Archive for December 30th, 2010

When Moving Seems Impossible

Posted on December 30, 2010 by Jason

The New York Times, December 30th, 2010

Patricia Wendler had been trying to sell her Southport, N.C., home
for four years. Just before Thanksgiving, she finally got an offer, with
one major contingency: Mrs. Wendler, 80, had less than three weeks to
move, or no deal.

She and her husband, who died in 2008, had retired to Southport 16
years ago from New Hartford, N.Y. In that time, the Wendlers had
accumulated furniture that wouldn’t fit in her new apartment, tools she
wouldn’t need and years upon years of paperwork. “I kind of stored
everything,” she said.

Her daughter-in-law, June Wendler, described the task of relocation
as a “tornado.” She called Jane Roberts, a senior move manager in
Wilmington, N.C., for help.

Initially, Patricia Wendler was not thrilled.

“I was a little resentful,” she said. “Why would I need someone like that? I’m not used to having people do things for me.”

The Wendlers are among more than 50,000 families to hire a certified
senior move manager this year, up from 30,000 just two years ago,
according to the National Association of Senior Move Managers. These
services don’t come cheap: Most move managers charge $25 to $60 per
hour. A top-to-bottom move can require several days of planning, packing
and unpacking, running $1,500 to $4,000 or more — not including the
cost of the actual movers.

Despite the expense, many families are finding senior move managers
indispensable, and not just because they handle the logistics. Tensions
can spill over when an elderly parent must relocate. Hundreds of
necessary decisions and actions can swallow time the family may not
have; the inevitable negotiations and concessions can trouble even the
best parent-child relationships.

Surveys show that the elderly overwhelmingly wish to remain in their
long-term homes, and to many of them moving represents a loss of
control. “These moves usually are precipitated by something that’s
happened — a health crisis, a death of a spouse, a loss of driving
ability,” said Margit Novack, a senior move manager in Philadelphia.

A good move manager helps to clear a path to the new home while
ensuring that the senior is always in control, regardless of who made
the first call. “These people don’t want anyone telling them what to do.
You have to walk a very fine line,” said Ms. Roberts.

Read more of this article.

Relocation Assistance:  Many Seniors who are retiring or downsizing elsewhere find that they need help in the herculean logistic task of getting to their new home with all their possessions, and setting themselves up there.  Relocation Assistance covers a variety of services that can help seniors with the often-traumatic process.

As boomers wrinkle

Posted on December 30, 2010 by Jason

The Economist, December 29th, 2010

FROM the moment they entered the workforce in the 1960s, baby-boomers
began to shape America’s economy and politics. They will do the same as
they leave. The first of the estimated 78m Americans born between 1946
and 1964 turn 65 in 2011, the normal age for retirement. As their ranks
swell in coming years, the burden of financing their retirement will
mount. So will their electoral importance.

Retiring boomers will squeeze the economy from two directions. The
number of people enrolled in Medicare (federally funded health care,
available from the age of 65) will grow from 47m in 2010 to 80m in two
decades’ time. Enrolment in Social Security (federally funded pensions,
available from the age of 62-67, depending on your birth year) will grow
from 44m to 73m. The cost of the two programmes will grow from 8.4% of
GDP in 2010 to 11.2% by 2030. Meanwhile, as boomers retire, the
workforce will grow more slowly, as will the taxes to finance their
benefits. The pensioner-worker imbalance and health-care inflation,
which is driving up the bill for Medicare and Medicaid, the federal
health benefit for the poor, will send the budget deficit into the
stratosphere.

Both Barack Obama and Republicans in Congress claim that reforming
such entitlements is a priority. But a demographic snag lies in the way.
In the next two decades people aged 65 and over will rise from 17% of
the voting-age population to 26% (see chart 1). Since the old vote more
readily, their actual share of the electorate will be some three
percentage points higher, reckons Robert Binstock, a political scientist
at Case Western Reserve University in Cleveland.

In the past the political priorities and voting preferences of the
elderly were much like everyone else’s. Mr Binstock says this may be
because ideological, economic or national-security issues loomed larger
than greybeard ones, such as pensions. Or it may be because politicians,
terrified of political retribution, avoided anything that would offend
the old.

Advocacy groups, especially the almost 40m-member AARP (formerly the
American Association of Retired Persons), have exploited this fear.
Their support helped George Bush create the Medicare drug benefit in
2003, and their opposition helped kill his proposal for private Social
Security accounts a few years later. In December, while most of
Washington was transfixed by the tax deal between Mr Obama and the
Republicans, AARP took aim at a scheduled cut in Medicare fees to
doctors. After 100,000 of its members wrote, e-mailed and phoned,
Congress voted almost unanimously to override the cuts, despite the $15
billion price tag.

Read more of this article.

What you pay for Medicare won’t cover your costs

Posted on December 30, 2010 by Jason

Boston Herald, December 30th, 2010

You paid your Medicare taxes all those years and think you deserve your money’s worth: full benefits after you retire.

Nearly three out of five people say in a recent Associated Press-GfK
poll that they paid into the system so their benefits shouldn’t be cut.

But a newly updated financial analysis shows that what people paid
into the system doesn’t come close to covering the full value of the
medical care they can expect to receive as retirees.

Consider an average-wage, two-earner couple together earning $89,000 a
year. Upon retiring in 2011, they would have paid $114,000 in Medicare
payroll taxes during their careers.

But they can expect to receive medical services — from prescriptions
to hospital care — worth $355,000, or about three times what they put
in.

The estimates by economists Eugene Steuerle and Stephanie Rennane of
the Urban Institute think tank illustrate the huge disconnect between
widely-held perceptions and the numbers behind Medicare’s shaky
financing. Although Americans are worried about Medicare’s long-term
solvency, few realize the size of the gap.

“The fact that you put money into the system doesn’t mean it’s there waiting for you to collect,” said Steuerle.

By comparison, Social Security taxes and expected benefits come closer to balancing out.

The same hypothetical couple retiring in 2011 will have paid $614,000
in Social Security taxes, and can expect to collect $555,000 in
benefits. They will have paid about 10 percent more into the system than
they’re likely to get back.

Many workers may believe their Medicare payroll taxes are going for
their own insurance after they retiree, but the money is actually used
to pay the bills of seniors currently on the program.

Read more of this article.

Supplemental Medicare Insurance:  Medicare’s solvency is an ongoing problem that is only going to get more heated.  Even if the benefits you qualify for are not cut, however, it may be necessary for you to supplement Medicare with other insurance.

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