Archive for April, 2007

In denial about long-term care?

Posted on April 28, 2007 by Jason

Minneapolis Star-Tribune, April 28th, 2007

Ten years ago, my dad brought together my two older brothers, my older
sister and me for a family meeting. Dad had recently placed Mom into
the Alzheimer’s unit in a nursing home after wrenching years of
forgetfulness, wandering, incontinence, anger and fear.

“It
costs $35,000 a year,” he said. “I don’t know if she’s going to be
there for 10 months or 10 years, but there’s a good chance you kids
will never see an inheritance.”

After that meeting, we watched as
Mom and our parents’ life savings declined each year. Mom slowly lost
her ability to walk, speak, feed herself or recognize anyone but our
father. Dad tried to buy nursing home insurance for Mom before her
dementia worsened. She never got it.

After seven years in the
nursing home, she died in December 2005. The bills came to $361,000.
Dad paid all of it out of their life savings. He told us to plan for
our own future. So this year I will become one of the small number of
Minnesotans with long-term-care insurance.

Most Americans don’t have a clue about how much such insurance costs,
and if they do need long-term care, they think the government will pick
up the tab, according to the AARP. Only about 180,000 Minnesotans are
covered by nursing home insurance, according to the Department of
Commerce. The average age of those policyholders is 56, the median age
about 60.

Read more of this article.   Learn more about Long Term Care Insurance.

BofA to buy reverse-mortgage business

Posted on April 27, 2007 by Jason

MSN Money, April 26th, 2007

Bank of America Corp. has agreed to buy the reverse-mortgage
business of Seattle Mortgage Co., a subsidiary of Seattle Financial
Group Inc.

Seattle Mortgage markets its reverse mortgages under the name Reverse Mortgage of America.

Charlotte-based BofA (NYSE: BAC) has been piloting reverse-mortgage products with customers in Arizona since November.

“Seattle
Mortgage has been a pioneer in developing mortgage products and
services that address the senior population’s growing need for greater
financial liquidity,” says Floyd Robinson, president of BofA consumer
real estate. “This is in line with Bank of America’s desire to grow its
consumer real estate business by utilizing our significant advantages
in size and scale.”

Financial terms of the transaction weren’t announced.

The deal is slated to close in the second quarter, pending regulatory approval.

Seattle
Mortgage entered the reverse-mortgage industry in 1995. It has a loan
portfolio of 40,000 reverse mortgages, totaling more than $4 billion in
outstanding balances. Approximately 400 Seattle Mortgage employees will
join BofA, including a retail sales force of more than 200 in 25 states
and the District of Columbia.

Read more of this article.

Social Security, Medicare, Lack Funds

Posted on April 25, 2007 by Jason

The Washington Post, April 25th, 2007

The results of the annual Social Security and Medicare Trustees report released this week are not good.

The government’s will is once again bigger than its wallet.

The report shows an unfunded liability in Social Security and Medicare over the next 75 years at $51.7 trillion.

“In just five years, these two programs will require 10 percent
of other federal revenues. That means in five years the federal
government will have to stop doing about one in every 10
non-entitlement things it has been doing in order to balance the budget
and keep its promises to the elderly,” said John Goodman, president of
the National Center for Policy Analysis.

Because of the Bush administration’s emphasis on reforming
Social Security, people are not as aware about Medicare’s fiscal
problems. The truth, as reflected in the report, is that Medicare is in
worse shape.

Medicare expenditures are expected to reach $483 billion this
year, making it the second-largest government expense behind the
Defenses Department.

Medicare costs are at the mercy of a two-headed monster. A
ballooning price tag for medical care will be coupled with an explosion
in the number of retirees with 76 million members of the baby boom
generation moving closer to becoming eligible for benefits. Combined,
those forces will overwhelm Medicare hospitalization program by 2019,
while Social Security is slated to run out of money by 2041.

Read more of this article.

Patients struggle with Medicare wait

Posted on April 24, 2007 by Jason

Dallas Morning News, April 24th, 2007

Chris
Richmeier lives for tomorrow – August, to be exact. That’s when his
Medicare coverage will begin and his struggles paying for medical care
will end.

Mr. Richmeier, who’s 44 and lives in Denton,
suffered a traumatic brain injury in an auto accident in 2005 and soon
qualified for Social Security disability benefits.

But
like 1.5 million other Americans with severe disabilities, he has to
wait two years to get help from Medicare for doctor visits, hospital
stays and medications.

“It’s devastated us,” said his
wife, Christine. “We never had to ask anyone for help. Now our kids get
clothes from resale shops. We get meat once a month from our church.”

A coalition of 34 consumer groups, led by the Medicare Rights Center,
has called the waiting period “cruel and arbitrary” and has begun to
lobby Congress to end it.

One of the
coalition’s strongest allies on Capitol Hill is U.S. Rep. Gene Green,
D-Houston, who says people with severe illnesses have died while
waiting for help.

“Some find other insurance that isn’t
as good as Medicare, but many can’t afford health care coverage at all,
so they forgo treatment and become sicker,” he said.

Mr.
Green and the consumer groups say the two-year wait is a gaping hole in
Medicare, but some analysts question whether Congress can afford to
close it.

Read more of this article.

Redefine Retirement

Posted on April 19, 2007 by Jason

Health more important than money, says guru

Edmonton Sun, April 18th, 2007

Half the room went red-faced.

The
question the financial guru posed at a ScotiaMcLeod retirement
symposium, was this: “True or false … sexual activity naturally
declines with age.”

These aging boomers were listening to
Barry LaValley tell them how to redefine retirement in a world where
retirement is changing and what to expect when they finally kiss the
boss goodbye.

The answer? “False,” said LaValley,
explaining that a healthy sex life reflects good health, and good
health — more than money — defines a good retirement.

LaValley’s workshop also startled some
with eye-opening revelations, such as: True or false: The average age
that a woman first becomes a widow in Canada is 69.

Most answered true, and were shocked to hear the age is 55.

And that spousal relationships don’t strengthen in retirement. In fact,
70% of self-employed who retire, return to the workforce. Why? “Their
spouse kicks them out,” said LaValley.

Read more of this article.

Curbing Global Warming Made Easy

Posted on April 18, 2007 by Jason

Editor’s note:  Consider this one of the many possibilities for the use of the money from a reverse mortgage.

E-Wire, April 18th, 2007

By using reverse mortgages for investing in solar
and other alternative energy we could rapidly transition away from CO2
emitting energy sources at the home and work place. Congress should
immediately enact Clean Energy Reverse Mortgage legislation and fulfill
it’s duty of protecting our people, our country and planet.
A conventional Reverse Mortgage is now currently available to home
owners over 62 up to $300,000. A Clean Energy Reverse Mortgage could be
available to home as well as commercial property owners. A loan of
$25,000 would make the transition to clean energy very attractive to
home owners.
Not only would property owners help to curb global warming on an
individual level , they would also experience a jump in net worth of
between $20,000 to $30,000 beyond the cost of solar panels or other
alternative energy. Home owners would see a dramatic reduction in their
utility bills. Their homes would also appreciate an estimated $20,000
if they saved at least $1000 a year on their energy costs, which they
should easily be able to do. There are also state and federal tax
rebate rebate incentives which in some state amount to close to $9,000.
The other great attraction to reverse mortgages is that it requires no
money down and no payments until the property is sold.

Read more of this article.

Survey Reveals Most Satisfying Jobs

Posted on April 18, 2007 by Jason

Yahoo News, April 18th, 2007

Firefighters, the clergy and others with professional jobs that involve
helping or serving people are more satisfied with their work and
overall are happier than those in other professions, according to
results from a national survey.

“The most satisfying jobs are mostly professions, especially those
involving caring for, teaching and protecting others and creative
pursuits,” said Tom Smith, director of the General Social Survey (GSS)
at the National Opinion Research Center at the University of Chicago.

The 2006 General Social Survey is based on interviews with randomly
selected people who collectively represent a cross section of
Americans. In the current study, interviewers asked more than 27,000
people questions about job satisfaction and general happiness. Individuals’ level of contentment affects their overall sense of happiness, Smith said.

“Work occupies a large part of each worker’s day, is one’s main
source of social standing, helps to define who a person is and affects
one’s health both physically and mentally,” Smith states in a published
report on the study. “Because of work’s central role in many people’s
lives, satisfaction with one’s job is an important component in overall
well-being.”

Read more of this article.

How To Retire Early

Posted on April 16, 2007 by Jason

Editor’s note:  It is the generally the position of NewRetirement.com that early retirement is very frequently not in the best interests of a potential retiree.  However for those who are interested in the possibilities of retiring before they reach retirement age, here’s something to consider…

KCCI Des Moines, April 16th, 2007

Alan Love was virtually a life-long company man at a California
clothing manufacturer, working his way from entry-level to management
and earning promotions, higher salaries, and longer hours along the
way. Alan and his wife Willow were scrupulous savers, and by last
summer, they figured they could afford to leave the rat race. So Alan
walked into his boss’s office and announced his retirement. But six
weeks later, life threw him a curveball: Willow found out she was
pregnant.

Unusual for a retiree, perhaps, but not as surprising as it sounds: After all, Alan is only 44, and Willow is 37.

The
Loves might be an extreme case, but they’re part of a nationwide trend
toward retirements that start earlier and last longer. In 1950, the
average American retirement lasted 8.1 years; by 2020, that interval
will stretch to 20 years. And many retirees are already cracking the
30-year mark — in some instances, spending more years in retirement
than they did working. Of course, retiring early can be a mixed
blessing. Vanishing pensions and uncertainty about health coverage and
Social Security make the financial outlook hazy for many. On the plus
side, today’s retirees are healthier and more vigorous than their
predecessors, and in general they’re more willing to try new pursuits
in later life. With all this in mind, SmartMoney canvassed the experts
to gather the best advice about leaving full-time work behind, early
and on your own terms.

Read more of this article.

Boomers Go on Spending Bender

Posted on April 13, 2007 by Jason

Financial Planning.com, April 13th, 2007

Forget spending retirement in a rocking chair on the front porch.

Affluent Baby Boomers approaching retirement are more likely to be
traveling the world than watching it go by, according to a recent
report by the U.S. division of Toronto-based Sun Life Financial.

And this active lifestyle is probably going cause retired Boomers to
deplete more savings than expected–and sooner than expected.. Sun Life
surveyed 2,000 people in January, half of whom were recently retired,
half of whom were approaching retirement–and all of whom relied on
advisors and had at least $250,000 invested. In the first five years of
retirement, according to survey results, many retirees may actually
spend more than they earned each year working.

“Retirement is not a flat line,” said Mary Fay, senior vice
president and general manager for Sun Life’s annuities division, in
Wellesley, Mass. The old rule of thumb that retirees should plan to
live on a fixed annual income equal to roughly 80% of their annual
salaries in the years leading to retirement is outmoded, she said.

Read more of this article.

Corporate Pensions Had Strong Year, Study Says

Posted on April 12, 2007 by Jason

The Washington Post, April 12th, 2007

The nation’s corporate pension funds had a healthy 2006, buoyed by
stronger-than-anticipated returns from the stock market and
slower-than-anticipated growth in expected payments to retirees.

That’s
the conclusion of the Milliman consulting firm after reviewing the 100
biggest companies that offer pension plans. The companies manage $1.3
trillion in pension benefits, about 75 percent of traditional-pension
money in the U.S. private sector.

Last year, Milliman and other pension experts predicted that the net
worth of many companies offering traditional pensions would fall
because of accounting rule changes that took effect in 2006. The rules
require a company to reflect on its balance sheet the market value of
all pension assets and obligations, rather than just those payouts that
affect its earnings for the year.

But the stock market performed
better than expected — offering average returns of 12.8 percent,
rather than the 8.4 percent the consultants predicted — meaning the
funds’ stated ability to pay future expenses was not hurt by the new
rules as much as was predicted a year ago, reported the Milliman study,
which was released yesterday.

Read more of this article.

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