudulent opportunities promising wealth, status or social connection may be less appealing.”

The analysis relied on the Rush Memory and Aging Project, which monitors retired Chicago-area residents for signs of cognitive decline and its aftereffects. The periodic surveys include questions such as “If a telemarketer calls me, I usually listen to what they have to say” and “If something sounds too good to be true, it usually is.”

The surveys also measure loneliness, asking participants to agree or disagree with statements like “I miss having a really close friend” or “I often feel abandoned.” Well-being was determined by whether the individuals had a sense of self-acceptance and purpose, autonomy, mastery of their surroundings, and personal growth. …Learn More

March 17, 2022

Every state should have what Delaware has: a program that helps low- and moderate-income seniors find a financial survival strategy.

Since it opened in 2013, the program, Stand by Me 50+, has connected more than 2,300 older residents – mostly retirees – with federal and state aid programs, advised them of Social Security’s rules, and helped them pay medical bills or eliminate debt. The services are free.

Kathleen Rupert, a financial coach and head of the organization, helped one man in his 70s pay off $13,000 in debt. Another retiree doubled his income from Social Security after she determined that he was eligible for his late wife’s $1,700 benefit. About 44 percent of the program’s clients have monthly income of $1,500 or less.

“We go wherever the need is – to senior housing, senior centers, community centers, libraries,” she said. “We set up appointments at Panera Bread or Hardee’s – wherever they’re available.”

Squared Away interviewed three clients who said the financial solutions they got from the program have given them peace of mind. Here is the first client’s account of how Stand by Me 50+ helped her.

Peggy Grasty retired in 2010 after two decades at Elwyn, a non-profit social services agency where she was a supervisor and worked with people with mental disabilities. She continues to help people – voluntarily. The 71-year-old takes other retirees under her wing who need assistance because they have trouble walking or aren’t as capable as her.

She initially contacted Stand by Me because she couldn’t make ends meet. She has a comfortable, federally subsidized apartment in Wilmington, Delaware. But her income is limited to a $1,500 Social Security check and a $53 pension from a job long ago waxing floors and driving a bus for a Pennsylvania middle school.

Stand by Me got help for Grasty through two programs: federal SNAP food stamps and a Delaware non-profit that pays low-income residents’ medical bills. By doing this type of work, the program addresses a real need. Although myriad financial assistance programs are available for low-income workers and retirees, they are frequently unaware of the programs, assume they don’t qualify, or may need help navigating the application process. …Learn More

Field Work

March 3, 2022

One in four of the more than 900,000 Americans who have died from COVID resided in nursing homes. Yet two years into the pandemic, hesitancy about protective vaccines persists in the facilities in many states.

In January, the Supreme Court upheld a regulation by the Biden administration that required all staff to be vaccinated in long-term care facilities that receive Medicare or Medicaid funding, which is pretty much all of them.

But a newly released rundown of state vaccination rates may not provide much comfort to vulnerable elderly residents and their families living in Ohio, Oklahoma, and Missouri, which rank at the bottom – only about 70 percent of nursing home staff were fully vaccinated as of Jan. 30, according to the Kaiser Family Foundation. The national average was 84 percent.

The highest vaccination rates – 99 percent of staff – were in Massachusetts, Maine, New York, and Rhode Island.

Kaiser’s vaccination rates were calculated based on the staff working in 10,600 U.S. nursing homes who’ve received two doses of the Pfizer or Moderna mRNA vaccines or one shot of Johnson & Johnson’s traditional vaccine. The rates exclude booster shots, which are not part of the federal mandate. The nationwide booster rate for staff, which Kaiser provides separately in its report, is a low 28 percent – the Hawaii, New Mexico and California rates are double that.

A partial reason for the wide range of vaccination coverage is that states have different deadlines for complying with the federal mandate – some were in January and some are in February. But numerous states, including Louisiana, Tennessee, and Virginia, have low vaccination rates because they are, despite the Supreme Court ruling, seeking other legal avenues to challenge the mandate.

The size of a state’s population of people over 65 doesn’t seem to have much bearing on vaccination rates in nursing homes. …Learn More

February 15, 2022

Early in this new documentary, the director’s message seems to be that retirement finances are messy, elusive, and too complicated for mere mortals to understand. He’s right on all counts.

Filmmaker Doug Orchard reminds us in “The Baby Boomer Dilemma: An Exposé on America’s Retirement Experiment” that there are no easy solutions for Social Security, which economists predict will deplete its trust fund reserves around 2034. Closing the shortfall will probably require some combination of benefit cuts and revenue increases.

Social Security is “one of the most important problems we face as a nation,” The Wharton School’s Olivia Mitchell says in the documentary.

Our other primary program – a 401(k)-style retirement savings plan – seems great when the stock market is going up, as it has until recently. Viewers are reminded of the 2008 stock market crash, which panicked older workers who realized they might not have time to make up their losses before retiring. The stock market rises over long periods of time, increasing the money in retirement accounts, but it entails risks that can be unnerving for workers and force them into making bad decisions about their investments.

Finally, the filmmaker presents a real-world example – in Florida – of the difficult decisions workers grapple with in a U.S. retirement system that has largely transitioned from defined benefit pensions, which provide regular monthly income, to 401(k) and other defined contribution plans, which accumulate a pot of savings that retirees have to figure out how to manage.

“Baby boomers are sort of the guinea pig, and we’ve said, ‘Okay you figure it out guys,’ ” says David Babbel at Wharton. …Learn More

On the Web

February 10, 2022

Most workers have never created an online my SocialSecurity account to get an estimate of their future retirement benefits. The people who do use this feature tend to be older or are retired and already receiving their benefits.

If only more younger adults would log on.

One 31-year-old worker, after looking up his personal estimate for the first time, learned that his future benefit is “not quite nearly enough to survive on.” The estimate – retrieved during an interview with researchers for a new study – prompted him to think about a retirement plan now. A 43-year-old woman realized her spouse’s decision about when to retire would affect her spousal benefit from Social Security. “I had no idea,” she said, calling the information “a reality check.”

And it’s a good thing one 60-year-old logged on to my Social Security. He didn’t know he qualified for retirement benefits, because the last time he’d checked, he had not built up the earnings record – 40 quarters of work – the program requires. “I will look into it further and find out exactly what is going on,” he said.

These and other revelations came from interviews with 24 workers by University of Southern California researchers Lila Rabinovich and Francisco Perez-Arce. They combined these insights with a much larger, online survey to analyze how Americans use the valuable benefit estimates available to them.

It’s important to understand why my Social Security isn’t being used more, especially since first-time users described the online feature as easy to use and eye-opening. Going online didn’t seem to be an issue either, because the people in the survey already search for other information that way.

One of the primary reasons the workers hadn’t looked up their personal accounts, the researchers concluded, was a lack of awareness the feature existed. But this isn’t at all surprising for younger workers, who are more concerned about developing their careers than about retiring. …Learn More