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3 Changes That Could Improve Retirement
Tweet Share on Facebook February 28, 2011 Comment (2)Congress and the states are struggling with soaring deficits and the widening recognition that the United States is broke, if not bankrupt. On a personal level, the same reality confronts millions of Americans moving closer to their retirement years. Most people do not have anywhere near the amount of money they will need for retirement, and there are no easy answers in sight.
[See 10 Ways to Boost Your Social Security Checks.]
Unfortunately, it's not clear that Congress knows what to do about consumers, either. As it grapples with the deficits, it must restore Social Security's self-sustaining financial foundation. This will be a contentious fix, but in financial terms, not so hard. Dealing with Medicare and Medicaid will be much, much more difficult. But the toughest challenge may not be to restrain the programs' out-of-control spending trajectories. Instead, it will be to reinvent retiree income and medical programs and offer us a reasonable chance at enjoying our later years.
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How to Ensure Your Last Wishes Are Carried Out
Tweet Share on Facebook February 25, 2011 CommentRetaining control over life decisions and maintaining dignity as the end of life approaches are top priorities for nearly everyone. These objectives can be achieved by good planning and the preparation of the proper directives under your state's laws. These safeguards have been greatly improved in many states in recent years. Still, experts say, few seniors have the right tools to make sure their end-of-life wishes are followed by family members and caregivers.
"There is some research out there that indicates that 90 to 95 percent of people think advance directives are a great idea," says Karen B. Hirschman, a research assistant professor who specializes in aging at the University of Pennsylvania. However, she adds, at most, 30 to 35 percent of people have actually developed such directives, and the total may well be less.
[See 10 Cars Older Drivers Love.]
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Many Retirement Communities Still Await Recovery
Tweet Share on Facebook February 23, 2011 CommentMany retirement communities continue to cut prices and offer assistance packages to lure new seniors. While the idyllic lifestyle promoted by many facilities is still a dominant marketing image, they also are pushing the more practical benefits of their communities and trying to find ways to cope with the continued weakness in housing prices. Traditionally, many seniors have financed their move into retirement communities by selling their homes and using the proceeds to pay the often-steep entrance fees at many communities.
[See 10 Cars Older Drivers Love.]
Continuing care retirement communities (CCRCs) offer a full range of services—independent living, assisted living and care for disabled residents, and often dementia care as well. These are often the most expensive facilities for seniors, and they've had to scramble the hardest to cope with the downturn. The National Investment Center for the Seniors Housing & Care Industry (NIC) produces extensive pricing and occupancy reports on communities throughout the country.
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How to Overcome 12 Retirement Challenges
Tweet Share on Facebook February 22, 2011 Comment (15)The roadblocks to a successful retirement have become more frequent and severe, ranging from Wall Street and housing meltdowns to rising healthcare costs and concerns about the long-term stability of Social Security, pensions, and government safety net programs. But according to a new study by MetLife and the Scripps Gerontology Center at Miami University, there are common ways that people are stepping up to create better outcomes for their retirement years.
[See 10 Cars Older Drivers Love.]
More than 1,000 people ages 50 to 70 were surveyed through online polling and nearly 75 people were given in-depth, one-hour interviews. The heightened uncertainty about retirement was reflected by the finding that more than half of those interviewed had already experienced an event that changed their retirement plans.
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Older Buyers a Growing Market for Automakers
Tweet Share on Facebook February 18, 2011 Comment (2)Discussion about older drivers usually involves safety and the thorny issue of when they should relinquish the keys to their vehicles. In fact, older drivers have been turning over their keys a lot. But it's often so they can buy new vehicles. Over the past several years, while automakers have been hammered by the recession, buyers age 65 and older have become a steadily increasing share of the auto market.
J.D. Power and Associates tracks new car registrations for 12-month periods ending in April. In the year covering registrations from May 2006 to April 2007, nearly 18 percent of new car buyers were at least 65 years old. That percentage has risen steadily since then, to 19.5 percent in 2008, 21.7 percent in 2009, and 25 percent in 2010. The trend likely has two major causes: society is getting older, and older drivers were more able to afford vehicles during the recession than younger drivers.
[See 10 Cars Older Drivers Love.]
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Obama's 6 Social Security Principles
Tweet Share on Facebook February 16, 2011 Comment (72)For a program everyone agrees is not in crisis, there sure are a lot of proposals swirling around to "reform" Social Security. There are even a lot of non-proposals, some of which you can find in President Obama's just-released 2012 recommended federal budget.
The "big three" entitlement programs—Medicare, Medicaid, and Social Security—have long been the elephants in the room for our enormous deficit problems. They consume 60 percent of federal spending and will be at 70 percent before you know it. Any effort to curb spending on these programs is absent from the President's budget. And while Republicans complain about how wimpy the White House's proposed budget cuts are, they aren't eager to tackle entitlements, either. They're hardly alone.
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Seniors 'Near Poverty' at Risk in Deficit Cuts
Tweet Share on Facebook February 14, 2011 Comment (35)Anyone living on a fixed income has to look uneasily at the federal government's rendezvous with deficit destiny. Beyond partisan calls to cut more or less, sooner or later, from different programs, the underlying reality is that stiff budget cuts must be enacted to at least begin narrowing the deficit. Older Americans who don't have the option of seeking additional income have very little choice but to reduce their standard of living should their benefits be trimmed. And for millions of older Americans, there is simply nothing to cut.
[See 10 Ways to Improve Your Finances in 2011.]
During the past 40 years, one of the seldom trumpeted successes in the United States has been the enormous reduction in senior poverty. Social Security, Medicare, and Medicaid have provided income and health supports that reduced poverty among people age 65 and older from well over 30 percent to less than 10 percent—the lowest poverty rate of any population group in the country. When the dust cleared from the Great Recession, poverty rates had risen for all groups except the elderly. For that group, the poverty rate fell further, to 9.7 percent in 2009 and 8.9 percent last year. By contrast, the poverty rate among children is roughly twice as high.
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Immigration Reform: A Key Retirement Issue
Tweet Share on Facebook February 11, 2011 Comment (17)With Social Security and Medicare programs facing deficit-cutting proposals in the new Congress, seniors and their advocacy groups already have big issues on their plates. Yet a good case can be made that immigration reform is another emerging issue for millions of seniors who need care. The shifting outlook has several components—rising demand for care due to a growing elderly population, a sustained effort to provide elder care in homes rather than institutions, a shrinking work force of Americans, and an economic recovery that will eventually reduce the supply of family members available to provide unpaid care.
[In pictures: 10 Senior-Smart Community Ideas]
Historically, many paid caregiving jobs have been filled by immigrants. Immigrants who are physicians and other skilled medical workers are particularly important in rural and underserved U.S. markets. The demand for less skilled in-home care aides also has been filled in part by immigrants, although precise data could not be obtained. The U.S. Bureau of Labor Statistics does not ask immigration status in its research, and does not track caregivers as a separate job category. It does measure "nursing, psychiatric, and home health aides," and says that in 2009 there were about two million people in this category. Nearly 90 percent were women, 34 percent were black or African American, and more than 12 percent were Latino or Hispanic. There are another 955,000 "personal and home care aides," of whom 85 percent were women, 21 percent black or African-American, and 19 percent Latino or Hispanic.
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How to Decide if an Annuity is Right for You
Tweet Share on Facebook February 9, 2011 CommentConverting retirement account holdings into actual income can require even more work than accumulating savings in the first place. There can be thorny tax considerations and challenging timing issues about when to sell a security. If you need predictable and steady monthly income payments from your retirement investments, you need to create and manage a process to do so.
Annuities, by contrast, can do nearly all this work for you. You still need to convert retirement account holdings into the money needed to buy or fund an annuity. But once the product is in place, it can provide steady and guaranteed payments for the rest of your life. Annuities also often include death benefits and other insurance features that may make sense to you. In exchange for all these features and certainty, investors traditionally have put up with high fees, stiff surrender charges for voiding their annuity contract, and cumulative returns that can be tame compared with stock market gains.
[See the Best—and Worst—Places to Build a Nest Egg.]
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How to Put Your Retirement Back on Track
Tweet Share on Facebook February 7, 2011 CommentPeople may be able to restore their recession-damaged retirement plans by making relatively small additions to their savings. Even people nearing retirement—those born between 1948 and 1954—need to boost savings by as little as 3 percent to nearly 7 percent a year. The make-up needs for younger groups are much smaller, according to a detailed study from the Employee Benefit Research Institute (EBRI), a business-funded think tank.
The institute stressed that these figures apply only to people who earn enough money to be able to afford boosting their retirement savings. Many people in the lower half of wage earners would have to set aside unrealistic percentages of their pay—more than 25 percent—to even have a chance at funding an adequate retirement. For higher-earning households, the range of the "make up" payments reflects different probabilities of success, plus a person's age, income, and mix of investments during the 2008-09 market downturn.
[In pictures: 10 Senior-Smart Community Ideas]
