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6 Key Money Issues for Seniors in 2012
Tweet Share on Facebook November 30, 2011 Comment (1)Can a nation hold its breath for an entire year? We may find out in 2012. Rarely have economic, political, and social forces come together to produce so much momentous uncertainty and rising discontent. Will the U.S. and world economies recover or lapse back into recession? Will our government continue to be paralyzed as a brutal election fight occupies center stage? Just how far down the road can we keep kicking our enormous unemployment and deficit problems?
[In Pictures: The 10 Best Places to Retire in 2012.]
For older Americans, the consequences of uncertainty are always high. People living on a fixed incom have limited ability and time to recover from periods of economic stagnation. It is easy for experts to urge retirees to save more and plan better for their later years. But doing so in 2012 will be neither easy nor obvious. Here are six issues that will affect senior livelihoods in 2012.
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Make a Housing Plan for Retirement
Tweet Share on Facebook November 29, 2011 Comment (1)One of the major decisions facing us as we age is where to live in our later years. Anyone over 60 who has grown children should be developing a plan for where to live when they're 75, 85, and even older. Like solid retirement investment programs, your housing plan can be torpedoed by recessions and personal reversals. The current depression in many local housing markets doesn't help, either. But without a plan, you're leaving too much to chance.
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Big Drug Hikes in Some 2012 Medicare Plans
Tweet Share on Facebook November 28, 2011 CommentMedicare beneficiaries have until only December 7 to make choices for their 2012 insurance plans. The good news for 2012 is that Medicare premiums will be lower for many people. The bad news is that some insurers have changed how they charge for certain prescription drugs. Even plans with lower premiums may not have lower out-of-pocket costs, depending on the specific prescription drugs needed by a plan participant.
[See the 10 Sunniest Places to Retire.]
On the premium front, Part B premiums for basic Medicare are rising by only $3.50 a month for many people already on Medicare. The resulting $99.90 monthly premium will represent an actual decrease for people who began receiving Medicare in the past two years. They've already been paying higher premiums.
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Talking Turkey About Aging and Retirement
Tweet Share on Facebook November 23, 2011 CommentIf you are sitting down with the older and younger generations of your family this Thanksgiving, give some serious thought to discussions about the future. How are the older members of your family faring? What needs to be done about their future living, health, and financial plans? These discussions should be supportive and caring, but family tensions often make them stressful and negative.
[In Pictures: The 10 Best Places to Retire in 2012]
Here are five topics to consider raising at the appropriate time during this holiday period:
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How to Downsize Your Possessions
Tweet Share on Facebook November 22, 2011 Comment (2)Downsizing a household is a challenge often made harder by the emotional tug of belongings and mementos. Some people are heartbroken at auctioning a cherished item on eBay or selling it on Amazon; others are in denial, and either refuse to move or cart their very own Mt. Memorabilia to a new home. There, the prospect of its eventual disposition looms ever larger, while the abilities of many aging homeowners are moving in the opposite direction.
[See 10 Tips for Caring for Aging Parents.]
Experts say downsizing requires the same type of careful planning and execution as a retirement plan. Because most downsizing efforts are tied to the sale of a home, it is wise to begin the downsizing process as much as a year before you sell your home. "In order to sell a house today, you have to stage it," says University of Kansas gerontologist David Ekerdt. "You have to downsize and take the clutter out of the house before you even put it on the market."
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Year-End Tax Planning Tips for Seniors
Tweet Share on Facebook November 21, 2011 Comment (1)With less than six weeks left before the end of the year, it's time to get serious about planning decisions that will affect your tax returns for 2011. U.S. News interviewed tax professionals and put together a list of major considerations for older taxpayers.
[In Pictures: the 10 Best Places to Retire in 2012]
Experts agree that for wealthy taxpayers, taking advantage of unusually generous estate tax exclusions tops the planning agenda. For 2011, the first $5 million of estate assets are exempt from taxes. This total effectively doubles to $10 million for a married couple. Because of a special "portability" rule, the first spouse to die can elect to transfer any unused estate tax exclusion to the surviving spouse.
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Estate Plans Reeling from 'Volatility Fatigue'
Tweet Share on Facebook November 18, 2011 Comment (3)Financial planners say their older clients with estate plans are, in a word, exhausted. After years of sudden swings in investment results and weakness in real estate markets, they are suffering from what one planning group calls "volatility fatigue." Toss in dramatic changes to estate taxes that could be changed on short notice, and it's no wonder that even affluent seniors are worn out in their efforts to conserve their wealth and figure out the best ways to convey it to their heirs.
[See Rising Senior Wealth Not True for All.]
"I think a lot of my investment clients are coming into my office feeling kind of exhausted," says financial planner Mark Boddy in Richmond, Va. "Every day, there seems to be a 1 or 2 percent gain or decrease in their investment portfolio."
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Family Caregiving Needs Likely to Soar
Tweet Share on Facebook November 16, 2011 Comment (1)Whether you are an older American or have parents or family members who are getting on in years, you need to be aware that the burdens of long-term caregiving will increasingly fall more heavily on families and friends. The financial and demographic forces behind this trend are so powerful that the shift to increased self-reliance is unavoidable.
[See Older Populations Soar as Age Trend Accelerates.]
Like other problems that have been hiding in plain sight for years, the factors behind this trend are not new:
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Looking at Aging with Fresh Eyes
Tweet Share on Facebook November 15, 2011 Comment (1)Remember the old saying, "You're only as old as you feel?" It needs to be replaced. Everyone, and I mean everyone, has some bad-feeling moments as they cross into their 60s, 70s, and 80s. No—the accurate catch-phrase for aging, particularly among active baby boomers, should be, "You're only as old as you act."
Kay Van Norman, an aging and wellness consultant (when she's not riding her horse in and around Bozeman, Mont.) remembers a couple of events in her life about 10 years ago that marked a branch in the road of her own development and attitude toward aging.
[In Pictures: the 10 Best Places to Retire in 2012]
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New Financial Standards for Reverse Mortgages
Tweet Share on Facebook November 14, 2011 Comment (5)Reverse mortgage lenders are beginning to require senior borrowers to qualify for loans by proving that they have enough money to continue paying property taxes, home insurance premiums, and other home upkeep expenses. MetLife is the first reverse-mortgage lender to implement a financial assessment requirement. Several other lenders say they are developing similar requirements, and the federal agency that insures reverse mortgage loans supports the companies' efforts.
[In Pictures: Best Places to Retire in 2012]
Reverse mortgages allow homeowners to tap the equity in their homes, receive money from lenders, and remain in their homes. They have not been heavily used by seniors to date. However, rising numbers of older Americans are approaching retirement, and virtually all studies show that their savings and investments will fall far short of their retirement needs. Using home equity is thus seen as increasingly likely for many seniors, particularly as depressed home values recover and support more attractive property appraisals.
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The Best Life
Philip Moeller, contributing editor for U.S. News Money, writes about achieving success and happiness in older age. He also is a research fellow at the Sloan Center on Aging & Work at Boston College.
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