Archive for January, 2008

Who Should Fund The Boomer’s Retirement?

Posted on January 31, 2008 by connellan


So, my Mom met with her accountant last week. She is getting a life insurance policy to cover her business partner’s expenses if something were to happen. Her accountant suggested putting a Long Term Care Insurance rider on the life insurance policy.

Great idea, right?

Yes, the Long Term Care rider might be a great idea. The costs of Long Term Care are an expense that most retirees have not planned for and not having long term care insurance can completely devastate your finances. Please review information on the need for long term care insurance here

http://www.newretirement.com/Planning101/Serious_Medical_Crisis.aspx .

But, here comes the shocking part of the recommendation: The accountant suggested that that my mother ask my brother and I (her children) to fund the monthly premium on the rider since we would end up paying for Long Term Care expenses if she hadn’t taken care of them herself.

Indeed, Long Term Care insurance payments are likely less expensive than the ultimate cost of Long Term Care, but why should we, her children, pay for either. We would of course fund her needs — or make arrangements for her to move in with us — if necessary, but why is the general population and a financial expert recommending that it is indeed our responsibility to fund these things?

Social Security, Medicare, Long Term Care Insurance and More — Who Should Pay for It All? Boomers? Children of Boomers? Grandchildren of Boomers?

We children of boomers are already going to have to fund Social Security and Medicare. The baby boomers are retiring with these programs being unfunded. We will be paying our taxes to fund our parents (and grandparents) retirement.

What’s worse, the under- or un-funding of these programs is not even factored into the known and mounting deficit that we are inheriting.

We children of Boomers have an incredible financial burden to bear.

Retiring Boomers Should Consider Who Should Fund These Costs

Please boomers and those advising boomers, please think about the sanity of putting these costs on your children and grandchildren. Is this what you want your legacy to be?

Retirement should be earned. Barring severe health issues, there is no logical reason to retire before you have saved enough money to cover your costs.

Staying a Step Ahead of Aging

Posted on January 31, 2008 by Jason

The New York Times, January 31st, 2008

YOU know what is supposed to happen when you grow old. You will slow
down, you will grow weak, your steps will become short and mincing, and
you will lose your sense of balance. That’s what aging researchers
consistently find, and it’s no surprise to most of us.

But it is worth remembering that the people in those studies were
sedentary, said Dr. Vonda Wright, a professor of orthopedics at the University of Pittsburgh.

Dr.
Wright, a 40-year-old runner, decided to study people who kept training
as they got older or began competing in middle age. She wanted to know
what happens to them and at what age does performance start to decline.

Their
results are surprising, even to many of the researchers themselves. The
investigators find that while you will slow down as you age, you may be
able to stave off more of the deterioration than you thought.
Researchers also report that people can start later in life — one man
took up running at 62 and ran his first marathon, a year later, in 3
hours 25 minutes.

It’s a testament to how adaptable the human
body is, researchers said, that people can start serious training at an
older age and become highly competitive. It also is testament to their
findings that some physiological factors needed for a good performance
are not much affected by age.

Researchers say that you should be
able to maintain your muscles as you age, including the muscle enzymes
needed for good athletic performance, and you should be able to
maintain your ability to exercise for long periods near your so-called
lactic threshold, meaning you are near maximum effort.

But you have to know how to train, doing the right sort of exercise, and you must keep it up.

Read more of this article

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Medical schools prepare for "silver tsunami"

Posted on January 28, 2008 by Jason

Yahoo News, January 28th, 2007

Now, Brown and other U.S. medical schools are plugging
geriatric courses into their curricula and adding specially
trained faculty members as they respond to an imminent boom in
the number of older Americans and the need to better understand
how to properly care for the elderly.

The U.S. Census Bureau projects the number of elderly
Americans will nearly double to 71 million by 2030, leaving one
physician trained in geriatric care for every 7,665 seniors.

The first members of the Baby Boomer generation, so named
for the explosion in births in the years after World War Two,
turn 65 in three years. In addition, people are living longer
than ever.

“The first ripples of the silver tsunami are lapping at the
shores of our country, but there is not a coordinated or
strategic response taking place in America,” said Richard
Besdine, who is director of the geriatrics division at Brown
University medical school in Providence, Rhode Island, and past
president of the American Geriatrics Society.

Geriatrics has never been a field of choice for young
doctors. Elderly care doctors are paid less than most other
physicians and surgeons and the aged can be hard to treat.

Read more of this article.

Senate Moves to Add Senior Benefits to Economic Stimulus Package! Senior Outrage Gets Results

Posted on January 28, 2008 by connellan


Seniors have successfully expressed their outrage at being excluded from benefiting from the Economic Stimulus package proposed by the House.

Congratulations! Congratulations?

Senate Democrats announced today that they will add $150 billion in rebates for senior citizens living off Social Security. This move will likely cause a clash with the White House and House leaders who sponsored the narrower package that excluded seniors from receiving funds in the stimulus package.

Whether or not the plan will save the economy from a recession is still in question. However, including seniors in the stimulus plan insures that financial help could be delivered to those most arguably in need — our nations retired who live on a fixed income.

Although, adding senior benefits would likely mean shrinking the size of payments to those earmarked earlier.

  • Who do you think most “deserves” stimulus package benefits?
  • Will the stimulus package save economy from recession?
  • Does anyone actually need these benefits?

Economic Stimulus Plan Offers Nothing to Retirees

Posted on January 24, 2008 by connellan



Retirees in particular should be outraged at the federal government’s economic stimulus plan: http://news.yahoo.com/s/ap/20080124/ap_on_go_co/economy_stimulus

House leaders and the White House announced today — Thursday Jan. 24, 2008 — a tentative agreement on an economic stimulus package of roughly $150 billion that would pay stipends of $300 to $1,200 per family and provide tax incentives for businesses to encourage spending. A stipend of at least $300 would be paid to all workers receiving a paycheck, even those who did not earn enough to pay taxes last year.

The plan does not extend low income programs like unemployment benefits or food stamps. And, most critically it does not offer anything to seniors not receiving a paycheck (Social Security checks do not count.) Retirees who do not “earn a paycheck” but pay taxes do not benefit at all by this “stimulus” package.

Retirees need to think about the following questions and issues:

  • Do you believe that this plan will prevent a recession or delay it?
  • What long term problem does $300 per family solve?
  • Will inflation continue to increase and, if so, how are you going to protect yourself from inflationary pressure?

The current economic crisis is not about liquidity, it’s about solvency. A cash injection might keep the children and grandchildren of retirees spending on HDTVs and Xbox 360s, but it is not going to pay off anyone’s bad mortgage. It will just end up inflating the economy and depleting what’s left of the U.S. dollar.

Most alarming is that the cost of food, health care, and energy have risen at a rate far faster than wages have increased for the average American. Some cash is not going to loosen wallets tightened by the rising prices of these core goods.

Retirees earn a fixed income and are the group who are most hurt by inflation. The value of your existing savings and income are greatly diminished. (Read more here about how inflation can devestate a good retirement plan: http://www.newretirement.com/Planning101/Inflation.aspx)

So, this economic stimulus plan does not offer any short term relief to retirees and could potentially hurt them even more in the long run because it does nothing to cure the fundamental economic ills we are facing.

Save your parents’ finances (before they ruin yours)

Posted on January 23, 2008 by Jason

MSNBC, January 23rd, 2007

If you’re already worried about your
financial future, the Federal Reserve’s emergency rate cut may do
little to calm your nerves about the economy and your investments.
Stocks are down 10 percent from the start of the year, the housing
market is in crisis and even slightly lower mortgage rates won’t help
those who want to refinance if they have little or no equity in their
homes already. It’s hard not to panic — especially when you consider
that few of us have saved as much as we want or may need to in the
future.

Our
parents may not have saved as much as they need to either. CNBC
correspondent Sharon Epperson, author of “The Big Payoff,” says that
fact could increase our financial burden down the road. 

If our moms and dads are relying on us to pay for their
expenses — from groceries to utility bills in early retirement to
long-term health care in their 70s and 80s, how will that impact our
own financial future?

There’s been a lot of attention focused on the
“sandwich generation” — baby boomers getting squeezed by having to pay
college tuition and help pay off student loans for adult children,
while also helping to financially support aging parents.

Offering
financial assistance to parents has also become a significant issue for
those in their late 20s, 30s and early 40s as their parents have fallen
short of their savings goals.

Forty-six
percent of baby boomers have saved less than $50,000, according to the
2007 Retirement Confidence Survey by the Employee Benefits Research
Institute, which also found that most boomers also haven’t calculated
how much money they’ll actually need in their nest egg to live
comfortably in retirement.

Read more of this article.

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Boomers concerned about loss of benefits

Posted on January 23, 2008 by Jason

The Arizona Republic, January 23rd, 2007

Baby boomers grew up skeptical of authority, so it’s hardly surprising
that some of them doubt the government will deliver the full Social Security and Medicare benefits they’ve been promised.

Bruce Benton, who turns 62 on July 14, is one of them. He plans to file
for early Social Security payments, rather than wait until age 65 to
draw a larger monthly check. He says his move is calculated, in part,
to protect his benefits from possible cuts by Washington.

“I doubt very much it’s going to change much for those people already drawing,” Benton said

Will the boomers see their benefits diminished during their long retirements?

It’s impossible to say for sure. Congress will likely try to shield
those in or near retirement from cutbacks in Social Security benefits.
But experts generally agree that a projected long-term explosion of
health-care costs could force changes in both Medicare and private
health insurance.

Peter Orszag, head of the nonpartisan Congressional Budget Office,
warns that stall tactics by lawmakers will only put the programs and
the economy at higher risk. If Congress fails to act, the budget office
cautions, the result will be swollen debt and deficits, higher
inflation and reduced living standards.

Read more of this article.

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Sorting Out the New Housing Market

Posted on January 18, 2008 by Jason

The New York Times, January 18th, 2007

The shape of the new American housing market — the post-bubble market —
is starting to emerge. It is one that favors the young who never owned
a house and the banks that have access to cheap deposits. It may be
harshest on the two coasts, where both distress and a newfound lack of
mobility may be on the increase.

The ideal home buyer now — in a reverse of what was true for years —
is a renter who is not burdened with a house. Such a buyer will need a
down payment from somewhere, and he or she will need enough income to
meet the monthly payments for the foreseeable future, including any
increase in adjustable rates that seems probable.

But not owning a home, which may be hard to sell, is a big plus.

A
year ago, having a home that had appreciated in value meant that an
owner could trade up to a more expensive home. Now it means that the
homeowner cannot move until the old home is sold, and that is getting
more difficult.

First, the seller has to find a buyer who can get
a mortgage. Second, the price has to be high enough to pay off the old
mortgage and leave enough cash for the down payment on a new home. Both
were taken for granted a year ago. In many markets, neither is a sure
thing now.

That has created a daisy chain of delays and cancellations that has frustrated builders, homeowners and real estate agents.

Selling
one house depends on the buyer’s selling another house, and that deal
in turn depends on yet another sale, and so on and so on.

A failure to get a mortgage approved at any stop along the way can halt the sales of an entire series of homes.

Read more of this article.

About Reverse Mortgages:  Learn all about reverse mortgages at NewRetirement.com

Consumers Being Warned of Potential Social Security Scam

Posted on January 18, 2008 by Jason

Editor’s Note:  We include this warning and wish to append one of our own.  You should never send your social security number or bank account numbers via Email to anyone, least of all to a commercial organization.

WSAV News, January 17th, 2007

We have a NEWS 3 On Your Side Consumer Alert to pass along to you.
Senior citizens are being warned of a new scam involving their social
security. 

According to the website www.consumeraffairs.com , telemarketers are calling folks around the country, posing as Social Security Administration employees.

The caller says the potential victim is due new cards and asks them to
verify personal information like their bank account number or social
security number.

The social security administration stresses do not give out personal information to any caller claiming to be from their office.

Read this article.

Mortgages, in reverse

Posted on January 17, 2008 by Jason

Long Island Business News, December 28th, 2007

Aging baby boomers are fueling a steep surge in
reverse mortgages, but regulators fear that big business could bring
back unscrupulous lenders.

The U.S. Senate Special Committee on Aging is debating how to protect seniors.

“In
the past, predatory lending practices have targeted seniors because
they have more equity in their homes and often limited financial
literacy,” said Bill Ferris, an AARP New York lobbyist.

Seniors
have been subject to aggressive marketing through direct mail,
celebrity endorsements and free lunch seminars where the risks of a
reverse mortgage are glossed over and benefits are magnified, Committee
Chairman Sen. Herb Kohl, D-Wisc., said at the hearing.

A reverse mortgage is a loan to homeowners above
62 years old that allows them to borrow against the equity in their
home and receive a lump sum or monthly payments from the lender.
Repayment of the loan is deferred until the borrower moves or dies. The
proceeds from the sale of the house covers the debt, or heirs to the
property must refinance the mortgage.

Reverse mortgage originations have climbed recently as the baby boomer generation hits age 62.

By
the end of 2007, reverse mortgage orginations will surpass 100,000, the
first year with six-degit originations in industry history, according
to the U.S. Department of Housing and Urban Development. Locally,
reverse mortgage lender Vertical Lend in Melville saw a 236 percent
rise in originations in the first 11 months of 2007.

Read more of this article

About Reverse Mortgages:  Learn all about reverse mortgages at NewRetirement.com

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