Monday, September 27, 2010

A tongue lashing on our "institutionalized and isolated elderly"

On Sunday, Sept. 26, I posted, on my “Major Issues” blog (see my Blogger Profile) some commentary on an article by Kwame Anthony Appiah in the Washington Post, where he analyzes what future generations will condemn us for. Point 3, about “the institutionalized and isolated elderly,” needs more comment. Appiah writes, after noting that 14000 elderly people died in France in 2003 during the massive early August heat wave, apparently alone or in institutions while their adult kids were vacationing, “ Is this what Western modernity amounts to -- societies that feel no filial obligations to their inconvenient elders?” No wonder it can incur wrath sometimes..

While Appiah notes that we have a world where nearly every adult has to work, usually in a different city, and has to “make it on his own”, it’s true that demographics – smaller families and the perceived cultural opportunities besides or superseding raising children – have an effect. So do modern notions of the “autonomy of self” – and the pattern of intermittent, transitory and partial or “functionable” intimacy encouraged by online social networking culture. That works well in a society where people are more “introverted” and tend to externalize themselves into work and expression (and who do not want relationships forced upon them by the needs of others, until they “choose” them, maybe by having children). But it also leaves behind a lot of people who grew up in more socialized cultures. Appiah notes that many poorer countries keep their extended families together, partly because economic opportunity to do otherwise is not available. To always do that in our culture, some people would have to "change."

On the other hand, the CCRC concept, where a senior downsizes and lives well and independently -- but somewhat alone – in a modern, secure apartment with amenities, easy public transportation and community social activities, with paid assistance available if needed – seems efficient, and a concept that the “free” marketplace can probably provide. It is not, however, “family” as many seniors understand it. The extended family that Appiah talks about is one that transcends personal (and individualized) choice and consent.

Thursday, September 23, 2010

Wells Fargo discusses how a "private bank" can help with estate settlement and elder geriatric care management

On Thursday, September 24, Wells Fargo held a gathering at Morton’s steakhouse in Reston, VA, where it discussed its “private bank” and presented “The 12 Wealth Management Issues”.

Much of this involves tax reduction strategy (in anticipation of the 2011 reversion) with gifting, insurance, and proper use of different kinds of IRA’s, including Roths, whose strategy changes frequently.

What was interesting was the subject of geriatric care management. The Bank can assist a family in finding the best care management services and of relieving adult children of some of the difficult issues that occur day to day. If is becoming more common for adult children to be in other cities when parents need long term care, and the need for LTC is increasing very rapidly. But often properly managed care also prolongs life by obtaining proper medical supervision.

A couple months ago, the New York Times had discussed the entry of banks into geriatric care management. Banks would be in a particularly good position to prevent improper comingling of elder’s funds.

The merger with Wachovia is proceeding slowly and carefully, affecting cities like Charlotte. In Minneapolis, the second tallest building in town, formerly Norwest, is Wells Fargo.

Wednesday, September 22, 2010

AOL advice on retirement planning for women: rely on other women for advice

Tara Nicholle-Nelson has a story on retirement planning for women today on AOL, “3 tips to help women close the retirement gap,” link here.

She recommends that women turn to other female professionals for financial planning services (one more reason I took a pass on this as a second career a few years ago). And she also notes that women live longer than men, and are more likely to have their “careers” interrupted (as by childbirth), so their “needs” are more pronounced. Start saving early, she says. Be prepared to take care of yourself. And take on the cultural wars.

Good morning (or good evening) Suze Orman. 

Tuesday, September 21, 2010

Michelle Bachmann (R-MN) apparently is calling for means testing of social security

The media is again reporting on another drive to gut social security (as announced in an AlterNet email yesterday). Michelle Bachmann, R-MN, has apparently called for cutting everyone under 60 or 55 (it’s not clear which) out completely, and possibly to means test those getting it now. Reports differ on the latter, as to whether those currently receiving benefits would be “safe”.  Could someone my age (67) suddenly be means tested?

Alternet wrote in the email (“They are coming to take your social security”) that everyone between 55-65 would be “means tested” according to a speech she gave in Las Vegas this summer. Only the needy would get it. Of course, she’s ignoring what we’ve written here before, that the FICA tax really is like an annuity policy premium, more or less. People, by and large, are collecting on what they (or their spouses) contributed.

It’s curious that I couldn’t find the story on the Alternet website (at least not quickly), only in the email. And it did come from Las Vegas. (Hint: look at the “BillBoushka” blog, Sept. 8.)

Here’s the Examiner’s story, by Maryann Tobin, from February, link.

The Reid Report says “the right has not given up on getting rid of social security (and Medicare) here  although that storyalso dates back to Februrary.

Rep. Boehner from Ohio has also suggested means testing.

One point is that the proposals for means testing or stopping social security are coming from the Right now despite the failure or conservative efforts to privatize, during the Bush years. In theory, Medicare could fall back on adult children, as could support for parents that came from social security (“family values”), but again, (most) seniors have earned some of their own retirement income and Medicare coverage with forced “payroll tax” contributions. Why doesn’t Bachmann (or Boehner) get this?

I still believe in the idea that you pay a contribution to your own retirement, that it’s yours, but that it is regulated in such a way that it must go (at least in part) into investments that don’t lose principal. I’m still with Cato on privatization.

Monday, September 20, 2010

Senior unemployment is leading to higher poverty rate

Mokoto Rich has a disturbing article from the New York Times, reprinted inMSNBC, “The new unemployables: workers over 50; educated, experienced, but facing record unemployment for their age group”

The article gives the story of a female auditor in Washington State let go at 57

The Census Bureau has already published interim survey figures showing that the poverty rate in the 55 to 64 age group increased to 9.4% in 2009, up from 8.6% in 2007.

One comment that older workers make is that they cannot compete with “the kids” because, staying in one industry or company too long, they did not get up to date computer programming skills. But this has already been a problem in information technology, as the mainframe job market became fragmented after 2000.

But companies have looked to seniors particularly for sales-like or mentoring jobs, such as becoming insurance agents or selling senior-related products like long term care insurance. But less extroverted seniors will indeed have difficulty with the job market if they could not keep up with the technology changes.

Saturday, September 18, 2010

State employees need massive pension reforms

The New York Times has carried some stinging columns this week on the sustainability of state employee pension funds, particularly an op-ed on Sept. 15 by Richard Riordan and Alexnader Rubalcava, link here , “How pensions can get out of the red”.

The op-ed suggests that Treasury could offer tax-free “pension protection” bonds to states that come clean, but the measures are painful and affect workers (including police and teachers, for example): raising retirement age, stopping defined benefit pensions for new employees and replacing them with 401(k)’s, and the like.

The on Saturday, Sept. 18, Mary Williams Walsh offered “The Illusion of Savings: Several states join Illinois in risky pension accounting” in the Business Section. The states included Rhode Island, Texas, Arkansas and Ohio.

Friday, September 17, 2010

New York Times has special section on Retirement; warnings about CCRC's, 2011 estate tax jump

The New York Times, on Thursday Sept. 16, 2010, had a complete “Special Section” called Retirement, featuring a sequence of time-lapse photos of a young man as he ages (face only; please don’t show the gams). (the basic link is here).

The lead story by Jennifer Saranon Schultz is “Looking ahead to the spend-down years” with talk of “decumulation”. Insurance companies offering annuities and employers with defined benefit pensions face the same problems as social security: rapidly increasing life spans (Fran Hawthorne: “Income until death do your annuity part”). And Jan Rosen has an article “Investing after a flight to safety.”

Hawthorne also talks about employers “hesitancy to restore those 401(k) matches” and John Wasik talks about the recent attention to excessive 401(k) fees (the “retail” vs. “investment “ class issue).

Deborah Jacobs, on p F6, has a segmented article “Devising strategies while the estate tax is in limbo”, which refers to the fact that, as things stand now, the estate tax exemption ceiling goes back down to $1 million on Jan 1 2011 unless Congress acts, and the incremental rate may be an Eisenhower-era like 55%. She suggests getting married, giveaways, and buying life insurance, all of which comport with "family values". She also discusses the GRAT, or guaranteed retained annuity trust.

Elizabeth Olson has a major piece “Concerns rise about continuing care enclaves”. Many CCRC’s (Continuing Care Retirement Communities) charge large entrance fees, partially refundable, but some of them have a tendency to use the fees for ongoing caregiving expensive. There is a concern that some of them could become financially unstable after having collected the fees.

Thursday, September 16, 2010

Major column on how Roth IRA's work available this morning

Michelle Singletary (“The Color of Money”) has an article in the Washington Post, Sept. 16, “Path to converting savings to Roth IRA’s is full of ‘ifs’”, link here.

The basic appeal of Roth IRA’s is that generally the withdrawals are not taxed. But taxes are paid upon deposit, but for some high wage earners entering retirement they make for effective financial strategy.

Singletary explains the changes that took place at the beginning of 2010, removing some income limits for converting a traditional 401(k) to Roth. But there is no “simple truth” as to how to use these. A financial planner or tax professional will have to run numbers and simulate your net worth in different scenarios.

The individual can try a do-it-yourself approach with calculators and software, such as here.

ING (Minneapolis) has an effective page on how Roth’s work here.

Massachusetts Mutual has a collection of calculators, including a Roth, (website url) here.

Wednesday, September 15, 2010

While on the road, in a diner, I get the "bad news" about my own PSA through my Blackberry

Well, yesterday (Tuesday), while “on the road”, and using my laptop wireless in a diner in central Pennsylvania, I got a Blackberry call from my doctor’s assistant about my fasting blood tests. I hate this business of a 12 hour fast to renew a prescription. Well, she told me my bad cholesterol was a little high, and not to eat red meat, eggs, milk etc (just as a cheeseburger was being served, with potato chips). And she told me my PSA, prostate specific antigen, was too high and that the family physician wanted me to see a urologist.

I couldn’t get a message down in the restaurant, and called back. I got the number as 5.22, ironic since I had been driving on US 522 in Pennsylvania. Normal is 0.1 to 4.00. I suppose that the amount of increase in the past 16 months, since the last test, is important.

I checked the National Cancer Institute’s page on the PSA test, which is here.

It seems that some elevated PSA’s mean nothing, and some indicate benign disease, and that most prostate cancers are very slow growing anyway. But a few are very malignant. My father died of prostate cancer on January 1, 1986, just before his 83rd birthday. But he was ill for only four weeks; his entire life was productive.

Some of the treatments would not be very acceptable to me.

Is a Blackberry a good device for getting personally troubling news?

Monday, September 13, 2010

Raising retirement age to save Social Security would hardship manual laborers

John Leland has a front page story in the New York Times Monday Sept. 13 that invokes notions of “class struggle”, maybe a shade of Michael Moore. The article is “Retiring Later Is Hard Road for Laborers”, link here.

The context is, of course, the proposals to bump up the retirement age to shore up social security, maybe stop early retirement. But the article points out that manual labor, especially that with rapid repetitive motion and regimentation, gets rapidly more difficult for workers in their 60s.  (They might include assembly line jobs [sometimes in risky places like poultry processing plants], or construction, or "pay your dues" kind of work like utility linemen.) And these workers generally started working earlier, in their teens (sometimes to support siblings or parents) than did the “professor types” drawing lines in the eldercare and retirement income debate.

Thursday, September 09, 2010

US News/Yahoo! go over Medigap and Medicare Advantage concepts

US News has a story ("It's Time to Review your Medicare Options"), by Philip Moeller, on Yahoo! that gives a summary of the different strategies people have for using Medicare once they reach age (65).

Some retired people have retiree insurance programs that continue past Medicare eligibility, to the point that they will get supplemental Part B as part of the retiree program. I did not; mine stopped at age 65. (Prescription drug Part D was offered, but it was much more expensive than that offered by AARP and UHC “privately”.)

People on their own must decide whether to use conventional Medicare and buy a Medicare supplemental policy (“Medigap”) which has many different variations identified by a letter code, or replace it all with Medicare Advantage.

The article discusses private Medicare Advantage programs which “replace” Medicare and include most of the supplementary coverage, and sometimes additional luxury coverages (cut back during the Obama healthcare reform). Medicare Advantage programs are a bit like HMO’s; Medigap is more like a PPO, inasmuch as you need to have a doctor who accepts Medicare.

In retirement (the baseball equivalent of "in relief"), I've gotten a couple of "invitations" to "sell" Medicare Advantage.  Sorry, I'm not a huckster.  I know it has been criticized as not always paying up to expectations. I like to maintain a "veneer" of objectivity.

I’ve noticed something else in my own circumstances. Family practice doctors sometimes bill more for visits to Medicare than some specialists.

Guess what. I have to have another physical tomorrow. Nothing to eat after midnight. They won’t renew a simple prescription without annual fasting blood tests. You can can’t get out of this. And Uncle Sugar pays.

Wednesday, September 08, 2010

"CNN Money" article talks about eldercare and "sacrifice"

CNN and Yahoo! Finance both ran a story from Money Magazine by MP Dunleavey, “4 Tips for Caring for Mom and Dad”, with a subtitle byline that certainly catches the eye: “Sacrificing to care for mom and dad”. The article has a graphic that says 48% used vacation hours to care for loved one, 38% stopped saving for the future, and 17% took on additional jobs or worked more hours. Presumably their parents did not have enough assets or had been able to prepare for old age themselves. But even with considerable assets, short and long distance caregiving can present many challenges.

The link for the story is here.

The article goes on to make some practical suggestions for long-distance caregiving, which often includes hiring a geriatric care manager (discussed here June 15). That could put the adult child in the position of having to “take orders” from the care manager. The articles also discusses setting up the necessary powers of attorney. Another instrument is the living trust. The adult children need to know what assets the parent has in a safe deposit box.

I cringe a bit when I see the word “sacrifice”, because (regardless of one’ faith-based interpretation) in the foreseeable future the word means just that. The person who sacrifices becomes, in some sense of his or her own reality, less than he or she was; this observation is almost tautological. Adult children should think very carefully about options. For the childless, moving back in may psychologically not be a good idea; the adult child may have more sense of control if the caregiving happens in his place. I think that Continuing Care Resource Communities are a promising idea and that market and demographic conditions will encourage investors to build many more of them, especially away from the Sun Belt in original communities.

The noun ("sacrifice") was discussed a lot in the eldercare class at a Sunday School of a local Arlington VA church (Trinity Presbyterian) in the fall of 2008.

Tuesday, September 07, 2010

A basic primer on heart Rx

Tuesday is Health Day in the Washington Post, and the work season on Sept. 7 opened with a primer on heart health, “Consumer Report Insights: The Do’s and Don’ts of caring for your heart” here.

For women especially, but sometimes for men too, the most dangerous warning signs are the vague ones: tightness (in the neck or jaw as much as the chest), and phantom pains in the shoulder or arm that should have been in the chest. Sharper pains, ironically, often are not heart –related (perhaps bowel or gall bladder).

The article gives the medical term for “balloon angioplasty”, that is, “percutaneous coronary intervention, usually with a stent”.

Male patients might not like the continuous and perhaps humiliating attention for heart disease, for example the shaving for holter monitors.

Remember, David Letterman went to the doctor one morning in January 2000, and that afternoon was wheeled into the OR for emergency coronary bypass surgery (and a quintuple, at that, although the number of bypassed coronary arteries bears little relation to the severity of disease). (With bypass surgery, they stop your heart, put you on a machine, and bring you back to life, Frankenstein style; they play God.) Letterman joined the zipper club, and not by choice. Esquire (“The Men’s Magazine) made a lot of it, in cartoon. He probably felt he had become a victim of a “bugcrush”. I would feel disfigured. So I used to tell coworkers, “never go to the doctor”. You might not come back to work. You might not go home.

And Dick Cheney, with his bypass before age 40,and his continuous problems since, now has a pump device that precludes even having a pulse. It’s scary how much doctors think they can do. “I do it because I can.” Libertarians ask, what happened to “personal responsibility” and health care costs.

Pictures: Hiking on Spruce Knob in W Va (4860 feet, 170 miles from Washington DC), ought to be heart healthy.

Thursday, September 02, 2010

Health care reform act does help early retirees, in two phases

The new health reform act contains a “bridge provision” whereby the Federal government can pay up to $5 billion in health care claims for early retirees from corporations, people from age 55-64 and too young for Medicare. The provision is supposed to help encourage companies to continue offering retiree health insurance until the federally subsidized health care exchanges, that would make retiree insurance more affordable, take over in 2014.

The news story appeared in the Washington Post on Sept. 1, by N.C. Aizeman, “2000 groups approved for early-retiree health-care funds, link here .

I had retiree health insurance with ING until I was 65. For about $160 a month I had coverage that would pay only 70% of inpatient hospital (although the rates would be discounted by United Health Care). Fortunately, I never needed to use it much (I had one MRI, which was covered at 50%, but discounted first by 75% by the UHC contract). The ability of large insurance carriers to arrange volume discounts with hospitals and providers is a big part of the picture.

Retiree health insuranc became a big issue in the 1980s as employers started offering "buyouts" to highly compensated employees in their 50s.  That's no longer sustainable.

Wednesday, September 01, 2010

Signs that your 401(k) is a "clunker": overuse of "retail classes" instead of "investment classes"

Check out this story in Daily Finance, “10 Signs Your 401(k) Plan is a Clunker”, by Daniel Solin, link here.

The most important symptom seems to be #5, “5. Retail share classes are in the plan when institutional classes are available”. A number of 401(k) plans, especially those from some employers, have been criticized for retail classes, which (while gratuitous) charge higher fees and seem to work to the advantage of the employer or financial planner at the expense of the investor.

Other bad signs are too many investment options, and plans dropping in and out of plans.

At work, it’s important to make sure that the money really has been deposited in your plan, particularly if you believe your employer could be headed for financial trouble.