Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Posts Tagged ‘retirement planning

Shop before you buy Medicare insurance

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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 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.


Written by Laura Rossman

August 16, 2010 at 2:47 pm

Baby boomer tips to their children on retirement

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 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!

Written by Laura Rossman

August 9, 2010 at 7:33 pm

Money or Meaning More Important in Retirement?

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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?

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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! 

Written by Laura Rossman

July 13, 2010 at 2:40 pm

Less Help from Employers with Retirement and Eldercare

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 Retirement planning, investment advice, elder care services – just three benefits that employers are cutting back on at just the time when more of us need them.

 It is a sign of the times…and economic reality.  Benefits increase costs and employers have just been through rounds of cost cutting. While cutting benefits has allowed more to keep their jobs, it has shifted where we look to for assistance.   

You are on your own more than ever.

A new survey from SHRM (the Society for Human Resource Management) says:  

  • Companies offering defined benefit (pensions) are down to 27%; 
  • On the other hand, companies offering defined contribution (401(k) plans is up to 92%; 39% offer retirement planning service (compared to 52% in 2006); 
  • 40% of companies offer individual investment advice (down from 48% in 2006); and 
  • 11% offer elder care referral services (down from 26% in 2006). 

For many baby boomers, the employer has been the source of assistance and resources on planning for retirement and family services –whether it’s childcare or eldercare.  Not anymore.  And while some of these benefits may come back, when economic conditions become more stable, it may not be in enough time to help. 

But, the good news is that there are resources available to help.  And there are services available if you have the money and willingness to pay for assistance.  Here are some suggestions: 

  • Check your 401(k) plan website.  There are usually very helpful tools to help you not only with investments but with overall financial planning. 
  • The government website is a great resource for all types of financial information  
  • can lead you to local elder care resources 
  •  For low-income seniors, from NCOA  can help identify what government provided or subsidized programs may be available. 
  • Health insurance company Humana just launched a subscription based caregiving support programs that provides access to information and services.
  •  A geriatric care manager can be a life saver if you are struggling with what services you need and how to get them.  This association can help you find local resources.

If you are lucky enough to still have these benefits available through your employer, make use of them!  If you don’t, there are plenty of free and for a fee resources available. Family and friends can be good resources.  And, just make sure if you hire someone, you check out their credentials carefully.

Is an Encore Career in Your Future?

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The more 60-somethings I talk with about retirement, the more I hear about staying engaged and encore careers.  While for some it’s a matter of money, many are looking for that experience that caps off a career — the one you can feel good about, that you made a difference.  While baby boomers will probably want to claim it as their own, I think people have been doing this for years — we just didn’t know what to call it.

With Father’s Day approaching I can’t help but think about my Dad – who retired young — and then didn’t quite know what to do with himself.  The idea of an encore career might have been just right for him.  I do know that watching him age without the definition of work makes me committed to continuing to work in some way as long as I’m able.

So if you’re thinking about an encore career, or simply want to find out more about it, there’s a webinar later this week you might want to tune into.

You can join Pulitzer Prize-winning journalist Anna Quindlen, best-selling author Daniel Gilbert (Stumbling to Happiness), and Civic Ventures CEO Marc Freedman (author of Encore: Finding Work That Matters in the Second Half of Life) in a discussion on all aspects of preparing for an encore career.  It is moderated by ABC’s Charles Gibson and sponsored by Merrill Lynch (I’m not affiliated in any way with Merrill Lynch).  The free, live event takes place during a webcast this Thursday, June 17, at 8 p.m. (ET).

Retirement planning tends to be a lot about money — how much do you need, how are you going to spend it, save  more of it etc.  But an equally important part is what are you going to do with your time and how will you stay engaged, if that’s what you want to do. An interesting panel, free, and in the comfort of your own home – sounds like a great way to gather more perspective on encore careers.

Written by Laura Rossman

June 15, 2010 at 1:59 pm

Lump sum or annuity: Is that the right retirement planning choice?

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Retirement Income Planning

Retirement income planning is tricky business.  You need to be able to see into the future, account for emergencies, gauge the future state of the economy and know what your investments/savings will be earning to generate income. In other words, you need a calculator and a crystal ball.

 With the baby boomer generation approaching retirement age, and more concern about how to make those dollars stretch a lifetime, there is increased interest in the choices people make with those retirement dollars.

 What role does your employer 401(k) plan have to provide you with  more options in making that money last a lifetime?

 That was the focus last week of a summit on retirement income last week sponsored by AARP, WISER and ASPPA.  A request for information from the government on the role of income annuities in retirement plans (Dept. of Labor and Treasury) has sparked a lot of comments (800+). 

There were a couple interesting ideas that cropped up during the day.  Maybe they’ll help you think through your retirement plan.   

Thinking differently about your number…that big bucket of money you need in retirement.  The one depicted in the TV commercials with the guy carrying his number over his shoulder.  Big numbers, however, can be deceiving.  It may not last as long as you think if you have to take out too much each year to supplement your expenses (planners suggest no more than 3% -4% per year) or it may not grow as fast as you planned if there’s a downturn in the market or a recession.  We all know now how fast that bucket of money can disappear with economic dips. 

So rather than focusing on the big number, figure out how much that generates for you every month and plan backwards.  Figure out what you’ll receive in Social Security (your yearly benefit statement will tell you or use the benefit estimator at, add in your pension and any other guaranteed income.  Then figure out how much you need to fill the gap, for how long and you’ll be able to determine how big that bucket needs to be.  Or how much you need to scale back your retirement plans or work longer.   

It’s a different view– and for some a more manageable way to look at how much you need in savings to live the lifestyle you want in retirement.  You’ll probably be seeing more tools from your 401(k) plan to help you figure this out. But this does require getting comfortable with what’s in your budget – a task many of us prefer to put off. 

Trial annuities. While annuities have their rightful place in retirement planning since they can guarantee income for as long as you live, their not a consumer favorite.  For many of us it’s hard to trade guarantees for the hope and possibility that our money can grow really big, making us rich in retirement. Because once you turn on an annuity (annuitize) there’s no turning back, and when it comes to money most of us like options.

Of course, the other side of that is what happens if you invest incorrectly. 

So there is some talk about figuring out how to create a “trial annuity” from your 401(k) plan.  A test drive of sorts – try it for say, two years, see how it works, how you feel about receiving a monthly check . Like it: then turn your savings into an annuity.  Don’t like it: go on with Plan B.  The devil is probably in the details, but a creative way of helping us better understand the value of guaranteed income for what could be a long life. 

Here’s one thing we know won’t happen – a return to defined benefit plans (fixed pensions).  Those days are gone.  It’s now up to us to figure out how to create our own pensions.

Written by Laura Rossman

May 26, 2010 at 8:18 pm