Adult children and aging parents: enable or safety in driving?

In a week of horrific front page news, it’s the story about an elderly couple who got lost driving home and froze to death that haunts me.

For anyone in the delicate balance of respecting the wishes of aging parents who want to keep driving and trying to make sure they are safe, the story captures our greatest fear.  We’ll miss a critical sign that can mean the difference between life and death..The headline reads:

Elderly Couple found Frozen To Death After Getting Lost During Drive

The daughter was quoted as saying: “We didn’t realize it was time to do more. We didn’t realize it was time. . . . Oh, the second-guessing that is running through our minds.”

They had taken precautions – gathering in places where the drive would be short and familiar; providing a cell phone; checking in to make sure they arrive — things many of us have done to help honor our parent’s wish to keep driving, at the same time hoping we are keeping them safe enough.

Maybe it’s just that I returned from driving my mother down to Florida — taking the 14 hour drive off her, but giving her the freedom to get around on her own there for the next few months.

I sometimes worry about becoming an enabler – that is, helping continue a routine that really needs to be altered in realistic response to aging issues.  When actually the discussion should be about how we adjust to a change and find new ways to accomplish the activities that keep us feeling independent.  There is so much fear wrapped up in the ability to no longer drive.

There are many resources available about the issue of aging and driving.  Some great websites about how to have the conversation and options available to help transition to a non-driver.  Here are a couple of those website if you are tackling the driving and aging issue.  I also find them helpful in beginning to think about how I want to handle this situation as I age.

Family conversations about driving from The Hartford

Older Drivers by AAA

Such a horrific story.   But  one that reminds us all that sometimes we have to push the balance between respect and safety even more than we’re comfortable with when it comes to aging parents and driving (among other issues).  My heart goes out to the family who tried so hard to find that right balance between respecting wishes and taking away the keys.  It’s so hard to know what’s right.

Social Security: No COLA Again?

Within the next few weeks the Social Security Administration will announce the fate of the cost-of-living-allowance for 2010.  The news doesn’t look good — for the second year in a row.

The decision for 2011 is based on the change in inflation between the third quarter of 2008 and the third quarter of 2010

 ”[There has been] an increase [in prices] relative to 2009, but it’s still below the 2008 level, so no COLA again,” said Donald Marron, a former director of the Congressional Budget Office told USA Today .

The decision will also impact many pensions that are tied to the Social security COLA decision.

While we surely haven’t seen the price increases to support a COLA increase, it sure doesn’t feel good.  Especially for those who are already retired and counted on those modest bumps for their living expenses.

For those still working, there’s some good news.  The same law also keeps the same cap on wages subject to Social Security for 2011.

Expect to hear more from Social Security by mid-October.

Get Ready to Help with Medicare Insurance Decisions

This is the time of year when people on Medicare prepare for open enrollment.  And you thought you were done with that when you left the workforce.  But, Medicare has an open enrollment period each year for Medicare beneficiaries who want to enroll or change Medicare Advantage and Medicare Part D plans.

 For many of us in the sandwich generation, it’s a time when we lend a hand to an aging parent or family member to figure out if they need to change plans – either for cost reasons or because their medical needs have changed.  It can be pretty confusing no matter what your age.  But it really is worth taking the time to compare plans and make sure you’ve got the right plan and the right price.

 The good news is that prices for Medicare Advantage and Medicare Part D plans won’t be changing much from 2010 to 2011. 

Plan prices will be about 1 percent lower, according to the Centers for Medicare & Medicaid Services. 

You may still have to shop for a new plan during open enrollment – if the plan has changed benefits, health care needs have changed or the plan is exiting the business. It’s also smart to check and make sure the plan you’ve got is still the right plan.  During this special period you can switch plans without having to worry about health conditions limiting your choices.  This period doesn’t apply to Medicare Supplement Plans.

 Those who have Medicare Advantage plans or Medicare Part D plans can change their plans during the Annual Enrollment Period (AEP) from Nov. 15 – Dec. 31. 

Longevity Alliance, a national insurance brokerage, is offering an AEP Reminder service.  You can sign up to receive an email when most of the 2011 plan information is available.  That way you won’t have to keep calling to find out about rates for 2011 and you won’t let it slip!  You can sign up for the free service by clicking here.

Rate and plan comparison tools are available at www.medicare.gov.  But the 2011 rates usually aren’t loaded into the system until mid-late October.  So keep checking back and make sure you are looking at 2011 rates. 

“Even with the lower costs, all beneficiaries should take time this Fall to compare their current health and drug plan coverage with what’s available and best meets their needs for next year,” said Jonathan Blum, deputy administrator and director of CMS’ Center for Medicare.  “Medicare will continue to provide a wide-range of consumer tools to help beneficiaries make the best possible choice of coverage.”  

Rates and benefits for specific 2011 plans are generally released between Oct. 15 and Nov. 1.  The government rules say you can’t buy a plan until Nov. 15, but you can start shopping and comparing rates so you don’t end up in a last-minute rush.  And you’ve got to shop to save and/or make sure you’ve got the right plan for your current medical needs.

 Don’t wait too long. The companies handling this business get very busy.  You’ll get more attention and assistance, if you need it, if you look early in November and apply as soon as you can – November 15.  And make sure you compare plans and fully understand the co-pays and network limits since a low-cost premium may just shift costs  and you’ll find you’re paying more at the doctor and the pharmacy.

Preparing for the Medicare Shopping Season

Medicare Part D Covers Prescription Drugs

 

Medicare Part D Prescription Drug plans will cost about the same in 2011 as they did in 2010 according to information released yesterday by CMS (Centers for Medicare and Medicaid Services).   

Good news for Medicare beneficiaries.  And good news for sandwich generation adult children who assist senior family members or aging parents with making Medicare plan selections. Maybe fewer will face the confusion of changing plans.   

But don’t assume the 2010 plan is still the best plan for your health care needs.  You’ll still want to shop and compare plans – and watch out for changes in the co-pays that can boost out-of-pocket expenses.     

This announcement marks the start of the Medicare shopping season also known as Annual Enrollment Period (AEP).  Medicare beneficiaries can change Part D and Medicare Advantage plans only from Nov. 15 – Dec. 31 for plans effective in 2011.  You can’t do much with the information yet.  But come mid-October there will be specific plan information available on the government website so you’ll be able to compare you current plan with 2011 plans.  

Here’s the schedule leading up to AEP:   

September –Information about premium and benefits for each Part D and Medicare Advantage plan  

October – More detailed plan information is available so that you can begin comparing plans  

Nov. 15- Dec. 31 – applications for plans effective in 2011 can be accepted  

 Here’s the statement from Medicare on part D premiums for 2011.   

 “Most Medicare prescription drug plan premiums should remain relatively stable next year, and all beneficiaries should compare their coverage under their current plan with the plans that will be offered in 2011 when that information becomes available in October,” said Jonathan Blum, deputy administrator of CMS’ Center for Medicare. “The Affordable Care Act improves the value of drug coverage people with Medicare will receive next year, providing discounts on brand name drugs and coverage of generics in the coverage gap, or donut hole.”

Shop before you buy Medicare insurance

If you’re getting ready to sign up for Medicare, there’s a great 3-part series of questions and answers at the New York Time blog “Bucks.” 

Even if you are already a Medicare beneficiary, you’ll find helpful information about new benefits next year and some guidance on the different types of Medicare insurance plans. 

The Medicare Rights Center is the expert behind the answers.  The topics cover the basics to some very specific questions about benefits and coverage for the disabled.

 If you have a Medicare Advantage plan or Medicare part D or think you might want to switch to one of these plans, the Medicare Annual Enrollment Period ( the AEP) is Nov. 15 – Dec. 31, 2010 for policies that will be effective in 2011. 

For most of those with Medicare Advantage plans and Medicare Part D plans this is the one time of the year when you can change your coverage (there are some exceptions). 

Comparing your current Medicare plan to other plans may be especially important this year as changes in prices and benefits are expected. 

Plan information and prices for policies effective in 2011 aren’t available yet.  You’ll have to wait until October.  

But it’s not too early to start reading up on the ins and outs of Medicare. 

If you’re new to Medicare, and must purchase your own plan (no retiree insurance), you may find the cost of insurance is more than you anticipated.   

Here’s what Jennie Phillips at Bankrate.com found when her husband turned 65:

“You add all this up and it comes to a minimum of  $257.50 per month or $515 for a couple. It is easy to go much higher if you want plans that offer more bells and whistles. That’s about $100 more per month than we contribute to our current health plan offered through my husband’s employer, including vision and dental insurance, which Medicare doesn’t offer.”  Read the rest of the story here

More evidence that it’s really important to research and find the right plan but also make sure you shop for Medicare insurance.  Don’t look at just one company.  Compare prices of at least 3 companies to make sure you get the right plan and don’t pay too much.

 Unlike your days as an employee where you could choose levels of coverage, but there was only one company offered, you do have a choice.  Make the most of it to get the best plan and price.

When Your Long-term Care Insurance Rates Rise

Over the past several months, many long-term care insurance policy holders have received unwanted news from their LTC insurance company:  your rate is going up.

There are a number of reasons prices on policies issued years ago are going up now.  The current low-interest rate environment; more people are holding onto their policies rather than lapsing (stop paying); and people are living longer so more are expected to use their benefits than originally projected. 

But raising rates?  Can they do that?  You probably don’t remember it, but your policy includes language that the rate can be increased in the future.  And many companies have held off on increases.  But to maintain a financially stable program, the rates have to support potential claims.  Those insurance through the Federal government employees long-term care insurance program found that out last year when some rates increased as much as 25%.

It’s also important to recognize that the increase does not reflect anything about you as an individual.  When companies make these changes they do so for an entire class of policy owners, i.e. people who bought a certain policy during a certain period of time.  So you aren’t being singled out. 

You’ll receive a letter from the insurance company telling you when the rate is going to increase and the options you have if you don’t’ want to pay more.  

So, what are your options?  

Cancelling should be the last resort.  Unless you have a provision in your contract that lets you stop the policy and receive the benefits you’ve accrued to date, you will lose all the money you have paid in for the insurance.  Work with the insurer to find a benefit level that you can afford. 

Buying a new policy at a lower cost usually isn’t an option.  LTC insurance is priced by the age at the time you apply – the older you are, the more it costs.  So switching probably won’t save you money if you’ve had your policy more than a few years. 

If you are happy with the policy and you can afford the rate increase that solves the problem. 

But, if you can’t afford the increase, you can change the benefits.  The letter will outline what you can change and the impact it will have on your price. 

A good place to start can be the additional “riders” you purchased.  See if they are still as important to you as they were when you bought the policy.  Be careful about cutting inflation protection if you have it (the percentage at which the daily benefit increases each year — for example, 5% compound growth.  That’s what keeps your pool of money growing to keep pace with the costs of care when you need it in the future. 

Then take a look at the core benefits: daily benefit, policy years, and elimination period (deductible).  Your agent or the company can help you work through the tradeoffs.  Ask about the average costs of care in your area.  That can help you determine how far your coverage will go.

For those in the sandwich generation, if your parent is finding it difficult to pay the higher amount you might want to consider chipping in and paying the difference.  Continuing the level of coverage may be a huge financial relief in the future for all of you.

Don’t wait until the last minute to make the decision.  Give yourself time to review and consider the financial tradeoffs.

Baby boomer tips to their children on retirement

 There was generally good news about the state of Medicare and Social Security last week when the trustees released their 2010 Annual Report.  Good news for  baby boomers.  Not so good for the generations following us.

 Medicare is looking much healthier, thanks to the changes in the health care reform bill that reduces costs for prescription drugs and physician services..  The Hospital Insurance trust fund is expected to remain solvent an additional 12 years – until 2029.  While Medicare finances have improved, further reforms will be needed. 

Social security isn’t sitting quite so pretty, but there’s no reason for alarm.  The recession’s combination of fewer workers and more early retirees means that Social Security expenditures are expected to exceed tax receipts in 2010 for the first time since 1983.

 “The fact that the costs for the program will likely exceed tax revenue this year is not a cause for panic but it does send a strong message that it’s time for us to make the tough choices that we know we need to make,”  said Michael J. Astrue, Commissioner of Social Security. 

The report said that the deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.   But as the baby boomers begin retiring in larger numbers in 2014 the number of beneficiaries grows substantially more rapidly than the number of covered workers.

So we’re beginning to hear a lot more –from both political parties – about the need to tackle the issue of retirement age. It’s unlikely that it will impact the benefits of baby boomers – most of whom will reach full retirement at age 66.

But for those younger, the role of Social Security is likely to change as is the nature of retirement planning and work.

It’s a very difficult environment for people who are good planners when it comes to their finances. 

The best advice baby boomers can give their children: count on long and varied careers.  Keep funding that 401(k) plan as much as you can.

 Learn from our mistakes : plan better; rely on your own savings; live within your means (that one’s from your grandparents) and find work you enjoy

You’re going to be counting on your own resources more than your parents or grandparents!

Money or Meaning More Important in Retirement?

Young and old agree that meaning trumps money when it comes to leading the “good life.”

I get a lot of research across my desk that spells gloom and doom for future retirement prospects based primarily on the lack of adequate financial resources. True, retirement savings is pretty dismal for much of the population, though savings have picked up in the past two years.

 But this new research from MetLife Mature Market Institute paints a very different and hopeful picture of the future. 

The conclusion:  the recession has had a noticeable impact on people’s live, particularly in the financial areas.  But when it comes to meaning and purpose, the negative impact has been relatively modest. 

And as we move into retirement years, it is meaning and purpose that are prominent in defining “living the good life.” 

Meaning, closely associated with the importance of family and friends, remains the primary component of the Good Life for all age groups, despite instability in financial and other aspects of their life.  People plan to spend time with family and friends above all else, regardless of age. 

The study, done with Richard Leider, emphasizes that the people who achieve “living the good life” are those who focus and plan.  That gives them the resiliency to cope with negative “trigger” events –think recession, job loss –whatever their life stage or circumstances. 

The 45-74 year-olds in the studies who maintained a steady perspective on their “vision for the future and the “focus” on the ways to get there were able to weather the storm. 

The younger generations, maybe because things have been so financially challenging for them early on in their professional lives, hold very similar views about the importance of meaning and purpose in life.  Maybe the baby boomers have raised a thoughtful, less consumption focused generation than their own.

More food for thought from Leider: 

“The longevity revolution demands a new mindset and skills, not to mention courage.  As life expectancy continues to increase, Money, Medicine, Meaning and Place will become even more significant and challenging.  Yet those challenges can also be positive because they can lead to new points of view and knowledge essential to succeed in the future.” 

Or said another way – aging isn’t for sissies.

What Does 70 Look Like?

Facts on Turning 70

There’s a great article in the NY Times on what it means to be in your 70s.  What should you look like?  What should you do?  What are society’s expectations?  After all average life expectancy is 78 years old. 

 Ringo turned 70.  Other celebrities in the 70+ club are Chuck Norris, Al Pacino, Alex Trebeck and Raquel Welch.  

Funny, it wasn’t that long ago when turning 50 was the watershed birthday.  Seems so young now! 

The 70s are interesting because it has traditionally been seen as a time of slowing down.  Yet more people are working into their 70s. Or staying active travelling, volunteering and socializing. 

At the same time, we can all think of someone in their 70s who suffers whose life is a bit different because of health or financial limitations. 

 It’s Interesting food for thought whether you’re planning your own later years or helping family or friends with theirs.  

 My take away:  Money matters—but health matters more. 

 Second take-away: Expectations of what’s right at 70 should be your own.  Good financial planning gives you options.

 Third take away:  Last quote in the article about being 90! 

Baby Boomers: Leave Your Kids Alone

 A 24-year-old turning down a $40,000 job for fear it will short-circuit his future.  Really?  That’s the story on the front page of the NYTimes.  It’s been bugging me ever since I read it. 

Here’s why. 

* We all make choices about jobs.  Don’t understand his, especially in this market, but you gotta do what you gotta do. He will learn.  But let’s not paint a whole generation of young people with the same brush.  I think Generation Y is pretty savvy and display some of the same attitudes and values about work and money as their grandparents – not their baby boomer parents. 

* What are Mom and Dad thinking? I’m big on letting young adults find their own path and make their own decisions.  But supporting them fully financially – so they have no incentive to move forward – doesn’t help them – or their parents.  Many Baby boomers seem to be excelling at trying to live their children’s lives.  Let him make his choice,  But also let him live with the financial ramifications of that decision.

 * The article headline – American Dream is Elusive for a New Generation.  Every bit of research I’ve seen on Generation Y and the future of work and retirement says that expectations are different.  This is a generation that knows that they will have many different jobs and probably careers.  Traditional career ladders don’t exist.  You move up, across, down, up – whichever way takes you to the next opportunity. Theirs is a different dream.

 I wish Scott Nicholson well in figuring out his career path.  At the same time I hope that his baby boomer parents start letting him feel the financial consequences of his decisions.  

 We may think that by providing full  financial support to our adult children we’re helping them.  We’re not.