Archive for August, 2006

Seniors flock to private Medicare plans

Posted on August 30, 2006 by Jason

Pittsburgh Post-Gazette, August 29th, 2006

Hundreds of thousands of seniors are signing up for a type of privately
run Medicare plan that delivers traditional benefits without the usual
restrictions on access to doctors and hospitals. In turn, some of the
nation’s biggest health insurers are launching more such plans and
marketing them in more areas.

The plans, called private fee for service, are a type of privately run
Medicare alternative known as Medicare Advantage. Advantage plans wrap
physician and hospital services in one, some with additional benefits.
Instead of paying beneficiaries’ claims directly, the federal
government pays insurance companies to manage the care, with the hope
of reducing Medicare spending. To entice seniors to sign up, costs for
private plans are cheaper on average than those for traditional
government-run Medicare.

But recently such plans have become an even better deal. As part the
sweeping law that created the new Medicare prescription-drug benefit,
Congress raised the government’s reimbursement rates to companies
offering Medicare Advantage plans to about $10,000 per enrollee per
year. That has led insurers, eager to bring in the new business, to
offer Advantage plans with lower premiums but often more benefits, such
as vision or prescription drugs.

Read more of this article.

Getting Going: Retirees should be wary of family betrayal

Posted on August 30, 2006 by Jason

Pittsburgh Post-Gazette, August 30th, 2006

Note to retirees: Beware the family.

Financial swindles are one of the fastest-growing forms of elder abuse.
By some estimates, as many as five million senior citizens are
victimized each year, says Sara Aravanis, director of the nonprofit
National Center on Elder Abuse, which provides information to federal
and state policy makers. Because of the problem’s spread, “many states
have laws authorizing financial institutions to report suspicions of
elderly abuse,” says Bruce Jay Baker, general counsel for the Illinois
Bankers Association. Earlier this summer, the Securities and Exchange
Commission hosted a Seniors Summit to highlight the issue, with SEC
Chairman Christopher Cox noting that protecting seniors’ pocketbooks
“is one of the most important issues of our time.”

Yet it’s not dodgy financial experts or crooked caregivers who are the
biggest threat. It’s family. Children, siblings, grandchildren, nieces
and nephews, and even spouses are the people most likely to rob the
elderly, according to elder-law advocates and attorneys. The data that
exist — albeit in a spotty manner — suggest that financial crimes
rank as the third-most prevalent abuse of the elderly.

Senior Class

Getting Going: Retirees should be wary of family betrayal

Wednesday, August 30, 2006

The Wall Street Journal

Note to retirees: Beware the family.

Financial swindles are one of the fastest-growing forms of elder abuse.
By some estimates, as many as five million senior citizens are
victimized each year, says Sara Aravanis, director of the nonprofit
National Center on Elder Abuse, which provides information to federal
and state policy makers. Because of the problem’s spread, “many states
have laws authorizing financial institutions to report suspicions of
elderly abuse,” says Bruce Jay Baker, general counsel for the Illinois
Bankers Association. Earlier this summer, the Securities and Exchange
Commission hosted a Seniors Summit to highlight the issue, with SEC
Chairman Christopher Cox noting that protecting seniors’ pocketbooks
“is one of the most important issues of our time.”

Yet it’s not dodgy financial experts or crooked caregivers who are the
biggest threat. It’s family. Children, siblings, grandchildren, nieces
and nephews, and even spouses are the people most likely to rob the
elderly, according to elder-law advocates and attorneys. The data that
exist — albeit in a spotty manner — suggest that financial crimes
rank as the third-most prevalent abuse of the elderly.

For victims and family members out to help, the way to combat the crime is to know what to look for and how to prevent it.


The abuses: Some of the offenses are straightforward: A grandson swipes
checks and makes them out to “cash”; a daughter uses the
power-of-attorney over Mom’s bank account to apply for an ATM card and
withdraws money without authority; a son taking care of Dad’s finances
uses his father’s credit card for personal purchases.

Read more of this article.

How moving to nursing home affects reverse mortgage

Posted on August 29, 2006 by Jason

Mortgage101.com, August 28th, 2006

DEAR BOB: My 90-year-old mother-in-law has
recently moved permanently into a nursing home. She has a new reverse
mortgage on her free-and-clear home to pay her living costs. My husband
will inherit her house when she passes on. At that time, we plan to
demolish it and build new. What are the financial ramifications of
renting the house to tenants until she passes away? He is reluctant,
whereas I hate to see a nice house sitting there vacant that can bring
in $2,000 monthly rent. –Elaine H.

DEAR ELAINE: Bad news! Because your mother-in-law permanently moved
out of her principal residence, her reverse mortgage will become due
and fully payable in full after 12 months of her non-occupancy of the
house.

Reverse mortgage lenders periodically check up
on their borrowers to see if they (a) are still alive and (b) are
occupying their primary residence (except for absences less than 12
months).

If the house is rented to a tenant, when the
reverse mortgage lender discovers the owner no longer lives there, the
lender can require the loan balance be paid in full or it will be put
into foreclosure. For more details, read the reverse mortgage documents
and consult a local real estate attorney.

Read more of this article.   Learn more about Reverse Mortgages.

The Growing Cost of City Pensions

Posted on August 28, 2006 by Jason

The New York Times, August 27th, 2006

To the Editor:

Re “Public Pensions in Trouble” (editorial, Aug. 22):

As
a person with a decent public pension, I agree with your emphasis on
responsible public policy when it comes to government pensions. But you
seem to support a position that pensions should be cut back, period.

But wouldn’t a better position be that decent pensions are a good thing, so it is imperative that we take care of them?

You seem to be saying: Take care of the money. A better message would be: Pensions are good for working people.

Elliot Kotler
Ossining, N.Y., Aug. 22, 2006

Read more of this article.

Beware of advisor shilling ‘lump-sum’ reverse mortgage

Posted on August 28, 2006 by Jason

Miami Herald, August 27th, 2006

Q: I began getting Social Security last February. This
year I lost my job. A financial advisor suggests I take a reverse
mortgage ”lump sum” and invest it to supplement my Social Security
income. I have no other income and no heirs. My home is worth about
$400,000 with a $77,000 mortgage at 4.25 percent interest, which
adjusts by 2 percent next year. I love my home and want to stay here as
long as possible. Do you think a reverse mortgage will work for me?

A: Yes. But I am very worried that so-called financial
advisor might have suggested you take a reverse mortgage lump sum so he
can sell you an annuity or other investment to earn himself a large
sales commission.

If you want to receive monthly lifetime income from a reverse
mortgage to supplement your Social Security income, you can elect that
choice direct from the reverse mortgage lender. You don’t need that
financial advisor to help you.

However, you will need to use $77,000 of your reverse mortgage
entitlement to pay off your current mortgage. Then you won’t have any
more monthly mortgage payments. The balance of your reverse mortgage
can be taken as lifetime monthly income, a credit line (except in
Texas), lump sum or any combination.

Read more of this article.   Learn more about Reverse Mortgages.

Senior Citizens Most Concerned about Health

Posted on August 24, 2006 by Jason

Primarily want to maintain mental ability – fear
Alzheimer’s the most

About seven out of ten senior citizens are concerned about
their health and wellbeing and 80 percent try to keep up with health
news – mostly from their doctor, but secondly on the Internet.
Preserving their mental function is the biggest health concern and
Alzheimer’s is the disease they fear most. These are part of the
findings in a survey of American ages 63 to 80 for UnitedHealthcare’s
SecureHorizons.

The Senior Security Study was national survey of
seniors ages conducted to identify what seniors want and are most
concerned about across a wide range of lifestyle, wellness and
healthcare topics.  Among the survey’s top findings:

More Seniors Care about Health than Wealth:

Nearly seven out of ten seniors (69%) expressed
concerns about their health and wellbeing, a larger percentage
than expressed concern about other categories such as personal
finance (52%), often considered a top source of anxiety among older
Americans; spiritual wellbeing (58%) and receiving adequate
care in old age (56%).

Read more of this article.

Is A Reverse Mortgage Right For You?

Posted on August 24, 2006 by Jason

Best Syndication, August 23rd, 2006

In the last few years reverse mortgages have been growing in
popularity among the elderly. While there are numerous advantages
associated with reverse mortgages there are also disadvantages as well.
Before you take out a reverse mortgage, be sure you have the whole
story.

First, understand what is involved in a reverse mortgage. Basically,
this type of mortgage allows you to transfer a portion of your equity
into cash without the need to take on an additional monthly bill, as is
the case with a regular home equity loan, or sell your home.

With a reverse home mortgage, unlike a regular mortgage, you receive
money for the equity in your home and are not obligated to pay it back
until you are no longer living in your home. It should be understood
that the money will need to be paid back; either when you sell your
home, move to another principal residence or die.

In the event that you have a lot of equity in your home but you’re
having difficulty meeting your monthly financial obligations, this can
be a good option. Other advantages include the fact that the money you
receive from the reverse mortgage is typically tax-free because it will
have to be repaid. In addition, depending on which lender you choose,
there are typically no income restrictions.

Read more of this article.   Learn more about Reverse Mortgages.

How To Turn Disadvantages Of A Reverse Mortgage To Your Advantage

Posted on August 24, 2006 by Jason

Best Syndication, August 23rd, 2006

When it comes to a reverse mortgage, wise consumers weigh the advantages and disadvantages prior to signing on the dotted line.

Let’s start on a positive note, you could do what most borrowers do
and opt for the reverse mortgage line of credit. Just think about how
you would then be able to draw on the loan whenever money is required
for daily living expenses, medical bills, prescription costs, home
repairs, etc. This could really enhance your retirement years including
in-home care expenses in later years.

Furthermore, your new found income does not affect regular Social
Security payments or Medicare benefits. And lenders cannot foreclose on
the loan for the life of the borrower.

Okay, that’s all well and good but how do you turn the major
disadvantages of a reverse mortgage into a positive one? It’s all in
the perspective. For every negative there is a positive to obtaining
this loan.

It’s true a reverse mortgage loan may affect your eligibility for
state and federal government assistance programs such as Medicaid but
it also gives you an important financial cushion and does not (as
mentioned above) affect your regular Social Security payments or
Medicare benefits.

Read more of this article.   Learn more about Reverse Mortgages.

Retirees Can Keep Investing

Posted on August 23, 2006 by Jason

Black Enterprise, August 21st, 2006

Retirees don’t have to sell their stocks and switch to funds or
income-only investments. With patience and the right kind of stocks,
you can stay in the investing game indefinitely.

Vince
Tranchita, 75, bought his first stock, Pittsburgh Plate Glass, in 1963.
Although its name has changed (it’s now called PPG Industries), he
remains a fan because of its consistent profitability and loyal
customers. Says Tranchita: “When I buy a stock, I plan to hold on to it
for the long term.”

Tranchita has taken that statement to the
bank. His other hard- and-fast rules: Stick primarily to industry
leaders, and buy growing, dividend-paying blue chips when they’re
selling at reasonable prices. And insist on companies with ethical
managers who align their interests with those of shareholders.

The approach has paid off handsomely for Tranchita, who has built a
substantial nest egg from his investments in the stock market. “Stocks
have been very good to me,” he says.

Read more of this article.

Annuities make sense if you choose carefully

Posted on August 22, 2006 by Jason

Arizona Daily Star, August 20th, 2006

Most variable annuities are the lemons of retirement vehicles
because of many sour features: They are generally overpriced, oversold
and fully taxable when you withdraw the money from them.

That’s not the end of discussion, though, when it comes to these
complex amalgams of insurance and mutual funds. There are instances
when annuities make eminent sense, although you have to choose them
carefully.

When combined with thoughtful financial planning, annuities can provide a reliable, insured income stream at retirement. They essentially guarantee a
monthly payment and are especially valuable when you don’t have a
defined-benefit pension.

The enlightened view about annuities is that they should protect
you from inflation and ensure that you won’t outlive your nest egg.
Sadly, most annuities on the market don’t do that and you have to be
careful if you’re examining this product.

Read more of this article   Learn more about Annuities
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