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Health Reform, Now Real, Is Just Around the Corner
Tweet Share on Facebook November 9, 2012 CommentFollowing President Obama's reelection, it's once again "game on" for health reform. By Jan. 1, 2014, as many as 30 million currently uninsured people will be able to purchase health insurance. A massive system of government insurance subsidies needs to be built, and embedded into the business practices of thousands of insurers, hospitals, doctors, and other healthcare providers.
Other far-reaching changes in the law include disallowing the denial of insurance coverage to those with a pre-existing health conditions. People with such conditions, including many older consumers, will be protected from paying punitive premiums for their coverage. Lifetime caps for insurance payments are already illegal under the law. Annual coverage limits are being phased out and will be gone by 2014.
Employer insurance rules face enormous changes. Some smaller employers won't need to offer health coverage. Larger businesses can opt out of their coverage responsibilities by paying penalties. Some companies have already begun shifting work from full- to part-time employees to reduce their exposure to the new law and its possible costs.
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$5 Trillion Price Tag for Public Pensions
Tweet Share on Facebook November 8, 2012 CommentAs strapped state and local governments scramble for ways to balance their budgets, it's become very clear that it will be impossible for many to honor their pension promises to new employees and even current retirees. According to a recent economic study, the cost to fully fund these promises would cost taxpayers $5 trillion over a 30-year period, or nearly $1,400 a year in higher state and local taxes and fees for every household in the country.
Put another way, contributions to pay for public employees' retirement benefits now total 5.7 percent a year of all state and local taxes, fees, and other government charges. "Government contributions to state and local pension systems must rise to 14.1 percent" to produce fully funded pension systems, the study said, and it will take 30 years to get there.
[In Pictures: 10 Signs American Families Are Falling Behind.]
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Senior Entrepreneurs Find Senior Care a Great Fit
Tweet Share on Facebook November 7, 2012 CommentRay Corkran bought an existing Home Instead senior-care franchise in Houston nearly 18 months ago as he was approaching his 60th birthday. With 20 years of experience owning fast-food franchises, Corkran knew the business metrics of what it took to be successful. But in plunking down roughly half a million dollars for a venture that was already established, he was making an investment that went well beyond dollars.
Corkran's mother died when she was 72, and he's convinced she would have lived much longer if she had received better care at home. "My mom was ill and I lived about five minutes from her. I thought she was being well taken care of by my dad," he recalls. "But it turns out he just wasn't a caregiver. He didn't know what to do." Corkran's mom became so ill she was hospitalized and contracted a staph infection there that she was too weak to overcome, he says.
"How can an upper-middle-class family find themselves in a situation where someone gets neglected by a spouse and a son who lives five minutes away?" he asks. Corkran says he doesn't fault his dad, who is still alive at the age of 85. "He is a good man. He did the best he could."
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10 Common Money Problems That Need Fixing Now
Tweet Share on Facebook November 5, 2012 CommentIn an era of increasingly sophisticated financial transactions, many consumers are falling further and further behind in understanding how to use such products. The result is tremendous friction between consumers and product providers. Product sales fall far short of their potential. Consumer suspicion and distrust become the dominant features of the buyer-seller relationship. And government, when it steps in to provide yet another layer of regulation, is often out of touch with consumer needs.
Here are 10 consumer money matters that need attention in Washington and elsewhere:
1. 401(k)s. Retirement investment companies constantly reassure us that their defined-contribution accounts are successful, or would be if consumers set aside sufficient funds for retirement. Of course, they fund these commercial messages and voluminous studies with the enormous fees they earn by "managing" retirement accounts, often with mediocre results. Is there any doubt we need new ideas to achieve better retirement outcomes?
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6 Things Aging Parents Can Do for Their Children
Tweet Share on Facebook November 2, 2012 CommentThere is no shortage of reports and studies about things adult children can do to help their aging parents. As an aging parent, let me be among those applauding the prospect that my progeny may someday help me out should I need it and they can afford it.
But with apologies to what appears to be prevailing sentiment, the more likely scenario has these roles reversed. How will aging parents be taking care of their kids and grandchildren? For the most part, older Americans are the ones with the assets. Even in the best of times, younger people are struggling with careers, family needs, and any number of financial pressures. And these have not been, to say the least, the best of times.
One of the bedrock pieces of generational financial advice is that a parent in or nearing retirement should not liquidate retirement assets to provide money to help a child. The parent has very little, if any, time to make up for the loss of that asset. The child likely has several decades. It's good advice. I ignore it regularly. Why? Because my kids need help and, my wife and I agree, what better use could there be for our money than helping our children?
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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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