Surviving the ‘sandwich’ generation
Many baby boomers are feeling the crunch from both their adult children and aging parents. What can boomers do so they aren’t squeezed dry financially?

It’s hard enough to pay your bills and save for retirement, especially during an economic downturn. But it’s even tougher when you have to juggle responsibilities, providing for your own financial needs and lending a helping hand to your elderly parents or grown children — or both.

Nearly half of Americans 55 and older say they expect to provide support for aging relatives and adult children, according to the Retirement Re-Set study by SunAmerica Financial Group and Age Wave, a research group that tracks the financial and cultural impact of the graying of America. “Family assistance has become the new retirement wild card,” says Age Wave founder Ken Dychtwald.

A sour economy has exacerbated the squeeze on the “sandwich generation.” Seniors are struggling to cope with rising medical and long-term-care expenses just as their investment portfolios and home values are shrinking, and their middle-aged children sometimes need to pitch in. Those same children, who breathed a sigh of relief when the college tuition bills for their own offspring finally ended, may also be fielding requests for help from the kids — or even a boomerang brood on their doorstep.

Continue reading from money.msn.com…

What does it mean for you as you plan for retirement income? It means that Washington State is encouraging you to plan for retirement health care early.  And if your PRIVATE insurance solution is too small for the health-care crisis, then the STATE solution will allow you to keep more of their assets should you require WA State Medicaid in a major crisis.  This allows for the PRIVATE insurance solutions to be built more affordably for more people.

Would you like to know more about how you might be surprised at the quality and affordability?  Call me!  Let’s chat for a few minutes on how you could advise your clients to protect more affordably.

Click HERE for more information on what the WA State regulations are.

3 Ways Low Interest Rates Hurt Seniors

The Federal Reserve Board has not formally relaxed its intention to keep interest rates low through the end of 2014. And there is little new to say about the way non-existent interest rates on savings accounts, certificates of deposit, and U.S. Treasury securities have hurt all savers, particularly risk-averse investors.

Retirees are, of course, the poster children for risk-adverse investments, and their nest eggs have been hammered by the Fed’s policy. The Fed has said that low rates help the economic recovery. So it argues, in effect, that investors should enjoy the solid stock market returns and that savers should display a stiff upper lip.

Perhaps the Fed policy carries a price that we all must pay. But 15 of 19 large financial institutions just passed their latest financial stress test. Do they still need free money from the Fed to see them through? Corporations are already sitting on enormous piles of cash. Do low interest rates play a material role in their current thinking about raising funds to expand their businesses and hire more people?

Meanwhile, insurers and other providers of financial products have been twisting in the wind because of the Fed’s policy. In ways that often aren’t that visible to ordinary consumers, they have been forced to change their products and services. Older consumers and retirees have been particularly hurt by these changes.

Long-term care insurance. According to the American Association for Long-Term Care Insurance, rates on new policies are 6 to 17 percent higher than a year ago. The culprit? Low interest rates. “Insurance prices have increased as a result of the historic low interest rates and yields on fixed income investments,” says association executive director Jesse Stone.

Many long-term care policies are purchased by people in their 50s and 60s. Typically, claims aren’t made against these policies for 20 or more years. During that time, insurers invest premiums in safe investments whose yields are tied to prevailing interest rates. With rates so low today, insurers can’t earn very much on their premium reserves and thus feel they must charge higher rates to new customers.

Continue reading from usnews.com…

It will give many folks the ability to purchase AFFORDABLE long-term policies, knowing they have the State’s Partnership guidelines backing them up.

When clients purchase an individual long-term care insurance policy that meets WA state’s partnership guidelines, they will be allowed to protect a portion of their assets they might otherwise have to “spend down” in order to meet Medicaid eligibility requirements. This allows your clients to protect one dollar of personal assets for each dollar their long-term care insurance policy pays in benefits. For example, if a client purchases a long-term care insurance policy that pays $100,000 in benefits, and they utilize a $100,000 benefit amount, they will be allowed to protect $100,000 in personal assets.

The technical details a can be found here: http://www.dshs.wa.gov/manuals/eaz/sections/LongTermCare/LTCPartnershipMainPage.shtml

As an alternative, I’m happy to show how this new law enables a LTC plan to become affordable and incorporate into the rest of your retirement strategy, giving you choices, flexibility, and security when care is needed. Contact me today at 509-392-4366 to learn more about insurance programs available in the Washington areas of Kennewick, Richland, Pasco, Yakima, Benton County and Franklin County.

Living to 100? That Will Be $3.5M
The average centenarian will spend more than he or she may expect in their later years. Here’s where it goes.

Here’s to your long life — and the heaps of cash it will require.

The average American who lives to the ripe old age of 100 will spend $3.5 million in his or her lifetime, according to an analysis of data from the Bureau of Labor Statistics. A good chunk of that bill, more than $1.5 million, will have been racked by your 50th birthday. The next 30 or so years — the average 50-year-old today can expect to live until 81 — will run another $1.4 million. And the lucky few who make it to 100 will need an additional $630,000. Experts say these high costs of living often come as a shock to retirees, many of whom expect to dramatically cut back on their living expenses as they get older and stick to a fixed budget. “A lot of time people actually end up spending more money in retirement than they may have spent when they were working,” says Heidi Schmidt, a wealth manager in Dallas with USAA.

Just where that money goes depends largely on your decade. Most people in their 60s spend a lot of their savings on entertainment — finally buying that sail boat or splurging on trips to the Caribbean. Those in their 80s, on the other hand, typically swap a good portion of their leisure budget for medical bills.

Of course, not all expenses come down to age, experts say. A healthy octogenarian with wanderlust might have spending habits more in line with people twenty or thirty years younger. And certainly many Americans will spend much less in retirement — either through careful planning, a good bit of luck or both. Whatever the retirement goals, here’s a breakdown of how spending tends to vary through the retirement years.

Continue reading from www.smartmoney.com…

The decision to purchase long-term care insurance can be a difficult one. Determining when the time to buy is right can be critical. If you wait too long, existing medical problems may exclude you. Protecting your assets, as well as your choice of care when the time comes is vital. Learn more about long-term care insurance options available in the Washington areas of Kennewick, Richland, Pasco, Yakima and other surrounding areas at http://simplyltcbenefits.com.

Should You Buy Long-Term Care Insurance?
Factors to consider when examining your options for long-term medical care

As life expectancy increases, so do the costs associated with aging, especially when seniors need help with daily tasks like dressing or eating. A 2011 MetLife survey shows that the national average cost for a home health aide was $21,840 annually, while a private room in a nursing home cost $87,235 per year in 2011.

According to Department of Health and Human Services, close to 70 percent of people over age 65 need long-term care, which can include care in a nursing home or assisted living facility, or home health aides to assist with daily activities like bathing or meal preparation.

For low-income individuals, Medicaid covers costs such as nursing home care in a Medicaid-approved facility. But those who have sizable assets would need to transfer assets or spend them down before qualifying for Medicaid.

Medicare covers certain medical needs, but not day-to-day activities like dressing, bathing, or using the bathroom. “There are very few pieces of long-term care that involve medical treatment,” explains Steven Weisbart, senior vice president and chief economist for the Insurance Information Institute, a nonprofit consumer education organization. “If you need help taking your medicine, Medicare would tend to pay for that sort of thing. But helping you take a shower in the morning? That’s not a medical activity.”

If your life insurance policy offers an accelerated death benefit, that would allow you to use some of your life insurance money while you’re still alive to cover long-term care costs. Long-term care insurance is another way to cover those costs, and it’s especially appealing to those with assets they want to protect instead of spending them down to qualify for Medicaid. “In essence, you’re insuring your bequest to your heirs,” says Gerard Wedig, healthcare economist and associate professor of business administration at the Simon School of Business at the University of Rochester.

In fact, the only people who should be buying long-term care insurance are those with assets over $50,000, according to Sandy Praeger, Kansas insurance commissioner and chair of the National Association of Insurance Commissioner (NAIC)’s Health Insurance and Managed Care Committee. “If you have assets below $50,000, you’ll spend those assets down rather quickly,” she explains.

In addition to protecting assets, long-term care insurance affords more choice about whether you move into a nursing home or assisted living facility or stay at home. Long-term care policies can cover home care, while Medicaid generally does not.

Continue reading from http://money.usnews.com…

10 Things Medicare Won’t Tell You
The government’s massive entitlement program is full of costly glitches.

7. “We don’t cover a lot of the care seniors need most.”

If your aging mother needs full-time care in a nursing home or a significant amount of home health care, she will have to meet some strict criteria to make it happen. For the most part, Medicare doesn’t pay for nursing home care except for people who were hospitalized for at least three days within the previous 30 days and require “skilled” care, which is care that only a medical professional like a registered nurse could provide. Even then, it only covers up to 100 days per benefit period.

Qualifying to get reimbursement for home health care is also difficult, as you must meet all of following criteria: Be homebound (which means that a doctor has advised you not to leave home due to your condition, that leaving home takes considerable effort or you need help like special transportation to leave home); require skilled nursing care, physical therapy, speech-language pathology services or continued occupation therapy; and be getting regular services from your doctor under a plan of care that he or she has ordered. Medicare does not cover meals delivered to a home, cleaning and laundry services or, in most cases, personal care like help bathing, dressing and using the bathroom. “A lot of people don’t realize it but these kinds of care are very limited,” says Muralidharan. A spokesperson for CMS notes that the organization wants to engage with members of Congress, aging/disabled community members and experts to “explore solutions to the nation’s long term care needs.”

This gap in Medicare coverage can be financially devastating for many families. The average nursing home, for example, costs about $77,000 per year, according to a study by the MetLife Mature Market Institute. Home health care is also expensive, with rates ranging from about $17 to almost $30 per hour, according to the American Association for Long-Term Care Insurance, significantly more for a trained nurse or therapist.

Read more from www.smartmoney.com…

So why not take on some of the risk and pay for 20-40% of our extended care costs should we need it, and let the insurance company pick up the majority?

Yet today, as SMART Money has described, many are failing to take any insurance to protect themselves after getting “sticker-shocked” at the premiums that are covering them 100%!

We don’t expect our health insurance to cover 100%, yet we still cover that risk for the hospital, testing, docters, etc.  Yet somehow we expect our Long-Term Care insurance to pay 100% and don’t like the premium that comes out.

As I have spoken to many care facilities locally in the Tri-Cities, having some LTC insurance is better than none, when extended care is crucial.  The facilities seem to agree that they can begin to work a plan of care for the family member when there is a LTC policy to make a claim on.

Read More from Long-Term-Care Insurance is Better Than None at smartmoney.com.

For Long-Term-Care Insurance in Eastern Washington, contact me HERE.