Less Than 2023, Higher than Average: 3.2% Social Security COLA Projected

Do you remember all the buzz one year ago about the Social Security cost of living adjustment? Better known as “COLA,” the annual adjustment in benefits – anticipated last year to be one of the largest in history for 2023 – was being driven by sky-high inflation. By the time Social Security officials processed all the inflationary numbers, beneficiaries saw their Social Security payments for 2023 jump by 8.7 percent – the highest COLA hike in four decades.

This year, the Social Security COLA picture is quite different. While inflation remains stubbornly high, it’s far lower than it was a year ago. The 2024 adjustment won’t become official until September inflation is known, but as of today – according to this report from USA Today – experts say Social Security beneficiaries can probably anticipate a higher-than-average but far-lower-than-2023 COLA of 3.2 percent.

Report Medora Lee wrote the USA Today article which also includes some insight into how inflation is harming seniors, and what might happen to Medicare Part B premiums. The bottom line, we think, is that America’s seniors are having a tough time keeping up. Let’s take a look.

Social Security COLA Pegged to Summer Inflation Rate

According to USA Today, the forecast for Social Security’s projected 2024 benefits now stands at 3.2 percent. That’s up a tick from the earlier 3 percent projection due to slightly higher August inflation figures. 

“Annual inflation in August rose to 3.7 percent, from 3.2 percent in July,” Lee’s USA Today article notes. Ironically, just over a year ago, inflation stood at a 40-year high of 9.1 percent (back in June 2022). “Although inflation remains much higher than the Federal Reserve’s 2 percent target, the trend remains mostly lower.”

Social Security COLA Higher Than Average, Far Below 2023

Given those numbers, says the article, “Social Security recipients will see a lower cost-of-living adjustment (COLA) of 3.2 percent next year, according to a forecast from The Senior Citizens League, a nonprofit seniors group.  That’s less than half of the four-decade-high 8.7 percent COLA in 2023 but higher than the 2.6 percent average over the past 20 years.” 

While a drop in inflation clearly benefits seniors, senior advocates worry that aging Americans are falling farther and farther behind. “The harsh reality is that the amount that the COLAs increase benefits in most years is meager at best,” said Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.   

Despite Social Security COLA, Seniors Haven’t Kept Up

“Annual COLAs are meant to ensure Social Security beneficiaries’ purchasing power isn’t eroded by inflation,” reporter Lee writes.  “However, COLA hasn’t kept pace.”  As a result, she observes, seniors were “the only group that saw its share of poverty increase between 2020 and 2021,” according to the Census Bureau.  

As if to prove the point, Lee reports that the Census Bureau has just released data showing that the poverty rate for older adults “jumped to 14.1 percent in 2022 from 9.5 percent in 2020 and 10.7 percent in 2021, after accounting for government cash and noncash benefits, geography, taxes and necessary expenses.” Not an optimistic picture.

Social Security Not Designed to be Sole Income Source

Social Security was intended to replace roughly one-third of a middle earner’s average wages, according to Social Security officials. But many seniors rely on Social Security for up to 90 percent of their income. This over-reliance makes them extremely dependent on cost-of-living adjustments to help counter inflationary pressures.

As USA Today’s Lee writes, even the big 2023 adjustment left seniors falling behind.  “Even though inflation this year has been running below the 8.7 percent beneficiaries received [for 2023], seniors haven’t been able to recoup the losses they incurred in the past two years when inflation reached a 40-year high, Johnson of the Senior Citizen League said.” 

As Johnson told USA Today, “Inflation was so severe in 2021 and 2022 that the average Social Security benefit fell behind by $1,054, leaving 53 percent of retirees doubting they will recover because household costs rose more than the dollar amount of their COLAs.”  

Social Security COLA and the Medicare Part B “Wildcard”

Plenty of other costs eat away at the cost-of-living adjustment, says USA Today, including Medicare. “Seniors also worry every year about what they’ll have left of their COLA increase after Medicare Part B premiums, typically announced in November, are paid,” Lee writes. “Medicare Part B premiums, which are higher among high-income folks, are automatically deducted from monthly Social Security payments.”

According to Lee, last March the Medicare Trustees estimated that monthly Part B premiums for 2024 would increase to $174.80 next year, up from $164.90 this year. “However,” she adds, “that doesn’t include costs that come up after the estimate is released. One such cost could be Medicare’s initiating coverage in July of another new Alzheimer’s drug: lecanemab, known by the brand name Leqembi.”

(You’ll find our take on Leqembi in this August article from the Blog.)

Social Security COLA and the IRS

“Taxes eat into Social Security benefits, too,” USA Today writes, and higher benefits can trigger a tax surprise.

“In a survey of 1,759 retirees by The Senior Citizens League in mid-July,” says the article, “more than one in five Social Security beneficiaries (23 percent) said they paid taxes on a portion of their benefits for the first time” during the tax season that ended in April 2022. (The Social Security COLA that took effect in January 2022 was 5.9 percent.) 

As people start paying taxes for 2023, their income could take another whack. “We expect the number who pay tax on a portion of their Social Security benefits to jump even more as next year’s tax season reflects the 8.7 percent COLA increase in 2023,” Johnson told USA Today. 

Some Seniors Cope by Delaying Medical Care

One disturbing fact pointed out in the USA Today analysis: a large number of seniors are making ends meet by postponing medical care.

“With 79 percent of respondents in July saying essential items were pricier than a year ago, most are putting off medical care to pay for daily living expenses, the survey said. Nearly 2 out of 3 have postponed dental care including major services such as bridges, dentures, and implants to cope, while 43 percent said they’ve delayed optical exams or getting prescription eyeglasses.”

The article adds that one-third of respondents had “postponed getting medical care or filling prescriptions due to deductibles, out-of-pocket costs, and unexpected bills.”

Social Security COLA – Calculation and Timing

Each year, the Social Security Administration determines the COLA for the year to come based on the consumer price index for urban wage earners and clerical workers, called the CPI-W. They look at three months’ worth of data: July, August, and September.

The much-anticipated announcement is made in October and takes effect in January.

The impact of the program is huge, says USA Today. Roughly 70 million Americans receive benefits from programs administered by the Social Security Administration, three-fourths of whom are retirees and their dependents.   

About 90 percent of those 65 and older receive a monthly benefit from Social Security. The average payment stands at $1,704 per month, according to the Social Security Administration, which means a 3.2 percent COLA would mean an extra $54.50 each month, before taxes.

This is a developing story, so we’ll keep an eye on things as we hear more. Meanwhile, this AARP analysis shows the history of Social Security COLA changes since 1975 when adjustments began, in case you want to look deeper.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.usatoday.com)

Health Alert: Preventable Medical Errors Kill 250,000 U.S. Patients Annually

When most of us go to see our doctor, we don’t expect her or him to make preventable medical mistakes. After all, we count on our doctor to give us proper care, and to know us well enough to avoid preventable errors. That’s the level of trust most of us have in the health care system.

Given that fact, does it surprise you, like it did us, to read that preventable medical errors take the lives of a quarter million Americans every year? And that preventable medical errors are the nation’s third leading cause of death? Those eye-popping statistics come from this recent article from USA Today in which reporter Karen Weintraub outlines findings of a recent White House study showing just how serious the problem of medical mistakes is in America.

We’re glad this issue is getting top-level attention. We also think this article serves as a loud, clear warning to choose your physician carefully. Rajiv will have more to say on that topic at the end of the article.

Preventable Medical Errors Endanger Medicare Patients

One reason we wanted to bring you this report here on the Blog is that seniors are at particular risk.

We took a look at the White House report, and it paints a bleak picture, particularly for patients on Medicare. “Doctors, nurses, and other healthcare staff are passionate, dedicated professionals who care deeply for the patients in their care,” the report begins. “Nonetheless, dangerous and preventable events continue to occur at surprisingly high rates.”

Recent data, says the report, reveals that “Medicare patients suffer an adverse event in one out of four hospitalizations.”  Many of these result in what the report calls “catastrophic outcomes.” Most damning of all, says the report: “More than 40 percent of these events are determined to be due to preventable errors.”

Preventable Medical Errors: A National Priority

“Patient safety likely remains the nation’s third leading cause of death and addressing it needs to be a key national priority,” Weintraub writes, quoting a presidential panel whose report was issued this past week. This same panel had also released a companion report calling for improved use of data and heightened transparency surrounding patient safety. Another part of the strategy: the appointment of a national patient safety coordinator.

“Finally, we are putting patient safety at the top of the national agenda where it belongs,” says Leah Binder, who was not involved in the report but is president and CEO of The Leapfrog Group, which rates hospitals and other healthcare facilities on their safety. “For far too long we’ve overlooked it.”

Preventable Medical Errors May Top 250,000 Annually

According to a 2016 study by researchers from Johns Hopkins University School of Medicine, preventable medical errors kill 250,000 Americans per year, and Binder says that there’s no reason to think that the number has dropped in the years since then. In fact, it has likely increased during the spikes of the pandemic, when facilities and caregivers were overburdened. 

“We know how to prevent the errors and accidents that kill too many Americans,” Binder says. “We know how to fix it. It’s just having the will to fix it. This set of recommendations, if enacted, can get us there.”

Key Recommendations Stop Preventable Medical Errors

The President’s Council of Advisors on Science and Technology spent a year studying patient safety before releasing its report. The following recommendations—verbatim from Weintraub’s article—were provided in the report:

• Establishing and maintain federal leadership for improving patient safety as a national priority;
• Ensuring patients receive evidence-based approaches for preventing harm and addressing risks;
• Partnering with patients, families and communities that are disproportionately affected by medical errors and substandard care; and
• Accelerating the development and deployment of new technologies and highlight outstanding systems of safe care.

Preventable Medical Errors: “Not About Placing Blame”

“If airplanes were crashing, people would be universally outraged,” says Dr. Harlan Krumholz, a cardiologist at Yale School of Medicine and a member of the working group, “but because medical errors tend to happen quietly to individuals, they tend to get ignored.”

Krumholz continued to explain that improving safety is not about blaming individuals or getting them to work harder, but about building better systems. To continue his example about airplanes, the aviation industry has spent decades streamlining their system of checklists, accountability, and early interventions to make air travel much safer. But in health care, “we still have failed to create a system that’s very safe and highly reliable,” Krumholz says.

Preventable Medical Errors: Could Ego Play a Part?

Physician egos can’t be understated as a potential part of the problem, say many experts. “Pilots, like doctors, are used to being the heroes at the center of the action, but they long ago realized that they were dependent on strong teams, systems, feedback and instruments,” Weintraub writes. “It’s time for medicine to make the same shift.”

Krumholz adds, “This is a chance to say we need a reset. We need to institute the kind of initiatives that will ensure the safety of anyone who is seeking and receiving health care in this country.”

People of Color at Greater Risk from Medical Mistakes

Krumholz also explained that the issue health equity was a significant finding in the report. “When bad things happen in medicine, they tend to happen more often to people of color,” he says. “In helping everyone, we should be able to close the gaps that exist based on the color of your skin or your ethnicity, which shouldn’t have anything to do with your risk as a patient, but do.”

Binder’s focus has been on the requirement that each hospital list its rate of preventable infections, rather than allowing whole systems of hospitals to provide one figure across all of their facilities. “I don’t care about the infection rate of a corporation. I care about the infection rate of a hospital I’m about to trust my life to,” she says.

But the fact that the report puts patients and their families at the center of the discussion is a great encouragement to her. As Binder states, “Having a national patient safety team will make sure that patient safety at least has a seat at the table when major decisions are made about health care in this country.”

Rajiv’s Answer: Choose a Geriatrician as Your Primary Care Doc

We asked Rajiv Nagaich about this story, and he repeated a recommendation we’ve heard him make frequently: seniors need to pay special attention to the primary care physician they choose.

“I tell my clients and my radio listeners time and time again,” he states emphatically. “As you grow older, you need a doctor who really, truly understands the physiology of aging – and that means a geriatrician.”  These board-certified doctors, as Rajiv explains, specialize in the specialized category of geriatric medicine, and they’re trained to help you stay healthier longer.

“Your odds of better medical outcomes are dramatically improved if you have a geriatrician as quarterback of your medical team,” Rajiv urges. If you’d like to know more, contact us for a referral.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.usatoday.com)

Assisted Living Facilities Facing New Strain as Residents Become Older, Sicker

For decades, assisted living has been seen as the ideal bridge between independent living and skilled nursing care. When mom or dad needed a little extra help with activities of daily living, such as assistance getting dressed or reminders to take prescriptions, assisted living facilities were designed to meet the need. One industry source pegs the current U.S. assisted living population at 810,000, with demand expected to top 1 million beds by 2040.

But are assisted living facilities and staff up to the challenge of caring for older, sicker residents? According to a comprehensive report spotlighted in a late-2022 article from KFF Health News, the answer is no – and the concern is growing among industry experts that the crisis in assisted living will only get worse as an aging population and rampant staffing shortages put a growing strain on a woefully overtaxed system.

The KFF Health News article was written by the excellent reporter Judith Graham. It’s a powerful early warning to families searching for the ideal living situation for seniors in need of extra aid.

Assisted Living Facilities Aren’t Meeting Resident Needs

A recent report published on the JAMA Network by a diverse panel of experts has found that assisted living communities too often fail to meet the needs of older adults. In her sobering Kaiser Health News article, Graham calls this, “a clarion call for change inspired by the altered profile of the population that assisted living now serves.”

She writes, “Residents are older, sicker, and more compromised by impairments than in the past: 55 percent are 85 and older, 77 percent require help with bathing, 69 percent with walking, and 49 percent with toileting, according to data from the National Center for Health Statistics.”

The litany of health concerns doesn’t stop there. “Also,” Graham continues, “more than half of residents have high blood pressure, and a third or more have heart disease or arthritis. Nearly one-third have been diagnosed with depression and at least 11 percent have a serious mental illness. As many as 42 percent have dementia or moderate-to-severe cognitive impairment.”

Assisted Living Care Standards are Inadequate

According to the experts, assisted living facilities have not kept up with the changing nature of their clientele and have adopted no widely accepted standard of care. To this end, the experts provided 43 recommendations in the report for what they hope will be a new set of standards.

One such set of recommendations addresses staffing. Graham writes, “The panel proposes that ratios of health aides to residents be established and that either a registered nurse or a licensed practical nurse be available on-site.” (Graham notes that the panel did suggest further research on staffing requirements was necessary before they could advocate specific recommendations.)

Assisted Living Facilities Struggle to Hire, Retain Staff

This warning about staffing is especially timely, the article states, since assisted living operators are still struggling—like so many in their field—to hire and retain staff in the aftermath of the COVID-19 pandemic, with a majority reporting a “moderate” or “high” level of staffing shortages.

KFF Health News reports that inadequate staffing has in turn led to very poor handling of sensitive problems. Residents are often left without help when they fall and need assistance, or cannot get someone to aid them with toileting or other crucial functions.  The article includes anecdotal evidence of substandard care bordering on neglect.

Pandemic Deaths Point to Staff Training Inadequacies

The COVID pandemic had other effects on the industry, as reflected in the panel’s findings. Graham writes, “The panel also recommended staffers get training on managing dementia and mental illness, on medication side effects, on end-of-life care, on tailoring care to individual residents’ needs, and on infection control — a weakness highlighted during the height of the pandemic, when an estimated 17 percent more people died in assisted living in 2020 compared with previous years.”

Dr. Helen Kales, a department chair at UC Davis Health, urges facilities to focus on training their staff members properly and thoroughly, remarking that “the better trained staff are, the more likely they are to provide high-quality care to residents and the less likely they are to feel frustrated and burned out.”

Memory Care Facilities Receive Special Scrutiny

This urgent need for training is especially acute in memory care, whether it is offered as a stand-alone facility or as a wing in a larger community. The experts discovered that so-called “memory care” can often cost extra, up to thousands of dollars more per month, and yet the only difference can sometimes be a locked door to prevent residents from leaving the unit. This is a far cry from the sensitive and personalized care that these facilities often advertise.

“Because dementia is such a pervasive concern in assisted living, the panel recommended that residents get formal cognitive assessments and that policies be established to address aggression or other worrisome behaviors,” Graham writes.

Assisted Living Facilities Need “More Enlightened” Approach

Kales suggests that, as part of a more enlightened approach to memory care, non-pharmaceutical strategies might be worth exploring, such as aromatherapy or music therapy. Another strategy could be closer observation of resident behavior, to catch early signs of deterioration and call for pre-emptive medical or psychiatric evaluations.

Graham notes that the personal touch so essential to effective senior care is often ignored. “Further recommendations from the panel emphasize the importance of regularly assessing residents’ needs, developing care plans, and including residents in this process,” she writes.

The Assisted Living Industry Agrees – but Worries About the Cost

The industry has so far been cautiously open to the panel’s recommendations, and spokespeople say that many facilities are already following them. But according to LaShuan Bethea, the executive director of the National Center for Assisted Living, the issue is practicality and cost.

“We need to understand what the feasibility would be,” she says, and has suggested that a broad study could look into this. “In the meantime,” she adds, “states should examine how they regulate assisted living, taking into account the increased needs of the residents.”

Assisted Living Facilities Lack Federal Oversight

Graham explains, “Because the nation’s roughly 28,900 assisted living communities are regulated by states and there are no federal standards, practices vary widely and generally there are fewer protections for residents than are found in nursing homes. Some assisted living facilities are small homes housing as few as four to six seniors; some are large housing complexes with nearly 600 older adults.” As noted above, over 800,000 individuals live in these communities.

Gaining a better understanding of the different “flavors” of assisted living, their proper names, and who they are best suited to care for, would go a long way toward moving the industry forward, according to the panel.

Future of Assisted Living is Unclear

Graham points out that the original idea of assisted living was supposed to be a social rather than a medical model, “a home-like setting where older adults could interact with other residents while receiving help from staff with daily tasks such as bathing and dressing.” But sadly, this doesn’t reflect the reality of the greater need, anymore, and has become outmoded.

Tony Chicotel, a panel member, thinks that assisted living should roll with the times, but still hopes it doesn’t become more of a medical model, like nursing homes. 

“What’s interesting is you see nursing homes pushing to get to a more homelike environment and assisted living needing to more adequately manage the medical needs of residents,” Chicotel says. “That said, I don’t want assisted living facilities to look more like nursing homes. How this all will play out isn’t at all clear yet.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.kffhealthnews.org)

With Retirement Funds Running Out, 85-Year-Old Woman Ashamed of Being a Burden

When it comes to caring for an aging parent, millions of American families have either walked that road or will be on it soon. Caring for an aging parent can trigger conflict with family members as financial and social pressures rise.

But issues surrounding caring for an aging parent can also trigger another, less acknowledged emotion: shame. That is the prevailing feeling we read about in this poignant first-person account published by NextAvenue. Author and consultant Elaine Soloway writes with piercing honesty, having just turned 85, that she feels ashamed as she realizes her retirement funds are fast disappearing and her adult children will be supporting her.

We share this article as a sober reminder that failing to plan for a longer-than-expected life span not only brings financial pain, but emotional pain as well.

Caring for an Aging Parent: “My Boat is Sinking”

Soloway begins her NextAvenue story with the recollection of her mother, who was left with debts and an empty bank account after the death of her husband. To keep from being a burden to her children, she married an older man who she thought was wealthy.

“Remarriage is not my goal,” Soloway writes, “but I’m in the same boat as Mom. And mine is sinking.”

Soloway is standing on the edge: her retirement funds will likely be completely gone in a little over a year, with her only remaining income coming from Social Security. She writes, “Fortunately, I have two adult children who have pledged to support me. But does that require them to sustain me in a posh high-rise? Do they have to pay the membership of my tony health club? But more important, how do I handle my shame?”

Though her children have never made her feel this way, and have only ever been proud of their ability to help her, Soloway is unable to shrug off the cloud of shame she feels. 

Caring for an Aging Parent After a Lifetime of Work

It’s difficult for Soloway to wrap her mind around how this has happened. She has always worked, teaching grammar school before her marriage, then working for a major real-estate company. She was a press aide for Chicago Mayor Jane Byrne and School Superintendent Ruth Love.

“A big city mayor!” she marvels. “A system of 649 schools and 341,382 students.”

She adds, “I am not without credentials. But evidently, I am diminished by a severe planning deficit. And the solution selected by my late dear mother holds no appeal. My shame is linked to a résumé that included my own PR agency that represented nonprofit organizations. I can give you names for references.”

Caring for an Aging Parent: “I Was All Set”

Soloway felt, like so many do, that she was flush with funds. “When my first spouse and I divorced in 1996, we split the sale of our Chicago home. I was all set,” she writes. “I remarried in 1998. My second husband Tommy was a dream of a mate. He entered our union with his modest life savings, which he turned over to our joint bank account. Blissful in this fresh union, I suggested we retire. We were in our late 60s, both with Social Security, and my remaining funds.”

But this didn’t last. In 2008, the financial crisis hit. “My balance sheet was cut in half. Somehow, I was not worried,” she writes. But Tommy died in 2012, she sold their home and moved to her current neighborhood. The rent continued to rise, and her retirement funds started to shrink.

Caring for an Aging Parent: Not Planning for Longevity

Soloway makes what we think is an important admission: she failed to account for longevity.

“What I didn’t count on was living this long,” she admits. “I turned 85 in August. My father died at 45, mother at 67. How could I live to this old age? I’m currently heathy. If an accident or errant cell doesn’t intervene, I could live into my 90s.”

Soloway wonders, in her article, whether her situation is typical or an outlier. She realizes she is fortunate to have children who have promised to help her age in place.

“But then there’s the shame,” she writes. “How could a woman as competent as I, with an employment record so stellar, wind up a burden to her children, like my mom feared? Any changes in the steps I’ve outlined could’ve altered the outcome. I could have chosen a wealthy fella for my second spouse. Why didn’t I? My marriage to Tommy brought riches of love, respect, happiness. That was a worthy bargain.”

Caring for an Aging Parent: Taking Necessary Steps

While she is proud of her children, both of whom have their own families, careers, and responsibilities, she can’t help but wonder, “Why do they have to fund my old age?”

She has considered downsizing, writing, “I could move out of this classy neighborhood and find one more affordable. I could end my membership in my high-class health club. My children would still have to pay my rent, but it would be considerably less. There are many neighborhoods where I think I can be happy. All I need is access to a park so my dog Doris can romp.”

Caring for an Aging Parent: “I Don’t Want to be a Burden”

Soloway knows that some will read this article and be frustrated with her. She hears their voices as she writes: “What is she complaining about? She will never be on the street or worry about her next meal. She should shut up and count her blessings.”

She agrees with these voices. And yet her emotions are very real.

“Like my widowed mother, I don’t want to be a burden to my kids,” she writes. “But I will not replicate her route, which turned out tragic. Her husband was a cheapskate, suffered dementia, and outlived her by many years. While I’m more fortunate than my mother, that doesn’t shrink my shame. How could I have witnessed her last years and now have my hand out to my children?”

She concludes her article with these poignant thoughts. “I’m grateful my kids are stepping up. But how do I handle the disappointment I feel about myself?”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.nextavenue.org)

25% of Medicare Advantage Members Report Unexpected Costs

Medicare open enrollment begins next month, and that means those Medicare Advantage ads can’t be far behind. But do Medicare Advantage (MA) plans really bring all the “advantages” they promise?

In recent years, about 40 percent of Medicare beneficiaries have chosen Medicare Advantage plans over traditional Medicare, and a large majority are reportedly satisfied with their coverage. But this recent article from Kiplinger, written by freelance journalist Joey Solitro, points to a survey in which a significant number of MA beneficiaries – one in four – express some degree of dissatisfaction with their plans, with many reported overbilling and unexpected costs.

Advertising for Medicare Advantage plans is relentless, and for some these plans offer good value. But for us the take-away from this article is, don’t be fooled by marketing hype. As open enrollment approaches, do your homework. Articles like these are a good place to start.

Most Medicare Advantage Beneficiaries Satisfied, but Not All

Writing for Kiplinger, Solitro says, “The majority of Medicare Advantage (MA) beneficiaries responding to a recent survey conducted by Retirement Living said they are satisfied overall with their plans but many also reported issues over telehealth services, overbilling, online and mobile app access and more.”

As we noted above, based on stats from 2021, MA plans had attracted about 26 million enrollees – roughly 40 percent of Medicare beneficiaries. But Solitro says caution is advised.

“When considering a Medicare Advantage plan be wary of promises,” he warns. “These private insurance alternatives to Medicare are growing in popularity at the same time that they’re under scrutiny for their sales tactics and coverage.”

Survey Shows Unexpected Medicare Advantage Costs and Co-pays

Solitro describes the Retirement Living survey which collected data from 351 Medicare Advantage beneficiaries. It was conducted to gauge the level of satisfaction of MA policy holders. The median age of respondents was 69.

According to Kiplinger, the survey “found that 71 percent of participants were satisfied with their plans. This includes 61 percent who believe their current coverage outperforms their previous plans.” That’s the good news.

“But about 25 percent of participants reported paying more money than they expected for co-pays and medications,” Solitro writes, “and nearly 25 percent said that service providers or coverage for certain procedures were limited, according to the survey.” That’s roughly 6.5 million dissatisfied policy-holders.

Moreover, cost wasn’t the only source of frustration. “Nearly 20 percent of participants said they had challenges receiving care due to delays caused by the prior authorization process,” says Solitro, “and 10 percent reported that they were overbilled for their plans, the survey found.”

Despite Higher Medicare Advantage Costs, Only 10% Plan to Switch

Surprisingly, even with these poor results, only a small fraction of respondents say they p;lan to change coverage. “Despite those and other concerns,” says the article, “only about 10 percent of participants said that they anticipate changing health insurance plans in the next year, the survey showed.”  It may be that even the frustrated policy-owners don’t relish the headache of switching coverage.

“While some Medicare Advantage plan members felt frustrated with their coverage, most enrollees expressed satisfaction with their benefits,” Retirement Living said in commenting on the survey. “In most cases, enrollees could resolve their greatest sources of frustration with a better understanding of the plan’s offerings and details.”

Top Medicare Advantage Attractions: Lower Cost, Better Coverage

The reasons people gave for choosing Medicare Advantage plans were pretty straightforward, says Kiplinger. “The survey showed that most people are enrolled in MA plans to save money and increase coverage, Retirement Living said. Many survey participants listed factors such as affordable costs and out-of-pocket expenses as well as prescription drug coverage as positively influencing their responses.”

Medicare open enrollment begins October 15^th and continues through December 7^th, so if you’re dissatisfied with your coverage – or enrolling for the first time – we urge you to start gathering information now. It may very well be that a change to your Medicare coverage is in order. Contact us and we’ll gladly provide some insight and refer you to qualified, objective Medicare specialists who can help you make the right decision.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.kiplinger.com)

Retirement Offers Many Advantages, but Prepare for the Losses, Too

“Am I ready to retire?” It’s a question most of us ask ourselves regularly. Retirement should be an exciting chapter in our lives – but we’d be kidding ourselves if we didn’t admit that there will be some losses in retirement along with many advantages. That’s the message in this article we just discovered from MSN describing some of the losses we may face as we grow older.

If you’ve listened to Rajiv Nagaich, you know that his philosophy in retirement is to prepare for the worst and expect the best. Having bright hopes and dreams for your retirement future is a great idea. But as part of your planning, stop and think clearly about some if the losses retirement may bring. Then do your best to prepare, so they don’t catch you off guard.

This MSN article was written by reporter Jennifer Derrick. We offer it, not as a downer, but as encouragement to enter this phase of life with optimism – yet with eyes wide open.

Losses in Retirement Can Blindside Us

We’re all well aware of the fun dreams most of us have about retirement. As long as we don’t have to worry too much about money, most of us expect to travel, indulge in our hobbies, play with our grandkids more, and just enjoy unfettered time as we get older.

Writing for MSN, Derrick cautions, “For many, our biggest fear is the loss of money. While that’s a valid worry, there will be many other losses in retirement that can blindside you if you’re not prepared for them. Dealing with that emotional load of bricks could put a crimp in your big fun. So, what are some of the losses you should consider now? How can you plan for them, mitigate them, and, ultimately, come to terms with them? Here are some retirement losses to think about.” 

Losses in Retirement Can Include Diminished Status

This loss is especially true for those with a high-flying title at work or a job held in high esteem. For you, it’s worth remembering that fewer people will recognize your titles after retirement. They might not be as quick to consult you on your expertise. This can be a humbling experience.

“You can (and probably should) mourn the loss of status, but if you can’t get past it, it can cause trouble,” Derrick writes. “It can damage relationships if you try to dominate your personal life the way you dominated your work life. Not to mention just bringing you down because you can no longer lean on your title for validation. Finding other things at which you excel can help, as can finding other ways to define and validate your worth.”

In extreme cases, seek counseling, he adds. “Professional help may be needed if other methods fail.” 

Losses in Retirement Can Rob Your Sense of Identity

For better or worse (and Derrick is not a fan of this societal norm), many of us define ourselves by the jobs we do. But when you lose your job through retirement, this can leave you scrambling for a new sense of self.

It’s a good idea to prepare yourself now to come to grips with the way the term “retired” is perceived. It’s a much more abstract identity than any job you’ve done up until now. “It can help to reframe retirement as a chance to change your identity,” Derrick writes. “Who do you want to be? What do you want to be known for? Go forth and forge a new identity based on what’s important to you, not what society called you during your working years.” 

Losses in Retirement Can Include Loss of Purpose

In a related vein, work gives us a sense of purpose, even if that purpose is simple. It gets us out of bed every day. So, what will get you out of bed without work?

Derrick writes, “You need to plan for a new purpose once your working days are done. Will you volunteer? Care for family or grandkids? Will you do some part time work in a field that means a lot to you? Figure out your new purpose before you retire. It may change over the course of your retirement, but at least have something to aim for in the beginning.” 

Losses in Retirement Can Leave You Feeling Unstructured

Work also brings intrinsic structure to your days. When you’re working, you have a schedule. Retirement doesn’t have a built-in routine. And while that might sound wonderful at first, the unstructured life can be difficult over time if you don’t build any order into it. 

“You need a plan to put some guardrails on your time,” Derrick suggests. “Pick a wake-up and bed time and stick to them. Have a loose plan for your days. For example, you can do chores in the morning, volunteer or exercise in the afternoon, and do social activities in the evening. You don’t have to account for every hour, but having a loose schedule can help.” 

Losses in Retirement Can Make You Feel Unneeded

Related to loss of purpose, but slightly different, retirement can leave you with a sense of uselessness. When you’re working, your skills and labor are needed and sought after. This might be even more keenly felt if you’re also an “empty nest” retiree and your kids are living their own lives. 

“Feeling useless is a fast track to depression, so find ways to feel needed. That may mean forging new relationships, babysitting the grandkids, volunteering, or some part time work. Even just helping your neighbors with their chores or projects can make you feel needed,” Derrick writes.

Losses in Retirement Can Rob You of Your Friends

Working doesn’t always entail having more friends, but it can. At the very least, it can mean daily social interactions that go away when you retire. And sadly, our retirement years can also mean losing friends to the passage of time.

“You need to find a way to both keep old friendships going and forge new ones,” Derrick advises. “Have lunch with your old work friends a couple of times per month. Stay on the work text chain, if you can. As your work friends also retire, invite them to more and more things with you. And when you’re looking for new friends, don’t discount those younger than you. Not only can they help you feel younger, there’s less chance of losing them to death. Seek out activities with a mix of ages and try to befriend all age groups.”

Losses in Retirement Remind You of Your Own Decline

It’s a fact of life that quitting work at anything approaching the traditional “retirement age” often means accepting that you’re getting closer to the end of earthly life. “It’s easy to keep thoughts of mortality at bay when you’re working, but when you enter retirement, a.k.a. the final phase of life, death often stares you in the face,” Derrick writes.

She adds, “Death is something we all have to come to terms with. Religion or counseling may help, or you may be able to get to grips with it alone. Just don’t let the end of denial smack you in the face. Prepare to face the facts.” 

Losses in Retirement Often Result in Loss of Income

For many people, earning an income isn’t just a matter of material security, it also comes with an emotional component. Some people don’t realize how valuable earning money makes them feel. When that income stops, so does the accompanying sense of value.

“Create value for yourself independent of money,” Derrick urges. “And what about the shift from being a saver to a spender? Even though we all have dreams of doing fun stuff with our money, that shift from saving to spending can be jarring. You may need to create a spending budget just like you once had a savings budget. Planning for spending may make you feel better about it.” 

Losses in Retirement Can Bring Loss of Independence

Part of getting older is accepting that you might not be able to handle all of your own affairs for much longer. And while that can be a scary realization, it doesn’t have to feel like the end of the world. Putting a plan in place ahead of time can ease a lot of the discomfort.

“Where do you want to go? A community or assisted living? To your kid’s house? Who will handle the money? Your kids? A trusted relative or friend? A lawyer or trustee? How will you get around if you can’t drive? We all think it won’t happen and we put this planning off, but dealing with this stuff on the fly is messy and subject to leaving you in undesirable positions. Figure it out early in retirement,” Derrick writes.

Losses in Retirement Can Force You to Quit Hobbies You Enjoy

While endless days indulging in our hobbies sounds like a dream come true, it’s a fact that some of those hobbies might not be physically attainable as you get older. Sports like golf or activities like gardening might not be possible for too long, or you might lose your finer motor skills for the crafts or woodworking you enjoy. What is your plan if this happens? 

“If you’re basing a happy retirement on being able to do certain things for the duration, you may be disappointed,” Derrick writes. “Do you have other hobbies on the back burner that you can pursue? Maybe take up light walking with a neighbor if tennis gets too hard? Or reading/learning instead of travel? Start thinking about what might make you happy if your primary activities go away.” 

Losses in Retirement: The Biggest is Loss of a Spouse or Partner

No one likes to think about this, and even fewer want to talk about it. But if you’re part of a couple, there’s a high probability that one of you will be alone for a while, and life will go on.

“It won’t do any good to lie in bed and wait for your own death, no matter how much you may want to,” Derrick writes.

And planning for this isn’t just about the will and funeral. “What will life look like for one of you?” Derrick poses. “Will you stay in the family home or decamp to an apartment or senior community? Will you remain open to meeting someone else, or is that avenue closed forever? If there are hobbies you pursued as a couple, will you continue to do so, or will you need new activities? Is there work or a mission that your partner will want you to keep alive for them?”

She adds, “It can help to talk it over with your partner ahead of time so you each know the other’s thoughts as you plan for life without the other.” 

Losses in Retirement Can Sometimes Mean Losing a Son or Daughter

This is arguably the hardest subject to talk about, but it does happen. Adult children can and do die before their parents, and this can be crushing if the parents aren’t prepared for this and expect that their adult children will be there to help them in their decline.

“You should have a plan just in case,” Derrick writes. “Who will handle your affairs if your child predeceases you? Who will get any inheritance if your children die? Where will you go for care? Make these plans early and make them legal so you don’t add that struggle to your grief.”

Derrick concludes by encouraging us with the thought that not everyone will experience everything on this list. And some lucky few may experience none of these. “But for the majority of us, at least some of these losses will dampen our retirement years,” she writes. “Having plans and support systems in place (or at least in mind) ahead of time can make dealing with them easier. So while fretting about money is important, don’t forget to prepare for how you’ll keep other losses from bringing you down.” 

(originally reported at www.msn.com)

LTC Insurance Premiums Going Way Up? You Have Some Choices to Make

The high cost of long-term care insurance can be a burden, especially when rates shoot up with little warning. Have your LTC insurance premiums gone up recently? And if you have seen a big hike in long-term care insurance premiums, have you wondered what you should do? 

For people with long-term-care insurance (about 7.5 million Americans in 2020), every year brings a twinge of nervousness as the companies send their letters telling policy-holders what the premium will be for the coming 12 months.  

For policy-holders who bought LTC insurance in the past decade or so, the rate hikes might not have been quite as onerous, since the few remaining firms in the industry seemed to have learned how to price their products more accurately. But the odds are that those who purchased policies 15 or 20 years or more ago have seen huge jumps in premiums over the years. 

Not If, But When LTC Insurance Premiums Will Rise 

Regardless of when you bought your policy, the prevailing wisdom is that it’s not a matter of if rates will go up, but when – and by how much. We think it’s always good to plan ahead and consider what your options would be when that letter arrives with bad news.  

With that in mind, we offer this 2022 Kiplinger article in which certified financial planner Evan Beach offers some food for thought.  In Beach’s mind, should a hefty LTC rate increase come your way, you have four basic options – and the one you select depends on your circumstances. Let’s take a look. 

LTC Insurance Premium Hikes Can Be Tough to Swallow 

Writing in Kiplinger, Beach contrasts the price of insurance with the price of something we all need every day: gasoline for the car. “There is no more popular watercooler talk these days than the exorbitant price of gas,” he writes. “As with all buying decisions, you must decide whether the benefit is worth the cost. In the case of filling your tank, if you rely on your vehicle to get you to your job, that analysis is pretty easy.” 

But clearly, insurance is far different. “When it comes to long-term-care insurance, and all insurance for that matter, the immediate reward is not there,” says Beach. “You have to pay today in exchange for the intangible benefit of security. All of this is to say, when that letter comes in the mail saying that your long-term-care insurance premium is increasing (again) by 20 percent, 40 percent or even 60 percent, it is an especially tough pill to swallow. After all, will you ever even use this insurance?” 

Root of LTC Insurance Premium Issues Dates to 1970s 

Beach offers what he calls “a bit of history” as a way to help policy-holders better understand their options should those rates take a leap. “Long-term-care insurance arrived on the scene in the late ’70s,” he recounts, “and, according to the American Academy of Actuaries, had an average issue age of 57. This caused two specific issues with pricing the policies accurately.” 

First, he explains, companies had to project far into the future – 40 or 50 years in some cases – to predict costs and payment rates. That’s because LTC policies aren’t put to use until very late in life. “Second,” Beach adds, “in 1980 the yield on AAA corporate bonds was almost 12 percent.  While this was historically high, most general accounts of insurance companies are made up of bonds.”  The companies were riding high in those days. 

LTC Insurance Premiums Rose as Companies Under-Estimated Costs 

In other words, long-term-care insurance companies over-estimated profits and under-estimated costs. “Fifty years of bad assumptions combined with longer life expectancies have led to significant losses in the long-term care insurance business,” Beach writes. Estimates are that only about a dozen firms sell LTC policies in the U.S., a dramatic reduction over the past few decades.  

This high rate of profit/loss mismatch is what triggers rate hikes. “When an insurance company can prove that business case to the state insurance commissioner, the company is allowed to raise premiums,” says Beach. When you as a policy-holder get the bad news, he offers four options – two of them are what he calls “Extreme” while the other two are “Middle Ground.” 

Extreme Option #1: Cancel the LTC Insurance Policy 

According to Beach, when the “dreaded letter” arrives, you can always cut the cord and cancel the policy – what he calls a “get out of jail (kind of free)” card.  “Typically,” he writes, when you cancel, “you will get a check for some portion of premiums you paid, and the policy will go away.” (We’re not sure about that partial premium refund – no doubt it varies with your carrier and your policy terms.)   

In Beach’s view, those who choose outright cancellation were probably “sold” the policy rather than “buying” it.  “That is, some insurance agent did a good job of convincing them they needed it,” he explains. “However, the buyer never was fully convinced of the benefits.” 

When does this make sense? Beach seems to feel that the choice to cancel only makes sense for a fairly small group of people. “When your financial situation has improved to the point where you can afford to self-insure,” then consider cancelling, he writes. “If you went into a facility for two to four years, you would be hurt financially but could afford it.”  

Extreme Option #2: Accept the Full Increase 

If cancellation is one extreme, then acquiescence is the other: just suck it up and write the check. “The folks who write the biggest premium checks are often the ones who have had family members need long-term care,” Beach suggests. “They ‘bought’ the policy because they were already convinced of the utility and need.” They are probably least likely to cancel. 

When does this make sense? “When you have significant retirement assets or income and/or you bought the policy as an estate preservation tool,” says Beach. “Imagine you have $6 million in retirement assets. Entering a LTC facility in 15 years could wipe out $1 million pretty easily. You may accept the full increase as a bet that those premiums will total less than the cost of care and that the estate transferred to your kids will be worth it.” 

Evaluating LTC Insurance Premiums with a Financial Dashboard 

Rajiv Nagaich would suggest that both these “extreme” scenarios – in fact, the entire long-term-care scenario – really cry out for a financial dashboard. Without this important tool, you’ll be flying blind. But with a dashboard in place, these essential financial decisions can be made with far greater confidence – giving you the ability to chart your future course, no matter what. Using a financial dashboard, it’s far easier to see what the implications are for your financial future – with or without LTC insurance – if you someday need care. 

Middle-Ground Option #3: Accept One of the Company’s Options 

Clearly, insurance firms don’t want you to cancel, so they’ll offer ways to mitigate the rate increase by adjusting coverage. “The letter you receive from XYZ insurance company will come with two or three [adjustment] options,” Beach writes. These can include reducing the annual cost-of-living adjustment, reducing the monthly or daily benefit, or increasing what’s called “the elimination period” – the period of time before benefits kick in.    

When does this make sense? Beach writes that making one of these changes might be a good choice if your coverage fails to match industry averages. Beach refers to a website called LongTermCare.gov which tracks statistics for things like the average cost and duration of stay. “Say, for example, your policy has a five-year benefit period and the average length of stay for a male is 2.2 years,” he writes. “If there is an option to reduce the benefit period to three years, I might recommend that path.” 

Middle-Ground Option #4: Explore All LTC Choices  

Even though Beach lists this one last, it’s actually where the conversation should begin. “This is always our starting point,” he writes. “It’s not to say that we won’t pick one of the above options, but we want to explore all available paths” – even the less obvious ones. 

His advice, instead of trying to call your insurance carrier on the published customer service line – guaranteed to subject you to extended time on hold – is to reach out to your financial adviser to see if they have a better number to call. “They often do,” he suggests. “Once you get a representative on the phone, that person will be able to tell you the options that were not listed. There is often significant flexibility to adjust your policy to actually fit your needs.” 

When does this make sense? Beach makes a bit of a leap here, but his advice is sound, we think: you should reach out to your financial adviser “when you have a financial plan that shows you the exact gap you would have to cover if you were to need care. The best financial planning programs have LTC insurance needs analyses that can show your exact gap.” 

Beach doesn’t call this kind of plan a financial dashboard, but in our view, this is the kind of plan that works. Contact us and we’ll gladly recommend a planner who can assist you. And don’t wait until you get an unpleasant note from your insurance company! 

Beach concludes by observing that difficult choices are “inevitable for most people with traditional long-term-care policies” as fewer companies offer traditional LTC coverage. But at the same time, he adds, there are “innovative new ways to pay for care.”  We think his closing advice is sound. “Always start with your need. Let your need dictate your plan. Let your plan dictate your product.” 

Breaking News: Rajiv’s New Book is Here! 

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.  

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read. 

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more. 

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.  

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone! 

(originally reported at www.kiplinger.com)  

How Failing at Long-Term Care Planning Can Hurt Those You Love

Oftentimes the best way to prepare for a journey – in this case, the journey of long-term care planning for a loved one – is to talk with those who have been there. We know how long-term care planning is supposed to go when the process unfolds smoothly. But what if we haven’t planned, and the caregiving challenge arrives without warning?

This article from NextAvenue helps answer that question – and it comes from an interesting source. The authors are two financial planners, one in Wisconsin and one in California, who both – at a young age – unexpectedly found themselves navigating the world of providing care for aging family members. Elliott Appel (in Wisconsin) and Danielle Miura (in California) have a powerful story to tell about the chaos that arises when caregiver planning fails.

Long-Term Care Planning: When Caregiving Begins Abruptly

The NextAvenue article begins with twin stories of sudden health care emergencies. “One fall and [one] diagnosis changed both of us from everyday millennial financial planners into family caregivers trying to navigate the health care system for our families,” the authors relate.

The two authors go on to explain their respective stories. For Elliott, the caregiving journey was seven years long and began when he was 25 years old. His father, Darrel, was diagnosed with stage IV lung cancer, which he beat, but then Darrell fell ill to dementia not long after. He passed in July 2023.

Danielle’s story was similar. She also began caregiving when she was 25, but her grandmother, Neda, broke her hip after falling on a tile floor. Because her heart was too weak to safely manage a surgery to repair the hip, Neda has been confined to a wheelchair since 2021. 

“Providing family caregiving for a combined nine years has made us passionate about spreading awareness of the large and growing need for caregivers and helping people already caring for family members,” Appel and Miura write. “Here are some pivotal moments along our caregiving journey and tips to help you navigate long-term care planning for yourself or a loved one.”

Start Your Long-Term Care Planning by Organizing Legal Documents

As financial planners for caregivers, Appel and Miura stress that having legal documents in place should be Job One, no matter what stage of the journey you’re in. “These include your will or trust, power of attorney for health care and financial matters and an advanced health care directive,” they explain.

In Elliott’s case, Darrel had a durable power of attorney (DPOA) in place, which made it both possible and much simpler for Elliott to manage all of the finances and pay bills on behalf of his father. Even when Darrel lost his phone after being hospitalized, Elliott was able to get him a new one through the DPOA. It’s a vital piece of documentation for any caregiver.

We wrote about the need for a power of attorney in this recent article on the Blog.

Without Long-Term Care Planning, Caregivers Have to Pick Up the Pieces

The opposite is also true: without a DPOA, life for a caregiver becomes much harder. “This is why it’s essential for aging adults to have a durable power of attorney for financial matters that names an agent — a disinterested professional, for example, or a trusted family member — to step in and manage your finances if you are unable to do so,” the authors write.

They continue, “Talk with your lawyer about the differences between a ‘springing’ durable power of attorney and a durable power of attorney. A springing DPOA usually becomes effective only if two physicians declare you incapacitated. While this sounds nice on paper, it does not work well in practice with cognitive issues, where someone can often still make their own decisions about things like how to cook or what to wear but can’t look after their financial affairs.”

Long-Term Care Planning: “Test Drive” Your POA

Instead of waiting for a crisis before learning more about your DPOA, it’s ideal to test it out by filing a copy of it at each of your financial institutions. “This way, you can test whether it allows you to move money, call and get information about your account, and make other changes,” Appel and Miura explain.

This isn’t just for your sake; many banks and financial institutions are still ill-equipped to handle legal documents, and testing out your DPOA could also reveal potential issues before they become a real problem. Elliott experienced this firsthand, when his father’s bank told him that they didn’t have Darrel’s DPOA on file, even though Elliott and Darrel had previously hand-delivered it to a bank employee.

“The bank resolved the problem but it required more time and stress at an emotionally difficult time for his family,” Appel and Miura write. “Institutions also have different rules around DPOAs: they could for instance, require people given durable powers of attorney to possess certain powers or they may limit a DPOAs’ authority in order to block them from some specific actions, like opening new accounts or changing beneficiaries.”

This is why testing your DPOA out before you truly need it can be hugely beneficial.

Long-Term Care Planning: Your “In Case I Die” File

When Danielle’s grandmother fell, it was completely unexpected and caused a mad scramble on the part of the family to figure out how to proceed. “It felt like trying to assemble a big jigsaw puzzle that was missing half of its pieces,” Miura writes. “If you think all your documents are squared away and easy to find, it’s a much different story when someone else looks for them and looks at them without your support.”

This is why Appel and Miura highly recommend preparing an “in case I die” file, calling it an act of love for your loved ones. “Assembling such a file helps you organize your critical financial documents in one place in case you become incapacitated, ill or unexpectedly pass away. The file can be as short as one-page or as lengthy as a book,” they write.

The authors explain that a file like this should contain critical financial documents, recurring bills and how to pay them, account information and passwords, an inventory of assets and liabilities, and your estate-planning documents. And most importantly: it should explain how you want your finances and health handled by your loved ones.

Long-Term Care Planning Includes Picking a Lieutenant

Appel and Miura agree: it is a good idea to make sure you have a trusted loved one set up as an additional contact on key accounts ahead of any crises.

When Elliott’s father was hospitalized, they needed a note from him to access his cell phone account and set up a new one. This is something Elliott wishes he had been given access to much earlier, because attaining his father’s signature as the dementia progressed grew more and more difficult.

Educate Your Caregivers About Your Long-Term Care Planning

“Navigating long-term care during the pandemic was like finding Goldilocks’ perfect porridge,” Appel and Miura write.

Danielle and her family struggled to educate an ever-rotating series of in-home care agencies about Neda and her unique needs. When Neda got COVID, the care agency refused to care for her, facilitating Danielle starting all over again with a new agency.

“Even though Danielle worries that care workers may burn out working longer hours, it eases the stress of high turnover and inconsistent care. Importantly, working with a geriatric care manager has helped Danielle understand her grandmother’s needs, evaluate local care agencies and coordinate medical services,” the article states. “If you have a loved one with behavioral issues, ensure assisted living facilities or adult family homes closely read their medical records and know their behavior.”

In Long-Term Care Planning, Learn from Others’ Mistakes

In the end, Appel and Miura’s message is clear: caregiving is difficult enough without preventable surprises making things worse.

“One of the most thoughtful gifts you can give your family is to make sure your legal documents are in place, you have clearly expressed your desires to family members and you understand care options and their costs,” they conclude. “We have made mistakes, planned appropriately and learned as we went along. We hope Next Avenue readers will learn something from our experiences and use it in their lives.”

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.nextavenue.org)

Rajiv: Traditional “Ready to Retire” Guidelines Are Not Enough!

If you’re “of a certain age,” there’s no doubt you’ve wondered many times when you might be ready to retire. Certainly, there’s no shortage of articles that attempt to help you answer the question, “Am I ready to retire?” Sadly, while some of these articles might contain pearls of wisdom, all too many are either one-dimensional or self-serving, or both.

Here at the Blog, we think this recent article from CNBC, written by reporter Ira Wilder, is a case in point. It’s not that Wilder’s information is necessarily wrong, says Rajiv Nagaich – instead, the problem with the article is that it parrots the financial industry line that all you need for retirement readiness is to buy whatever product it is that they’re selling. This represents yet another article suggesting that having plenty of money means a happy and fulfilling retirement.

Is that true? Rajiv says, definitely not. Let’s first dive into the CNBC article, then we’ll give Rajiv the last word.

Ready to Retire in Times of Financial Uncertainty

“Retirement used to be a three-legged stool,” Wilder observes in his CNBC article – “one that rested on pension checks, personal savings and Social Security benefits. But today, that stool is a little wobblier.” The reasons are clear: “Social Security seems less secure, pensions are a promise of the past for most Americans, and the lion’s share of retirement finances are now personal savings.” 

With that in mind, says Wilder, “you have to weigh a lot of different factors before deciding you’re ready [to retire].”  For his article, Wilder talked with financial experts for their insight on how, in his words, to compile “a list of milestones you need to reach before leaving work behind.”

Full disclosure: this article appeared in a section of the website called CNBC Select, which is partly supported by “affiliate partners” including many banks and financial institutions. Perhaps that’s why the article reads like an ad for the financial services industry.

With that in mind, here are Wilder’s six triggers that say you’re ready to retire.

#1. You’re Ready to Retire When You Have Enough Money

Sounds basic, doesn’t it? But this seems to be the essential point of Wilder’s article.

“Figuring out how much money you need to have saved before you can quit working is a job in and of itself,” he writes. Some say that you should save at least 10 times your annual salary by the time you’re 67. Others point to the 4 percent rule, which states that you should be able to comfortably live off of about 4 percent of your investments in each year of retirement, thus allowing you to cover expenses for about 30 years.” In other words, advice will vary.

“One of the first questions would be ‘What does retirement look like for you?’” financial planner Jackie Koski says. “So, for some people, that doesn’t mean that they want to do anything but play with their grandkids and travel.” Your retirement lifestyle will have a significant effect on your financial needs.

Wilder offers this rule of thumb: take your annual retirement budget and multiply it by 25 – the estimated length of the average retirement. “Just remember this is only an estimate,” he adds, “and that it’s better to save too much for retirement than too little.” Sounds arbitrary to us.

#2. You’re Ready to Retire When You Have an Emergency Fund

“One of the biggest mistakes a retiree can make is not having an emergency fund,” Wilder writes, and here we agree. “In retirement, a lot of your investments and sources of income are less liquid than cash, since you can’t just go to your bank and withdraw cash from your account instantly when your money is invested in the market.”

So, what’s the solution? “A great place to keep your emergency fund is in a high-yield savings account, which lets your money safely earn interest while still enjoying FDIC protection,” says the article. Conveniently, he goes on to link to several banks with whom it would seem that CNBC has advertising ties. We suggest you shop around for the best savings return you can get with the least amount of risk and a good degree of liquidity.

“No matter what account you choose to put it in, your emergency fund should remain easily accessible and shielded from the ups and downs of the stock market,” Wilder warns. As Fidelity advisor Joe Buhrmann told CNBC, “You don’t want to say ‘Honey, you can’t have that heart surgery because our accounts are down 20 percent.’ You want that [fund] to be safe and secure.”

#3. You’re Ready to Retire When You Have a Diverse Portfolio

“It’s not a good idea to put all your eggs in one basket when it comes to creating sources of income for retirement,” says Wilder. “You mitigate risk by spreading your savings and investments across multiple streams of future income.”

Wilder quotes Houston financial planner Scott Bishop who offers his advice on how to shift your investment risk as you get closer to retirement, focusing on “safer but slower-growing accounts like certificates of deposit, treasury bills or money markets” as you age.

Wilder also recommends working with a good financial planner. Here we would emphasize that the planner you want is someone who will help you develop a financial dashboard – a tool that lets you see a wide range of outcomes based on assumptions about your rate of saving, spending, and investing. Instead of working with a commission-based planner, we urge you to seek out an objective professional who will help you, not take advantage of you. Contact us and we’ll gladly send you some trusted recommendations.

#4. You’re Ready to Retire When You Understand the Role of Social Security

Planning for ways to optimize Social Security benefits – for yourself and your spouse – is a big part of retirement readiness. Financial planner Scott Bishop told CNBC that the absence of a guaranteed lifetime income is a major source of financial stress, and Social Security can help provide some stability, along with an annuity, or perhaps a pension if you’re entitled to one. 

According to Bishop, some of his clients have taken early Social Security benefits only to wish later that they hadn’t. “I’ve had clients that have made those decisions and regret that now because they’re getting $1,500 or $1,600 a month from Social Security, where they could have had $2,400 or $2,500 a month if they waited a few years,” he told CNBC.

For more on Social Security claiming strategy, check out this recent article on the Blog. 

#5. You’re Ready to Retire When You’ve Planned for Healthcare

In the face of rising medical costs that tend to come with age, retirees generally have said good-bye to company-paid healthcare. This leaves them open to potentially out-of-control long-term care costs.

Fidelity’s Buhrmann told CNBC that he recommends a combination of Medicare coverage plus a health savings account (HSA), which he calls “a triple tax-advantaged way of saving for upcoming medical costs.”  With an HSA, interest builds over time and can be used to reimburse you for qualifying medical expenses. “To get the most out of your HSA, you need to invest in it as soon as you can and not wait until your retirement is around the corner,” says Wilder.

But in this section, Wilder seems to skirt the issue of long-term care entirely. We’re not certain if he has even thought about the peril of uncovered long-term care costs, which Rajiv would argue is the greatest problem most retirees will face. 

#6. You’re Ready to Retire When You’ve Eliminated “Bad Debt”

Here Wilder differentiates between what we assume is acceptable debt, such as a mortgage, and “bad debt” which he defines as high-interest consumer debt such as credit card balances. “You should take care of this before retiring and strongly consider adjusting your spending habits before ending your working income,” he admonishes. 

Of course, he then recommends a debt consolidation loan and conveniently links to a few preferred providers who will gladly complete the transaction. While such a loan may have its place in your plan, we strongly urge you to get good, objective financial advice before borrowing more money. Here again, a financial dashboard can show you solutions to your indebtedness that you might not have considered.

Rajiv: Being Ready to Retire is About More than Money

We asked Rajiv Nagaich for his view of this article. As you might expect, he minced few words

“So-called retirement advice like this is the reason why we have such miserable retirement outcomes,” he says dismissively. “This CNBC article simply says, if you have enough money, you’re ready to retire. Ready for what? How many people with plenty of money have been miserable in their old age because they thought their bank account was the answer to everything? It’s bloody frustrating!”

Rajiv shakes his head and adds, “Consumers are sleep-walking into an almost certain disaster, largely because we are being told that this kind of approach is what is needed for proper retirement planning. It’s crazy.”

Instead, in his professional focus, Rajiv offers a true, holistic retirement solution in the form of LifePlanning. “How about this?” he asks. “You’re ready to retire when you have a plan on how you will meaningfully engage with life – how you will stay relevant – how you want your life to look when you are no longer independent. That’s just for starters. Finances are just one part of the picture.” 

We hope you’ll want to find out more about how your retirement can be satisfying and fulfilling – and lived out on your terms!

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.cnbc.com)

Power of Attorney Denied: Here’s What You Can Do

Have you ever had a power of attorney denied, or rejected by a bank as invalid? If you have, then you know how aggravating a power of attorney denied can be.

Anyone in the field of elder care will tell you that a power of attorney is an essential document. As a loved one ages, they may find themselves unable to handle the daily tasks that once seemed routine, such as paying bills, reconciling credit card statements, and balancing a checkbook. This is particularly true if a senior is dealing with cognitive decline, a condition which, if they’re unprotected, leaves them wide open to the scam artists lurking out there.

But what if the power of attorney document you’ve relied on as your protection is rejected by a bank or other financial agency as somehow invalid? This frustrating and troubling situation is the subject of this recent article from AARP, one of several similar ones we’ve seen recently. This one was written for AARP by Amanda Singleton, attorney and elder advocate, who has first-hand knowledge of the issue. Let’s take a look.

“An Impossible Task” when Power of Attorney Denied

“A durable power of attorney (DPOA) is one of the most important tools in a caregiver’s toolbox,” Singleton begins.

This legal document nominates a person, called an “agent”, to help you with your finances if you become sick or unable to handle them on your own. “The majority of caregivers handle some financial coordination for a friend or loved one — like paying bills from their care recipient’s accounts, managing investments or handling insurance claims. And without a power of attorney (POA), it can be a frustrating and almost impossible task,” Singleton writes.

Moreover, she speaks from experience. Singleton became a sudden caregiver for her mom, who did not have a POA prepared. “She spent weeks in the hospital and rehab after brain surgery and it was maddening for me to do even the simplest tasks, like paying her utility bill that became overdue while she was hospitalized,” Singleton recalls. “Thankfully, she recovered enough to sign a POA when she was of sound mind. If not, I would have had to go through the expensive and time-consuming process of becoming her court-appointed guardian.”

This, Singleton notes, would have been a very difficult thing to do, because she would not have been able to pay for her mother’s bills and expenses on her own. She needed to have access to her mother’s funds in order to stay on top of every charge.

Power of Attorney Denied by Banks – Why?

So, here’s the rub: every caregiver who needs to access your finances needs either a POA or a court order in order to do so. But banks or financial institutions sometimes decline to accept a POA when it’s presented to them. Why? The simple answer is fear of fraud.

“Banks are on high alert for elder financial exploitation and scams; if there is a question about the validity of the POA, they may deny its use,” Singleton explains.

Here are some of the reasons Singleton has heard for why banks reject a POA:

• The POA doesn’t meet the state’s requirements for language or how it’s signed.
• The POA is extremely old. 
• The POA is not durable.
• The bank wants the person who signed the POA or the agent or both to appear in person at the bank to use the document.
• The bank wants the account holder to use the bank’s own POA form.
• The bank wants additional documentation from the agent.

Clarify Why Your Power of Attorney Was Denied

“It can be exceedingly frustrating for a bank to disregard a POA, especially if they are wrongfully rejecting it,” Singleton writes. But there are a few steps you can take if this happens to you.

The first thing to do is ask the bank or financial institution for the reason they’re not accepting the POA in writing. Then, look up the law in your state. “There may be procedures and time frames that a bank must follow when it decides to reject a POA. Learn what the bank is required to do in these circumstances,” Singleton writes.

It’s important to note that all state laws are different; the document you’re using may not comply with requirements at the bank’s location. “Some states may require a raised seal from a notary or the agent to sign the POA,” Singleton adds. “This is why it’s so important for everyone to update their documents — especially the POA — if they move states of residence.”

The age of the POA is another consideration. If it’s many years old, it might be considered “stale”, or ineffective. The laws might have even changed since the POA was originally signed, or the document may not have the necessary language for the bank to see it as valid. “It’s important to update a POA periodically, so long as the POA maker is capable of making a legal document,” Singleton explains. “If the POA maker is incapacitated (meaning they’re physically or mentally unable to make decisions or do things for themself), then they can’t — and shouldn’t — make any new legal documents.”

Another important word to learn is “durability”, which simply means that a document can be used even if the original maker is incapacitated. “When a person makes a durable POA, the document is intended to let their agent do the job even if the maker is no longer of sound mind. Without the durable part, the agent won’t be able to use the document after the maker loses capacity due to dementia or other medical issues,” Singleton writes.

And lastly, the bank may require that the POA maker and/or the agent appear in person at the bank for a request. Illness or mobility issues could prevent this from being possible. Singleton advises, “It is always wise to have an alternate agent listed in the POA who could step in if needed. If that’s not feasible, the bank needs to be informed why the agent can’t appear and a doctor’s note should be provided to explain the POA maker’s limitations.”

Power of Attorney Denied: When to Escalate

As frustrating as all of this can be, at least some credit is due to the financial institutions. A lot of the time, a request for additional information by the bank before a POA can be used is rooted in security and protection for all concerned. Sometimes, for example, banks might require a doctor to certify that a POA maker is unable to handle their own affairs. It’s a frustrating hurdle, but much more secure than the alternative. 

“However,” Singleton writes, “even if the bank says they want the account holder to use one of the bank’s power of attorney forms, they still should not reject a POA that is legally effective and has the correct language giving the agent the right to conduct banking transactions for the maker.”

Because of this, Singleton suggests requesting that the bank escalate the issue with the POA document to its legal or document review departments. You might also want to reach out to the attorney who prepared the document originally.

“If the bank is seeking the opinion of any in-house legal counsel about the POA, your attorney can assist with communicating with their counsel or bank representatives,” Singleton explains. “Your attorney may also formally record the document in the county and present the certified copy of it to the bank with a letter verifying the validity of the POA.”

Plan Ahead to Avoid Having Power of Attorney Denied

Here at AgingOptions and Life Point Law, you know we love a good suggestion to plan ahead, and Singleton lands her article on this point.  “Before you run into trouble with a bank rejecting a POA during an intensive caregiving time, the maker and agent may want to visit the bank while everyone is healthy and doing well,” she writes. “You can ask that the bank put the POA on file and double check that it meets the bank’s requirements for approval.  You should also call around to the local branches and confirm the information that they would request to see to access an account using a POA.”

And be ready to stand your ground, too. If the POA is valid, still in effect, and genuine, then there should be no reason for the bank to refuse it. “Know that there can be legal consequences if a bank wrongfully refuses a power of attorney; they may be liable for your attorney’s fees and costs if you have to fight them to recognize it,” Singleton concludes.

Our associates at Life Point Law stand ready to assist you with answers to questions about various types of power of attorney documents. Please contact us and let us help.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.aarp.org)