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Six Pillars of Solid Retirement Communities
Tweet Share on Facebook May 14, 2009 Comment (175)John Erickson has the conviction of success. More than 22.000 people live in his 20 retirement communities in 11 states. He opened the first outside of Baltimore in 1983, at a time when large, apartment-oriented facilities were considered unappealing by many experts. Today, Erickson Retirement Communities has grown into one of largest Continuing Care and Retirement Community (CCRC) operators, and is widely considered at the top of the industry in quality and consumer appeal. Erickson himself has reached traditional retirement age but clearly has no interest in slowing down.
Erickson's facilities are big but broken down into multiple clubhouses, low-rise apartment buildings and interconnected facilities that permit residents to walk the entire complex without going outside. As with other CCRCs, residents have a continuum of living and care options depending on their physical conditions and medical needs. The most common purchasers are healthy couples in their mid-to-late 70s who move into independent living apartments and continue to keep their cars. Over time, they likely will need increasing amounts of medical care and can find assisted-living and more advanced nursing care within their community. Most expenses are covered with a single monthly payment and the initial purchase price of the apartment is refundable to the buyers or their heirs. -
Social Security, Medicare Busts Move Closer
Tweet Share on Facebook May 12, 2009 Comment (138)The annual hair shirt report of Social Security trustees was released on Tuesday. To no one's surprise, our national retirement and health benefit programs are headed for perdition even more quickly than they were last year. Due to the recession, the effective bankruptcy date is 2037 for what's technically called the Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds. That's four years earlier than the forecast in last year's report -- no mean feat in only one year. Program expenses exceed revenues beginning in 2016 -- that's only seven years away, folks -- and all assets are exhausted 21 years later.
And this, sadly, was the good news. -
Unforgettable TV: HBO's Alzheimer's Project
Tweet Share on Facebook May 12, 2009 Comment (27)HBO launched its ambitious documentary, The Alzheimer's Project, on Mother's Day. The series is being aired on four consecutive evenings. If you don't subscribe to HBO you can view the programs at the HBO web site, along with a lot of background and educational materials.
Alzheimer's is a tough disease, on all levels. The often lengthy process of seeing a loved one's personality and memories literally disappearing before your eyes is upsetting to everyone and devastating to some. It's not the kind of thing you want to bring out of the closet and examine. And when you do, it's not the kind of thing you want to keep out in the open. The emotions are too raw, too painful. -
Need a Personal Stimulus Program? Travel!
Tweet Share on Facebook May 11, 2009 Comment (5)The banks have had their stress tests, and it looks like they'll get the relief the need. What about the rest of us? Haven't we been pretty stressed as well? The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, explores some great online discount travel resources that will help you take that well-deserved break.
Q. I'm on a budget but still need to rejuvenate with time away from my everyday routine. Looking for affordable vacation ideas, good deals, discount Web sites, etc. Especially interested in southern states and the Atlantic coast, but if I find out about a great deal to Europe or the Caribbean, I'd go for it. Can you help me?
A. Cruises are a great deal right now. I live in Miami, so I don't have to fly to get to the ship. Tripology.com can help you find a great cruise, or any other kind of trip, at a great price. You choose the destination and the services you want. You can also define a special occasion and price range. Once you fill out the trip request, Tripology contacts travel specialists who have expertise in the type of trip you want (in my case, cruises). They each put together a customized itinerary and contact you with the options. Because they are competing for your business, they will work hard to come up with the best trip in your price range.
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4 Myths About Target-Date Funds
Tweet Share on Facebook May 8, 2009 Comment (35)It turns out that target-date funds, which are designed to be a simple, hands-off solution for investors, are widely misunderstood. Investors often mistakenly think these mutual funds provide guaranteed returns that begin at age 65, researchers have found. Even after the funds' purpose and methods were explained in an online research project, participants continued to associate the funds with Social Security-like guarantees that carry little or no investment risk.
Target-date funds have become popular default investment choices inside employer retirement programs. They are designed to automatically shift their investment holdings out of stocks to bonds to meet the increasingly conservative goals of people as they age and move into retirement. Yet the funds carry substantial investment risks. Even funds designed for people retiring next year, for example, include large percentages of stocks. That's because they are designed to support retirement plans, or glide paths, that extend 20 or 30 years into the future.
The consumer-reality disconnect is important. When 2010 target date funds—designed for people turning 65 next year—lost 25 percent of their value in 2008, outraged investors triggered a wave of sharp criticism of 401(k) retirement plans in general. (These funds posted their sixth consecutive quarterly loss in the first quarter of this year.) Legislation has been introduced to change the way the plans operate and subject mutual funds to more regulation, particularly in broadening their reporting of the fees they charge.
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It's Time for Some Life Planning
Tweet Share on Facebook May 7, 2009 Comment (24)If you need guidance figuring out the next steps in your life -- and who doesn't these days -- a new workbook and DVD from MetLife could be very helpful. Developed by the insurer's Mature Market Institute in partnership with life coach and author Richard Lieder, Your Guide to the Good Life is a straightforward but not simplistic tool to get you thinking -- and acting -- about the important stuff in life.
There are four components in the workbook's formula for the Good Life -- living in the place you belong, with the people you love, doing the right work and having a sense of purpose in what you do. -
New Health Account from TIAA-CREF
Tweet Share on Facebook May 6, 2009 Comment (15)
TIAA-CREF, the big retirement firm for educational, health, research, and other organizations, is rolling out a new retirement investment account for healthcare expenses. By setting up what's called a VEBA (voluntary employees beneficiary association), TIAA wants to help people use the same tools employed in tax-advantaged retirement accounts to fund their future medical expenses. Current surveys put lifetime retiree health expenses -- excluding what's covered by Medicare and other programs -- at upwards of $250,000, and climbing.
"We've been hearing over the last 5 and 10 years the increasing importance of continuing coverage of healthcare benefits," says Doug Chittenden, the organization's vice president of institutional product management. "In the markets we serve," he notes, "people often accept a trade-off of salary versus benefits," and the new program provides an efficient way to do that. -
New Tool to Compare Long Term Care Costs
Tweet Share on Facebook May 5, 2009 Comment (85)Each year, MetLife and Genworth Financial issue extensive surveys of long term care costs, supporting each franchise's substantial long term care insurance business. The predictable results: long term care continues to get more expensive. This, of course, has scary implications about how we will pay for in-home care providers and the extended stays in nursing homes and assisted-living facilities that are part of our demographic destiny as the nation's longest-living generation.
MetLife has two studies, both issued last fall, that cover nursing homes and assisted living costs and adult day services and home care costs. Genworth's inclusive 2009 study of these costs was released at the end of April. These studies are well worth your time if you're wrestling with long term care decisions.
Genworth also has provided a valuable service by making an interactive version of its survey available. By using this tool, you can compare up to four urban areas at a time. The tool generates side-by-side comparisons that are easy to understand. It also provides a predictive guide to future costs. Using the results of current and past-year surveys, Genworth has developed trends to predict what care costs will be like in 5, 10, 15, or 20 years. Small differences among two cities can grow very large after 20 years. -
Know the Tax Rules for Charitable Donations
Tweet Share on Facebook May 4, 2009 Comment (6)The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, deals this week with how to correctly manage tax deductions for donations.
Q. This year donation of items to charities is way up. This has been a great boost to people who really need our help, and it's also a good way to reduce your taxes through deductions. If you are making donations to charities, I'd like to know what your experiences have been and how you are ensuring you will be able to take the deduction.
A. Household items and clothing must be in good used condition or better in order for you to get a deduction. However, if you donate a single item worth over $500 you can claim a deduction, no matter its condition, but you have to submit an appraisal from a qualified appraiser. You can deduct furniture, furnishings, electronics, appliances, linens. Generally you can only get the fair market value for the items, basically what they will sell for at a thrift shop, like the Salvation Army. Special rules apply to donating cars, food, art objects, jewelry, furs and collections.
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Is Longevity Insurance Right for You?
Tweet Share on Facebook May 1, 2009 Comment (5)With life expectancies on the rise, millions of people are now facing the challenge of how to support themselves into their 80s, 90s, and even beyond. Longevity insurance is one possible solution. That's the descriptive name for a specialized annuity designed to begin making lifetime income payments to recipients at a trigger date of their choosing.
Age 85 appears to be the most common start date for these annuities, but the date can be tailored by the recipient at the time of purchase. Usually, the type of annuity used for this protection is called a single-premium deferred annuity (SPDA), meaning the annuity is purchased with a single payment, and the date payments begin is deferred to a future time. "It's a very interesting alternative to a traditional annuity," says Anna M. Rappaport, a consulting actuary and chair of the Society of Actuaries' Committee on Post-Retirement Needs and Risks. She notes that devoting a portion of your existing nest egg to such a product will reduce your investment portfolio, and thus your income during the earlier years of your retirement. But this may be more than offset by the income you can earn in your post-85 years. Plus, you'll be certain that you can spend down your portfolio by the time you turn 85 and not worry about outliving your income.
