Archive for December, 2009 Page 2 of 4

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U.S. home value losses stabilize in 2009

Posted on December 18, 2009 by Jason

Reuters, December 18th, 2009

U.S. homes lost $489 billion in value during
the first 11 months of 2009, significantly less than the $3.6 trillion
lost during 2008, according to analysis of recent Zillow Real Estate
Market Reports.

Furthermore, 48 of the 154 markets tracked by Zillow, or nearly one
in three, showed gains in home values during 2009. The Boston
metropolitan statistical area, or MSA, showed the largest gain, of
$23.3 billion, while the Providence, Rhode Island, MSA was second, with
a gain of $12.4 billion, the reports showed.

The stabilization in home values reduced rates of negative equity in
the third quarter of the year. Twenty-one percent of single-family
homeowners had mortgages underwater, or greater than the value of their
homes, compared with 23 percent in the second quarter.

Negative equity has been one of the biggest banes of homeowners,
making many unqualified for home loan refinancing and preventing some
from selling.

Borrowers with negative equity are more prone to defaults and foreclosures.

“Home values stabilized significantly during the second half of
2009, with the total dollar value of U.S. homes increasing since June,”
Stan Humphries, Zillow chief economist, said in a statement.

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Cleaning up a retirement mess

Posted on December 17, 2009 by Jason

CNN Money, December 16th, 2009

Question: I’m changing jobs and would like to roll over my
$150,000 401(k) into an IRA account. Since I already have other IRAs in
individual mutual funds, I would like to put those funds as well as my
new IRA rollover in one place so I can split the percentages invested
in each individual fund just like my old 401(k) with 15 options. Do you
recommend this approach? –Randy P., Montezuma, Iowa

Answer:
I applaud your instinct to organize your far-flung retirement accounts,
but I do have some misgivings about one aspect of your approach.

Let’s start with what I think you’re doing right — namely,
gathering your savings into one place. Doing that will give you a much
better shot at creating a coherent investing strategy, monitoring the
progress of your investments and turning your savings into a nest egg
that will be able to support you comfortably throughout retirement.

As
for your actual plan to instill order — consolidating your old 401(k)
and IRAs under the roof of a new rollover IRA — I think it’s a
perfectly acceptable way to go.

If you transfer the money from
your old accounts to a rollover IRA at a mutual fund firm that has a
diverse roster of stock and bond funds, you should have no trouble
putting together a diversified portfolio. If you don’t want to be
limited to the lineup of a single fund company, that shouldn’t be a
problem either. In addition to selling their own funds, many major fund
companies and investment firms, including such biggies as Fidelity, Schwab and Vanguard,
offer access to other companies’ funds as well, often at no transaction
cost. By going this route, you can build a portfolio by mixing and
matching what you believe are the best offerings from a variety of fund
families, in effect assembling your own roster of all-star funds.

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Employers Worry More about the Impending Knowledge Drain Than the Impact of Delayed Retirement, According to MetLife Study

Posted on December 17, 2009 by Jason

Yahoo News, December 15th, 2009

Despite evidence that older workers are delaying retirement and staying
in the workforce longer, employers remain deeply concerned and anxious
about the impact of the knowledge drain – the loss of skilled
intellectual or technical labor – on their organizations. When employers
were asked which of two retirement-related issues – delayed retirement
or the knowledge drain – are of greatest concern today, three in four
employers (74%) said they are primarily concerned about experiencing a
knowledge drain as older workers retire; only one-quarter (26%) said
they are primarily concerned about the impact on their overall workforce
as older employees delay retirement. Employers’ concerns are virtually
the same when asked to look ahead 3-5 years: 70% anticipate being
primarily concerned about the knowledge drain vs. 30% anticipate being
primarily concerned about the impact of delayed retirement. These are
among the major findings from the MetLife Emerging Retirement Model
Study, released today. A full copy of the study report can be found
at www.metlife.com/emergingretirement.

“With the Emerging Retirement Model study, we were surprised to find the
extent to which the knowledge drain is both a “today” and “tomorrow”
issue for employers, even while conventional wisdom might suggest that
the effect of workers now delaying retirement – primarily out of
financial necessity – could lessen immediate concerns about the
knowledge drain,” said Cynthia Mallett, vice president, Product & Market
Strategies, Corporate Benefit Funding, MetLife.

MetLife commissioned the survey of 240 employers to examine their
attitudes and behaviors towards the aging workforce in the midst of a
deep economic crisis, and on the heels of recent regulation addressing
the retirement security provided by pension and retirement plans. With
this research, MetLife wanted to assess if and how plan sponsors are
recalibrating strategies surrounding their older workers, and identify
emerging practices that may be used to manage and optimize very
experienced workers going forward.

“MetLife has performed an important service in commissioning this study.
The findings can help employers in their strategic planning to manage
the knowledge drain or address concerns about employees delaying
retirement,” said James Klein, president of the American Benefits
Council.

Read more of this article.

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Is Your Nest Egg Safe Again?

Posted on December 17, 2009 by Jason

Newsweek, December 14th, 2009

Your 401(k) is back! Unless, that is, you actually are going to need it
soon. That seems to be the takeaway message from recent studies from
investment firms like Fidelity Investments and Vanguard Investments
showing that most workers have seen their retirement accounts recover
to precrash levels, thanks to continued contributions and rising stock
prices. Both firms, which provide 401(k) accounts, reported that most
of the workers in their programs now have more money than they did when
the stock market started its slide in 2008. The primary reason, they
reported, was that continued employee contributions helped to offset
declines in balances. The one group that isn’t wholly back consists of
older workers who have been on the job longest; that is, workers who
are closest to retirement and will probably need to tap those funds
sooner.

That’s not irony, it’s simple mathematics. Roughly 10 percent of
workers who are between the ages of 55 and 64 and who have been at
their jobs for at least 10 years still have less money than they had at
the end of 2007, according to a recent report from the Employee Benefit Research Institute and the Investment Company Institute.

Accounts
acquired over many years had more to lose to begin with. The small
regular contributions that most workers have continued to make aren’t
big enough to make up for those losses. EBRI has reported that it
expects it to take between three and five years for those workers to
recover their balances. That is the same time frame in which many of
them thought they would be retiring. (Workers can get a rough idea of
how long it will take them to recoup their losses by checking the
calculators at Kiplinger.com and Principal Financial Group.

Read more of this article.

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A Reverse Mortgage Can Help Caregivers and Family Members

Posted on December 17, 2009 by Julius

A study by the National Alliance for Caregiving and the AARP shows that nearly one third of the US population are caregivers, defined as providing unpaid care to an adult or a child with special needs.  On average these caregivers are providing care for 20 hours a week, which creates a great deal of stress.  Many caregivers had to pass up promotions, leave jobs, and cut back on time at work to provide care.  A surprising amount of caregivers (53%) reported loneliness and isolation by having to cut back on time with friends and family.

A reverse mortgage could not only help keep parents out of a nursing home and provide money for paid caregiving, but could also help prevent stress upon the child caregiver.

Use our new reverse mortgage calculator to see if a reverse mortgage is right for you.

Americans may live longer and cost more: study

Posted on December 16, 2009 by Jason

Reuters, December 14th, 2009

Americans may live significantly longer in the future than current
U.S. government projections, and that could mean sharply higher costs
than anticipated for Medicare and other programs, researchers reported
on Monday.

The researchers say that by 2050 Americans may live as much as eight
years longer than government forecasts and that spending by Medicare
and Social Security could rise by $3.2 trillion to $8.3 trillion above current projections.

Advances in medical care will accelerate, stretching out lifespans, the
MacArthur Research Network on an Aging Society wrote in the report,
published in The Milbank Quarterly.

“If we’re right we’ve got a problem,” Dr. Jack Rowe of Columbia University’s School of Public Health and chairman of the MacArthur Research Network said in a telephone interview. “Can we really afford to have everybody quit work at 65?”

The research did not address any effects of longer lifespan on the current effort to overhaul the U.S. healthcare system.

U.S. government agencies’ projections do not match the study’s for
increases in life expectancy because they assume improvements in
mortality in the coming decades will decelerate, the researchers said.

The study projects that by 2050 life expectancy for women will rise to
between 89.2 and 93.3 years and for men from 83.2 to 85.9 years.

The U.S. Census Bureau and the Social Security Administration project lower life expectancy in 2050 — no more than 85.3 years for females and 80.9 years for males.

“We don’t know that we’re right but we think rather than using these
conservative estimates the nation is better served by having a range of
estimates that include the potential for continued advances,” Rowe said.

Read more of this article.

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32 accused of $60M in Medicare fraud in 3 state

Posted on December 16, 2009 by Jason

AP Newswire, December 15th, 2009

Federal agents arrested 26 suspects in three states Tuesday, including a doctor and nurses, in a major crackdown on Medicare fraud totaling $61 million in separate scams.

Arrests in Miami, Brooklyn and Detroit included a Florida doctor accused of running a $40 million home health care scheme that falsely listed patients as blind diabetics so that he could bill for twice-daily nurse visits.

The U.S. Department of Justice
and U.S. Department of Health and Human Services said the total of 32
indicted suspects lined up bogus patients and otherwise billed Medicare
for unnecessary medical equipment, physical therapy and HIV infusions.

Miami
Dr. Fred Dweck, along with 14 people with whom he worked, was accused
in an indictment of running a scam to tap a Medicare program that pays
very high rates to care for the sickest patients.

Dweck referred about 1,279 Medicare beneficiaries
for expensive and unnecessary home health and therapy services, bribing
the owners of two Miami clinics to join the scam. He also faked medical
certifications, according to the indictment.

A telephone listing for Dweck could not be found and it was unclear if he had a lawyer.

“No matter what type of fraud is committed, there is one common denominator and that denominator is greed,” Assistant Attorney General
Lanny Breuer said. “Medicare fraud is not a victimless crime. It hurts
every American taxpayer by raising the cost of health care.”

The
raids come a week after a report that Miami-Dade County received more
than half a billion dollars from Medicare in home health care payments
intended for the sickest patients in 2008, which is more than the rest
of the country combined, according to a report by the Department of Health and Human Services’ Office of Inspector General.
Medicare paid the county about $520 million, even though only 2 percent
of those patients receiving home health care live here.

Read more of this article.

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Trading Home Equity for Cash

Posted on December 16, 2009 by Jason

The New York Times, December 16th, 2009

Would-be borrowers still find most home mortgages tough to get in
this semifrozen credit environment. A major exception is reverse
mortgages for homeowners over age 62. These mortgages represented a
growing market for the past decade. Even in recessionary 2009, the
number of reverse mortgages grew 4 percent over the previous fiscal
year.

Banks, brokers and savings and loans are happy to approve reverse
mortgages because the Federal Housing Administration insures them;
thus, lenders will be repaid even if the value of the house falls below
the balance of the loan. And many consumers find reverse mortgages
simpler to qualify for, because eligibility primarily involves
borrowers’ age, home value and equity — not their income or credit
history.

Earlier this year, moreover, Congress substantially raised the
F.H.A.’s maximum loan limit to $625,500 (the amount a borrower actually
receives depends on age and the home value but cannot exceed that
amount). And it has extended that higher limit through 2010. The agency
also set tougher standards for those who provide the mandatory credit
counseling — usually by phone — for applicants.

Roughly 80 percent of heads of household over 65 are homeowners,
federal data from 2007 show. For seniors who want to remain in their
homes, reverse mortgages can provide a lump sum, monthly checks, a line
of credit, or a combination of these. The loan is repaid when they die
or move and the house is sold. In the interim, borrowers use the money
for various purposes. They pay off their first mortgages and therefore
no longer face those monthly payments. They pay down other kinds of
debt. They invest in their houses or in other assets. They acquire a
nest egg for emergencies or money for their everyday expenses.

Read more of this article.

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

Professional Financial Advisers:  Find out what a financial adviser can do for you at NewRetirement.com.

NewRetirement Retirement Calculator:   Assess your retirement plan with the NewRetirement Retirement Calculator.

The Best Walking Partner: Man vs. Dog

Posted on December 15, 2009 by Jason

The New York Times, December 14th, 2009

Is it better to walk a human or to walk a dog?

New research from the University of Missouri has found that people
who walk dogs are more consistent about regular exercise and show more
improvement in fitness than people who walk with a human companion. In
a 12-week study of 54 older adults at an assisted living home, 35
people were assigned to a walking program for five days a week, while
the remaining 19 served as a control group. Among the walkers, 23
selected a friend or spouse to serve as a regular walking partner along
a trail laid out near the home. Another 12 participants took a bus
daily to a local animal shelter where they were assigned a dog to walk.

To the surprise of the researchers, the dog walkers showed a big
improvement in fitness, while the human walkers began making excuses to
skip the workout. Walking speed among the dog walkers increased by 28
percent, compared with just a 4 percent increase among the human
walkers.

“What happened was nothing short of remarkable,” said Rebecca A. Johnson, a nursing professor and director of the Research Center for Human Animal Interaction at the University of Missouri’s College of Veterinary Medicine.
“The improvement in walking speed means their confidence in their
walking ability had increased and their balance had increased. To have
a 28 percent improvement in walking speed is mind boggling.”

Ms. Johnson said that because some people are afraid of dogs, the
participants were given the choice of walking with a human or a dog as
the companion. Ms. Johnson said the dog walkers were far more
consistent in sticking with the program than those who were walking
with humans.

“In the human walking group, they were regularly discouraging each
other from walking,” she said. “Missouri is a hot state. We would hear
them saying: ‘It’s hot today. I don’t want to walk, do you?’ “

The response from participants in the dog-walking group — and their dog companions — was very different.

“When the people came to the animal shelter, they bounced off the
bus and said, ‘Where’s my dog?”’ Ms. Johnson said. “And the dogs never
gave any discouragement from walking.”

Read more of this article.

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

Professional Financial Advisers:  Find out what a financial adviser can do for you at NewRetirement.com.

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Retirees Spending More Time Online than Youngsters

Posted on December 15, 2009 by Julius

According to a New York Times article, with evidence from Nielsen’s third quarter report retirees are spending more time on the internet than young people.    The report reflects that more people are staring at screens than ever before.  While TV watching accounts for 99% of video watching, there is considerable growth in video watching on DVR and online.   The report even shows that people over the age of 65  spent 47 percent more time than the previous year watching video embedded within social networks, a medium that had almost a 100% growth this past year.   Truly amazing data, but we’ll see what all this video viewing does to our eye-site in the future.

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