SAVVY SENIOR
Choosing an appropriate walking cane

 

May 3, 2016

Jim Miller


Dear Savvy Senior,

I have severe arthritis in my knee and could use a walking cane to help me get around. Is there anything I should know about canes before I buy one? 

Limping Linda
 

Dear Linda,

When it comes to choosing a cane for balance and support most people donít give it much thought, but they should. Walking canes come in hundreds of different styles, shapes and sizes today, so you need to take into account your needs and preferences to ensure you choose one thatís appropriate for you. Here are some tips that can help.

 

Types of Canes

The first thing you need to consider is how much support you need. That will help you determine the kind of cane you choose. The three basic types of canes youíll have to choose from include:

1. Straight canes: These are basic, single point canes that typically incorporate a rounded ďcrookĒ handle or ďL-shapedĒ ergonomic handle. Usually made of lightweight aluminum or wood, most of the aluminum models are adjustable in height and some even fold up.

2. Offset-handle canes: These also are single point straight canes, but come with a swan neck curve in the upper part of the shaft that puts the userís weight directly over the cane tip for added stability. These canes are typically aluminum, adjustable-height and come with a flat, soft grip handle thatís easy on the hands.

Both straight canes and offset-handle canes are best suited for people who have a slight walking impairment.

3. Quad canes: Also called broad based canes, these work best for people who need maximum weight bearing and support. Quad canes comes with four separate tips (some have three tips) at the base, they usually have an offset flat handle, and can remain standing when you let go of it which is very convenient.

 

Fitting the Cane

Once you decide on the type of cane, you need to make sure it fits. Stand up with your arms hanging straight down at your side. The top of the cane should line up with the crease in your wrist, so your arm is slightly bent at the elbow when you grip the cane.

The cane should also have a rubber tip at the bottom to prevent slipping. A worn or torn rubber tip is dangerous, so check the tip frequently to ensure itís in good condition and replace it when necessary. Rubber tips come in different sizes depending on the shaft diameter, and can usually be purchased in multipacks at your local pharmacy.

The grip is also very important, so choose one thatís ergonomically designed, or one that has a molded rubber or foam grip thatís comfortable to hold on to.

And if you travel much, consider getting a folding cane that can be packed or stored away easily.
 

How to Use

When using a cane, it should always be held in the hand opposite of the leg that needs support. For example, if your knee pain is on your left side, you should use the cane in your right hand. The cane should then move forward as you step forward with the bad leg.

If you have to go up stairs, you should lead with the good leg. And when you go down stairs, you should put your cane on the step first and then step down with your bad leg.

The Mayo Clinic offers a slide show at mayoclinic.com/health/canes/HA00064 that will show you how to choose and use a cane. Itís also a smart idea to work with a physical therapist.
 

Where to Buy

You can buy canes at drugstores, discount retailers, medical supply stores and online, usually between $10 and $50. Youíll also be happy to know that Medicare covers canes with a written prescription from a physician.

 

 

How to downsize your stuff for a move
April 27, 2016


Dear Savvy Senior,

Can you offer any helpful tips for downsizing? My husband and I are interested in moving to a condo downtown when we retire, but we need to get rid of a lot of our personal possessions before we can move. Weíve lived in the same house for almost 35 years and have accumulated tons of stuff.

Feeling Overwhelmed
 

Dear feeling,

The process of weeding through a house full of stuff and parting with old possessions can be difficult and overwhelming for many people.

A good place to start the downsizing process is to give your unused possessions away to your kids or grandkids. You can give up to $14,000 per person per year before youíre required to file a federal gift tax return, using IRS Form 709. Beyond that, here are a few other tips and services that may help you.

 

Sell It

Selling your stuff is one way you can downsize and pad your pocketbook at the same time. Some other popular selling options are consignment shops, garage sales and estate sales.

Consignment shops are good for selling old clothing, household furnishings and decorative items. You typically get half of the final sale price. Garage sales are another option, or for large-scale downsizing you could hire an estate sale company to come in and sell your items. Some companies will even pick up your stuff and sell it at their own location - they typically take about 40 percent of the profits. 

Or, if youíre willing, online selling at sites like Craigslist, eBay and Amazon are another way to make top dollar for your stuff. Craigslist.org is a huge classified ads site that lets you sell your stuff for free. While eBay.com and Amazon.com takes a cut of your sale - roughly 10 to 15 percent. Or, if you donít want to do the selling yourself, eBay offers a valet service (sellforme.ebay.com) to do it for you, for 20 to 40 percent of the selling price.
 

Donate It

If you itemize on your tax returns, donating your belongings is another way to downsize and get a tax deduction. Goodwill (goodwill.org, 800-741-0186) and the Salvation Army (satruck.org, 800-728-7825) are two big charitable organizations that will come to your house and pick up a variety of household items, furnishings and clothing.

If your deduction exceeds $500, youíll need to file Form 8283, ďNoncash Charitable ContributionsĒ (irs.gov/pub/irs-pdf/f8283.pdf). Youíll also need a receipt from the organization for every batch of items you donate, and will need to create an itemized list of the items you donated. To calculate fair market value for your stuff, use the Salvation Armyís donation guide at satruck.org/home/donationvalueguide, or the free program ďItís DeductibleĒ at turbotax.intuit.com/personal-taxes/itsdeductible.

 

Trash It

If you have a lot of junk you want to get rid of, contact your municipal trash service to see if they provide bulk curbside pickup services. Or, depending on where you live, you could hire a company like 1-800-Got-Junk (1800gotjunk.com, 800-468-5865) or Junk-King (junk-king.com, 888-888-5865) to come in and haul it off for a moderate fee.

Another good disposal option is Bagster (thebagster.com, 877-789-2247) by Waste Management. This is a dumpster bag that you purchase for around $30, fill it to a limit of 3,300 pounds and schedule a pickup, which costs an average of $140 but varies by area.

 

Enlist Help

You can also hire a professional senior move manager (nasmm.org, 877-606-2766) to do the entire job for you. These are organizers who will sort through your stuff and arrange for the disposal through an estate sale, donations or consignment. Or, you can hire a professional organizer through the National Association of Professional Organizers at napo.net. Organizers may charge $30 to $80 per hour or by the project.





When Does it Pay to Take Social Security Early?  
April 21, 2016


Dear Savvy Senior,

I will turn 62 in a few months and am trying to decide when to start taking my Social Security retirement benefits. Almost everything I read on this topic tells me itís better to wait until my full retirement age or beyond. Is there ever a good reason to start early?

Ready to Retire
 

Dear Ready,

Youíre right! Most financial planners agree that waiting to take your Social Security retirement benefits is a smart financial move. Why? Because each month you defer, from your 62nd birthday to your 70th, your monthly benefits grow. That adds up to around 6 to 8 percent higher payments for every year you delay.

Yet despite the financial incentive to wait, most people (58 percent of men and 64 percent of women) claim their benefits before full retirement age, which is currently 66 for those born between 1943 and 1954.

But speeding up the clock isnít always a bad idea. Here are some scenarios where it may make sense for you to collect early.
 

- You need the money: If youíre retired and donít have enough savings or a pension to cover your living expenses, youíll probably have to start early. But, if you decide to work, be aware of the earnings test.

If you claim Social Security benefits before full retirement age (and you donít reach 66 this year), youíll forfeit $1 for every $2 you earn over the earnings limit of $15,720 in 2016. It usually doesnít make sense to take benefits early if youíre working, unless your income is below the earnings limit.

- You have poor health: Having a serious medical problem that is likely to shorten your life is another reason to start your benefits sooner rather than later.

Consider the ďbreakeven pointĒ - the age you need to reach to come out ahead by waiting to claim Social Security - is 78 for someone who claims at 62 versus waiting to 66. If you donít anticipate making it to 78, go ahead and claim early.

However, if you are married or have other dependents at home that depend on your benefit, you may want to hold off because starting early will reduce their survivorís benefits.

- Youíre a lower-earning spouse: If youíre married and your lifetime earnings are much lower than your spouseís, you could take your benefit early but your higher-earning spouse should delay. This lets you increase your household income now, while the higher-earning spouseís benefit grows, therefore increasing the survivor benefit.

This strategy is best suited when a lower-earning wife is three to six years younger than her husband and her earnings are 30 to 40 percent of his. She should claim at 62 and he should claim at full retirement age, or better yet wait to age 69 or 70. Because the husband is likely to die earlier, the wifeís reduced benefit will be temporary and she will then qualify for the higher survivor benefit.

- Skeptical of Social Security: Many people take their retirement benefits early because they fear Social Security will go bankrupt, but this not a good reason to start collecting early.

While it is true that the Social Security trust fund will become insolvent around 2033 - 17 years from now - if no changes are made, that doesnít mean there will be no more money for benefits. It means that the fund is no longer taking in enough money to cover all promised benefits. Thus payment checks are likely to end up shrinking by about 25 percent.

But, if the thought of losing out on your benefits keeps you up at night, then it may be better to start claiming early instead of holding off for more later.

To see how much your benefits will be affected by your claiming age, use the Consumer Financial Protection Bureauís new Planning for Retirement tool at consumerfinance.gov/retirement/before-you-claim.

 


Auto insurance discounts for older drivers       
  
April 13, 2016


Dear Savvy Senior,

Iíve read that many car insurance companies offer a variety of discounts to older drivers when they retire or reach a certain age. What can you tell me about this?

Discount Seeker
 

Dear Seeker,

Most auto insurance companies offer policyholders a wide variety of discounts, many of which can benefit retirees. Auto insurers love older drivers because theyíre experienced behind the wheel and they drive less than younger age groups, which makes them a lower risk for accidents and a safer bet for insurance companies.

While discounts will vary by insurer, many of these benefits can reduce your overall premium by 15 to 20 percent or more, and you are usually allowed to combine discounts to increase your savings, though total discounts are often capped at around 25 percent.

To find out what discounts may be available to you, contact your auto insurer and inquire about these benefits, and any others that may benefit you.
 

- Age discount: Many auto insurance companies offer a general ďseniorĒ discount that will reduce your premium just because youíve reached a specific age. The actual name and amount of the discount will vary by insurer.

Allstate, for example, provides a ďsenior adult discountĒ of up to 10 percent to drivers who are at least 55 years old and arenít actively looking for full-time work. And Liberty Mutual offers a ďnewly retired discountĒ to drivers who reach that employment milestone, regardless of age.

- Low-mileage discount: Most insurers offer discounts to customers who drive limited miles each year, which is often beneficial to retirees who drive less because they donít commute to work every day. The fewer miles you drive, the lower your odds of getting into an accident.

The parameters of low-mileage differ by insurer, but generally about a 10 percent discount is available for driving less than 5,000 to 8,000 miles each year, although smaller discounts may also be available to seniors who drive more than this but less than 15,000.

- Drivers Ed discount: Many states require insurance companies to offer ďdefensive-drivingĒ discounts to drivers who take a refresher course to brush up on their safety skills. The discounts vary usually ranging between 5 and 15 percent.

Driver safety courses are inexpensive, usually costing around $20 to $30 and can often be taken in a classroom or online. To locate a class contact your local AAA (aaa.com), which operates a Driver Improvement Course for seniors, or AARP (aarp.org/driversafety, 888-227-7669), which offers the Smart Driver Course to members and non-members.

- Club member discount: Insurers offer discounts to members of clubs and associations with which they have partnered. These could include professional associations, workersí unions, large employers or membership organizations such as AAA, the National Active and Retired Federal Employees Association, the Seniors Coalition, AARP, etc. You could even qualify for savings based on the college you attended or the fraternity or sorority you belonged to decades ago.

- Safe-driving discount: Many insurance providers now offer discounts based on how and when you use your car. To do this, they would place a diagnostic device in your car that transmits wireless data on how you drive (including how fast youíre going and how hard youíre braking), when you drive and how much you drive. Drivers are rewarded for safe driving, low mileage and for not driving late at night. 

In addition, many insurance providers also offer discounts to drivers who do not have any violations or accidents for three or more years.

 



Booster shots recommended for seniors      
  
April 6, 2016


Dear Savvy Senior,

I just turned 65 and would like to find out what types of vaccinations are recommended to Medicare beneficiaries, and how they are covered.

Health Conscious

 

Dear Conscious,

Most people think that vaccinations are just for kids, but adults, especially seniors who tend to have weaker immune systems, need their shots too. Hereís a rundown of what vaccines the Centers for Disease Control and Prevention (CDC) recommend for seniors 65 and older, and how theyíre covered by Medicare.

- Flu (Influenza): While you probably already know that flu shots are recommended every fall to all seniors, you may not know that those over 65 also have the option of getting a high-dose flu vaccine instead of a regular flu shot. This vaccine - known as the Fluzone High-Dose - has four times the amount of antigen as a regular flu shot does, which creates a stronger immune response for better protection. All annual flu shots are covered under Medicare Part B.

- Td/Tdap (tetanus, diphtheria, pertussis): A one-time dose of the Tdap vaccine, which covers tetanus, diphtheria and pertussis (whooping cough) is recommended to all adults. If youíve already had a Tdap shot, you should return to getting a tetanus-diphtheria (Td) booster shot every 10 years. All Medicare Part D prescription drug plans cover these vaccinations.

- Pneumococcal: This vaccine protects against pneumonia, which kills about 50,000 Americans each year. Itís now recommended that all seniors, 65 or older, get two separate vaccines - Prevnar 13 and Pneumovax 23 - at different times. Medicare Part B covers both shots if they are taken at least 11 months apart.

- Shingles (zoster): Caused by the same virus that causes chicken pox, shingles is a painful, blistering skin rash that affects more than 1 million Americans each year. All people over age 60 should get the Zostavax vaccine, even if theyíve had shingles before. All Medicare Part D prescription drug plans cover this one-time vaccination, but coverage amounts and reimbursement rules vary depending on where the shot is given. Check your plan.

- Varicella (chickenpox): If youíve never had the chicken pox, this two-dose vaccine (called Varivax) is recommended to adults, and is also covered by Medicare Part D plans.

- Hepatitis A: This is a two-dose series of shots recommended to adults that have chronic liver disease, a clotting-factor disorder, have same-sex male partners, illicit injectable drug use, or who have close contact with a hepatitis A-infected individual or who travel to areas with a high incidence of hepatitis A. These shots are covered by Medicare Part D drug plans.

- Hepatitis B: This three-dose series is recommended to adults who are on dialysis, have renal disease or liver disease, are sexually active with more than one partner, have a sexually transmitted disease or HIV. These vaccinations are covered under Medicare Part B.

- Meningococcal: Adults 56 and older, who have had their spleen removed, have certain blood deficiencies or plan to travel to parts of the world where meningitis is common, should receive the meningococcal polysaccharide vaccine. This is covered by Medicare Part D.
 

To help you get a handle on which vaccines are appropriate for you, take the CDCís What Vaccines Do You Need? quiz at www2.cdc.gov/nip/adultimmsched. Also, talk to your doctor during your next visit about what vaccinations you should get.

If you canít remember which vaccines youíve already had, check with your past doctors to see if they have any records, or contact your stateís health department. Some agencies have vaccination registries (see vaccineinformation.org/state-immunization-programs) that may help you.

If you canít locate your records, your doctor can give you blood tests to see if youíre immune to certain vaccine-preventable diseases. Or, they may just give you the shot. Itís safe to repeat vaccines, according to the CDC.

 

 

The Consequences of Dying Without a Will     

March 23, 2016
 


Dear Savvy Senior,

What will happen to my money and possessions if I die without a will?

Getting Old

Dear Getting,

If you die without a will, what happens to your assets will be determined by the state you reside in. Every state has intestacy laws in place that parcel out property and assets to a deceased personís closest relatives when thereís no will or trust. But these laws vary from state-to-state.

A good resource to help you find out how your state works is About.comís Wills and Estate Planning site, which provides a state-by-state breakdown of how your estate would be distributed if you die without a will. See StateIntestacyLaws.com for a direct link to this page.

In the meantime, here is a general (not state specific) breakdown of what can happen to a personís assets, depending on whom they leave behind.  

- Married with children: When a married person with children dies without a will, all property, investments and financial accounts that are ďjointly ownedĒ automatically goes to the surviving co-owner (typically the spouse or child), without going through probate, which is the legal process that distributes a deceased personís assets.

But for all other separately owned property or individual financial accounts, the laws of most states award one-third to one-half to the surviving spouse, while the rest goes to the children.

- Married with no children or grandchildren: Some states award the entire estate to the surviving spouse, or everything up to a certain amount (for example the first $100,000). But many other states award only one-third to one-half of the decedentís separately owned assets to the surviving spouse, with the remainder generally going to the deceased personís parents, or if the parents are dead, to brothers and sisters.

Jointly owned property, investments, financial accounts, or community property automatically goes to the surviving co-owner.

- Single with children: All state laws provide that the entire estate goes to the children, in equal shares. If an adult child of the decedent has died, then that childís children (the decedentís grandchildren) split their parentís share.

- Single with no children or grandchildren: In this situation, most state laws favor the deceased personís parents. If both parents are deceased, many states divide the property among the brothers and sisters, or if they are not living, their children (your nieces and nephews). If there are none of them, it goes to the next of kin, and if there is no living family, the state takes it.

 

Make a Will

To ensure your assets go to those you want to receive them, you need to create a will. If you have a simple estate and an uncomplicated family situation, there are several good do-it-yourself resources that can help you for very little money.

One of the best is the Quicken WillMaker Plus 2016 software (available at nolo.com) that costs $55, works with Windows personal computers and is valid in every state except Louisiana. If you use a Mac, they offer an online will maker for $35.

If, however, you want or need assistance or if you have a complicated financial situation, blended family or have considerable assets, you should hire an attorney. An experienced attorney can make sure you cover all your bases, which can help avoid family confusion and squabbles after youíre gone.

Costs will vary depending on where you reside, but you can expect to pay anywhere between $200 and $1,000 for a will.

The National Academy of Elder Law Attorneys (naela.org) and the National Association of Estate Planners and Councils (naepc.org) are good resources that have online directories to help you find someone in your area.

If money is tight, check with your stateís bar association (see findlegalhelp.org) to find low-cost legal help in your area. Or call the Eldercare Locater at 800-677-1116 for a referral.

 

 

Elder Mediation Can Help Families Resolve Caregiving     
March 23, 2016
 

Dear Savvy Senior,

Are there any services that you know of that help families resolve caregiving conflicts? My mother - who just turned 82 - recently had a stroke, and to make matters worse, my two siblings and I have been perpetually arguing about how to handle her caregiving needs and finances.

Bickering Siblings

 

Dear Bickering,

Itís not unusual when adult children disagree with each other regarding the care of an elder parent. If your siblings are willing, a good possible solution is to hire an ďelder care mediatorĒ who can help you work through your disagreements peacefully. Hereís what you should know.
 

Elder Mediation

While mediators have been used for years to help divorcing couples sort out legal and financial disagreements and avoid court battles, elder care mediation is a relatively new and specialized service designed to help families resolve disputes that are related to aging parents or other elderly relatives.

Family disagreements over an ill or elderly parentís caregiving needs, living arrangements, financial decisions and medical care are some of the many issues that an elder care mediator can help with. But donít confuse this with family or group therapy. Mediation is only about decision-making, not feelings and emotions.

The job of an elder mediator is to step in as a neutral third party to help ease family tensions, listen to everyoneís concerns, hash out disagreements and misunderstandings, and help your family make decisions that are acceptable to everyone.

Good mediators can also assist your family in identifying experts such as estate-planners, geriatric care managers, or health care or financial professionals who can supply important information for family decision making.

Your family also needs to know that the mediation process is completely confidential and voluntary, and can take anywhere from a few hours to several meetings depending on the complexity of your issues. And if some family members live far away, a conference or video call can be used to bring everyone together.

If youíre interested in hiring a private elder care mediator, you can expect to pay anywhere from $100 to more than $500 per hour depending on where you live and who you choose. Or, you may be able to get help through a nonprofit community mediation service which charges little to nothing.
 

Finding a Mediator

To locate an elder mediator, start by contacting your area aging agency (call 800-677-1116 to get your local number), which may be able to refer you to local resources, or search online at Mediate.com. Another good option is the National Association for Community Mediation website (nafcm.org), which can help you search for free or low-cost community-based mediation programs in your area.

Unfortunately, there is currently no formal licensing or national credentialing required for elder mediators, so make sure the person you choose has extensive experience with elder issues that are similar to what your family is dealing with. Also, be sure you ask for references and check them. Most elder mediators are attorneys, social workers, counselors or other professionals who are trained in mediation and conflict resolution.






How retirees can save on prescription eyeglasses  
March 16, 2016


Dear Savvy Senior,

What tips can you recommend for finding affordable prescription eyeglasses? I used to have vision insurance through my work, but lost it when I turned 65, retired, and signed up for Medicare.

Looking For Eyeglasses

 

Dear Looking,

Prescription eyeglasses today arenít cheap. You can easily spend $200 for a basic pair, but if you want designer frames or need bifocal or progressive lenses the price can more than double. Here are a few different options that can help you save.

 

Medicare/Insurance Coverage

If you are a Medicare beneficiary, you already know that original Medicare (Part A and B) and Medigap supplemental policies do not cover routine eye exams or eyeglasses (unless youíve just had cataract surgery), but there are some Medicare Advantage (Part C) plans that do.

Many of these plans, which are sold through private insurance companies, cover vision as well as dental, hearing and prescription drugs, in addition to all of your hospital and medical insurance. To locate Advantage plans in your area that provides vision coverage, visit Medicare.gov/find-a-plan or call 800-633-4227. But before enrolling in a plan, check the benefit details to ensure the planís vision coverage includes routine eye exams, eyeglass frames and lenses.

You can switch from original Medicare to a Medicare Advantage plan each year during the open enrollment period, which is between Oct. 15 and Dec. 7.

If, however, you donít want a Medicare Advantage plan, you can still get coverage by purchasing an inexpensive vision insurance policy - see eHealthInsurance.com. Policy costs vary depending on where you live, but they usually start at around $6 to $9 per month for an individual. Before signing up, make sure your savings potential is worth the cost of the premiums and copays.

 

Discount Stores

Purchasing eyeglasses from discount retailers is another way to save. Costco is one of the best discount stores for good eyewear and low prices. Eyeglasses cost an average of around $150, but to shop there you have to pay a $55 annual membership fee. Some other good retail options for low prices include For Eyes Optical, BJís Optical, Samís Club and Walmart.

You also need to find out if you are eligible for any discounts. Many retailers provide discounts to membership groups like AARP and AAA. AARP members, for example, can get 30 percent off a pair of prescription eyeglasses as well as discounts on eye exams at any LensCrafters, most participating Pearle Vision, Sears Optical, Target Optical, JCPenney Optical and thousands of private optometrist offices.
 

Look Online

Buying eyeglasses online can also offer huge savings. Some online stores like ZenniOptical.com, Goggles4u.com and EyeBuyDirect.com sell prescription eyeglasses for as little as $7 plus shipping. These sites let you upload a photo of your face, so you can see what youíd look like in different frames.

Or, for a fancier choice of frames see WarbyParker.com, which offers single-vision glasses for $95. They even offer a free program where you can request up to five pairs to try on at home for five days.

To purchase glasses online, youíll need your eyeglass prescription from a local eye doctor, plus your pupillary distance number, which is the distance, measured in millimeters, between the centers of your pupils in each eye.
 

Low-Income Assistance

If your income is low, depending on where you live, there may be some local clinics that provide free or discounted eye exams and eyeglasses. Put in a call to your local Lions Club to see whatís available in your area. See directory.lionsclubs.org for contact information.

You may also be able to get free eyeglasses through New Eyes (new-eyes.org, 973-376-4903), a nonprofit organization that provides free eyeglasses through a voucher program to people in financial need.

 



How to Avoid Medicare Mistakes When Youíre Still Working    
  
March 9, 2016


Dear Savvy Senior,

Should I enroll in Medicare at age 65 if Iím still working and have coverage through my employer?

Almost 65
 

Dear Almost,

The rules for enrolling in Medicare can be very confusing with all the different choices available today. But when you postpone retirement past age 65, as many people are doing, it becomes even more complicated.

First, letís review the basics. Remember that original Medicare has two parts: Part A, which provides hospital coverage and is free for most people. And Part B, which covers doctorís bills, lab tests and outpatient care. Part B also has a monthly premium of $104.90 in 2016 (though itís higher for individuals earning $85,000 or more a year).

If you are receiving Social Security, you will be enrolled automatically in parts A and B when you turn 65. If you arenít yet receiving Social Security, you will have to apply, which you can do online at SSA.gov/medicare, over the phone at 800-772-1213 or through your local Social Security office.

If you plan to continue working past the age of 65 and have health insurance from your job, your first step is to ask your benefits manager or human resources department how your employer insurance works with Medicare. In most cases, you should at least take Medicare Part A because itís free. But to decide whether to take Part B or not will depend on the size of your employer.
 

 - Small employer: If your current employer (or spouseís employer if itís providing your coverage) has fewer than 20 employees, Medicare will be your primary insurer and you should enroll in Medicare Part B during your initial enrollment period. This is a seven-month period that includes the three months before, the month of, and the three months after your 65th birthday.

If you miss the seven-month sign-up window, youíll have to wait until the next general enrollment period, which runs from Jan. 1 to March 31 with benefits beginning the following July 1. Youíll also incur a 10 percent penalty for each year you wait beyond your initial enrollment period, which will be tacked on to your monthly Part B premium.
 

- Large employer: If your employer has 20 or more employees, your employerís group health plan will be your primary insurer as long as you (or your spouse if the coverage is from his/her employer) remain an active employee. If this is the case, you donít need to enroll in Part B when you turn 65 if youíre satisfied with the coverage you are getting through your job. But if you do decide to enroll in Medicare, it will supplement your employer insurance by paying secondary on all of your claims.

Once your employment (or group health coverage) ends, you will then have eight months to sign up for Part B without a penalty. This is known as the Special Enrollment Period.
 

- Drug coverage: You also need to verify your prescription drug coverage. Call your benefits manager or insurance company to find out if your employerís prescription drug coverage is considered ďcreditable.Ē (Creditable prescription drug coverage is one that is considered to be as good as or better than the Medicare prescription drug benefit.) If it is, you donít need to enroll in a Medicare Part D prescription drug plan. If it isnít, you should purchase a plan (see medicare.gov/find-a-plan) during your initial enrollment period or youíll incur a premium penalty (1 percent of the average national premium for every month you donít have coverage) if you enroll later.

For additional help, visit Medicare.gov or contact your State Health Insurance Assistance Program (SHIP) at Shiptacenter.org. The Medicare Rights Center also offers a free helpline at 800-333-4114.



 



Make Long-Term Care Coverage More Affordable     
  
March 2, 2016


Dear Savvy Senior,

I have been thinking about getting a long-term care insurance policy, but have found the monthly premiums to be very expensive. How can I find cheaper coverage?

Getting Old       
 

Dear Getting,

Cost is usually the biggest factor that keeps most people from purchasing long-term care insurance - only around 8 million Americans currently have a policy.

Depending on your age, health, and the provisions of the policy, costs can range anywhere from $1,000 up to $5,000 a year for an individual policy that covers nursing home care, assisted living and in-home care. Fortunately, there are various cost-cutting strategies that can help you save and still get adequate coverage. Here are several to consider:

- Buy young: The most basic way to get long-term care insurance at a cheaper rate is by purchasing it at a younger age. For example, a typical policy that costs a 55-year-old $1,500 a year in premiums could cost a 65-year-old $3,000. Health is another fact that can affect costs. While good health can lower your monthly payments, having a preexisting medical condition can increase your costs, or you may not be able to get insurance at all.

- Sign up as a pair:  Many insurers offer 20 to 30 percent discounts on premiums if you sign-up at the same time as your spouse, partner or sibling.

- Choose a shorter benefit period: Most people need long-term care for just under three years on average. So, by choosing a policy that covers you for two or three years, versus five or more years, it can cut your premiums by 20 to 40 percent.

- Lengthen the time you pay: Most policies have 30 to 90-day waiting periods that require you to pay out-of-pocket for care before the policy kicks in. By choosing a longer wait period, it can lower your premiums 15 to 20 percent.

- Lower the daily benefit: You can get a policy that pays out $100, $150, $200 per day or more, but the higher the benefit, the higher your premium. So consider a plan that covers two-thirds the daily cost, and pay the other third out of savings. That could cut your premiums by about one-third.

- Buy lower inflation protection: Inflation coverage protects you from the rising costs of care. Five percent compounded annually has been a common practice in the industry but itís expensive. Consider a policy that has a 3 percent CPI-adjusted inflation protection. This can save you 50 percent or more.

- Get state help: Currently, 41 states have a long-term care partnership program that can help you save too. Under these programs, if you buy a long-term care policy approved by your state Medicaid agency, you can protect an amount of assets from Medicaid equal to the benefits that your policy pays out. With this program, you can choose a shorter benefit period, which will lower your premiums. See aaltci.org/partnership to learn more.

- Buy a hybrid policy: If the thought of paying expensive monthly premiums for long-term care insurance - which you may never use - is keeping you from buying a policy, consider one that combines long-term care insurance with either a life insurance policy or an annuity. Hybrid life insurance policies provide a death benefit for your heirs and a pool of money you can use for long-term care. Any funds you use for care are generally subtracted from the death benefit. While hybrid annuity policies generally allows you to purchase a deferred annuity, which can be used for long-term care or if you donít need care, it can be redeemed for its accumulated value when it matures, or left to your heirs when you die.

To find a policy that offers the best rates, get a long-term care insurance specialist who works with a variety of companies. See aaltci.org to locate one. Also shop insurers like Northwestern Mutual and New York Life, who work only with their own agents.

 

 

2016 Tax Filing Requirements for Retirees      
  
Feb. 24, 2016


Dear Savvy Senior,

What is the IRS income tax filing requirements going to be for this tax season? Due to health problems I stopped working early last year, so Iím wondering if I need to file.

Unintended Retiree
 

Dear Unintended,

There are a number of factors that affect whether or not you need to file a federal income tax return this year including how much you earned last year (in 2015), and the source of that income, as well as your age and filing status.

Hereís a rundown of this tax seasonís IRS filing requirements. For most people, this is pretty straightforward. If your 2015 gross income - which includes all taxable income, not counting your Social Security benefits, unless you are married and filing separately - was below the threshold for your age and filing status, you probably wonít have to file. But if itís over, you will.

* Single: $10,300 ($11,850 if youíre 65 or older by Jan. 1, 2016).

* Married filing jointly: $20,600 ($21,850 if you or your spouse is 65 or older; or $23,100 if youíre both over 65)

* Married filing separately: $4,000 at any age.

* Head of household: $13,250 ($14,800 if age 65 or older).

* Qualifying widow(er) with dependent child: $16,600 ($17,850 if age 65 or older).

To get a detailed breakdown on federal filing requirements, along with information on taxable and nontaxable income, call the IRS at 800-829-3676 and ask them to mail you a free copy of the ďTax Guide for SeniorsĒ (publication 554), or see irs.gov/pub/irs-pdf/p554.pdf.
 

Special Requirements

There are, however, some other financial situations that will require you to file a tax return, even if your gross income falls below the IRS filing requirement. For example, if you had earnings from self-employment in 2015 of $400 or more, or if you owe any special taxes to the IRS such as alternative minimum tax or IRA tax penalties, youíll probably need to file.

To figure this out, the IRS offers an interactive tax assistant tool on their website that asks a series of questions that will help you determine if youíre required to file, or if you should file because youíre due a refund.

You can access this tool at irs.gov/filing - click on ďDo you need to file a return?Ē Or, you can get assistance over the phone by calling the IRS helpline at 800-829-1040. You can also get face-to-face help at a Taxpayer Assistance Center. See irs.gov/localcontacts or call 800-829-1040 to locate a center near you.
 

Check Your State

Even if youíre not required to file a federal tax return this year, donít assume that youíre also excused from filing state income taxes. The rules for your state might be very different. Check with your state tax agency before concluding that youíre entirely in the clear. For links to state tax agencies see taxadmin.org/state-tax-agencies.
 

Tax Prep Assistance

If you find that you do need to file a tax return this year, you can get help through the Tax Counseling for the Elderly (or TCE) program. Sponsored by the IRS, TEC provides free tax preparation and counseling to middle and low-income taxpayers, age 60 and older. Call 800-906-9887 or visit irs.treasury.gov/freetaxprep to locate a service near you.

Also check with AARP, a participant in the TCE program that provides free tax preparation at more than 5,000 sites nationwide. To locate an AARP Tax-Aide site call 888-227-7669 or visit aarp.org/findtaxhelp. You donít have to be an AARP member to use this service.

 


Choosing a Hospice Care Program         
Feb. 17, 2016


Dear Savvy Senior,

Can you offer any information on hospice care, how to choose a good provider, and whether Medicare covers it? My grandmother has terminal cancer and wants to die at home, if possible.

Grieving Granddaughter

 

Dear Grieving,

Hospice can be a wonderful option in the last months of life because it offers a variety of services, not only to those who are dying, but also to those left behind. Hereís what you should know.

 

What Hospice Offers

Hospice care is a unique service that provides medical care, pain management, and emotional and spiritual support to people who are in the last stages of a terminal illness - it does not speed up or slow down the process of dying. Hospiceís goal is to simply keep the patient as comfortable and pain-free as possible, with loved ones nearby until death.

The various services provided by a hospice program comes from a team of professionals that works together to accommodate all the patientsí end-of-life needs.

The team typically includes hospice doctors that will work with the primary physician and family members to draft up a care plan; nurses who dispense medication for pain control; home care aids that attend to personal needs like eating and bathing; social workers who help the patient and the family prepare for end of life; clergy members who provide spiritual counseling, if desired; and volunteers that fill a variety of niches, from sitting with the patient to helping clean and maintain their property.

Some hospices even offer massage or music therapy, and nearly all provide bereavement services for relatives and short-term inpatient respite care to give family caregivers a break.

Most hospice patients receive care in their own home. However, hospice will go wherever the patient is - hospital, nursing home or assisted living residence. Some even have their own facility to use as an option.

To receive hospice, your grandmother must get a referral from her physician stating that their life expectancy is six months or less.

Itís also important to know that home-based hospice care does not mean that a hospice nurse or volunteer is in the home 24 hours a day. Services are based on need and/or what you request. Hospice care can also be stopped at anytime if your grandmotherís health improves or if she decides to re-enter cure-oriented treatments.

 

How to Choose

The best time to prepare for hospice and consider your options is before itís necessary, so youíre not making decisions during a stressful time. There are more than 5,500 hospice programs in the U.S., so depending on where you live, you may have several options from which to choose.

To locate a good hospice in your area, ask your grandmotherís doctor or the discharge planner at your local hospital for a referral, call your state hospice organization (see hospicefoundation.org/hospice-directory for contact information), or search online at sites like the National Hospice and Palliative Care Organization at nhpco.org.

When choosing, look for an established hospice that has been operating for a few years and one that is certified by Medicare. To help you select one, the American Hospice Foundation provides a list of questions to ask at 16HospiceQuestions.us.

 

Who Pays

Medicare covers all aspects of hospice care and services for its beneficiaries. There is no deductible for hospice services although there may be a very small co-payment - such as $5 for each prescription drug for pain and symptom control, or a 5 percent share for inpatient respite care. Medicaid also covers hospice in most states, as do most private health insurance plans.

For more information, see the ďMedicare Hospice BenefitsĒ online booklet at medicare.gov/pubs/pdf/02154.pdf. And if you have financial questions or concerns, talk to your hospice provider. Most hospices offer financial assistance to help families in need.

 



How to Calculate Your Retirement Number     
  
Feb. 10, 2016


Dear Savvy Senior,

Can you help me calculate about how much my wife and I need to save for retirement? We are both in out late-50es and want to see where we stand.

Looking Ahead

 

Dear Looking,

Calculating an approximate number of how much youíll need to save for a comfortable retirement is actually pretty easy, and doesnít take long to do. Itís a simple, three-step process that includes estimating your future living expenses, tallying up your retirement income and calculating the difference. There are even a host of online calculators that can help you with this too.

 

Living Expenses

The first step is the most difficult - estimating your living expenses when you retire. If you want a quick ballpark estimate, figure around 75 to 85 percent of your current gross income. Thatís what most people find they need to maintain their current lifestyle in retirement.

If you want a more precise estimate, track your current living expenses on a worksheet and deduct any costs you expect to go away or decline when you retire, and add whatever new ones you anticipate.

Costs you can scratch off your list include work-related expenses like commuting or lunches out, as well as the amount youíre socking away for retirement. You may also be able to deduct your mortgage if you expect to have it paid off by retirement, and your kidís college expenses. Your income taxes should also be less.

On the other hand, some costs will probably go up when you retire, like health care, and depending on your interests you may spend a lot more on travel, golf or other hobbies. And, if youíre going to be retired for 20 or 30 years you also need to factor in the occasional big budget items like a new roof, furnace or car.

 

Tally Income

Step two is to calculate your retirement income. If you and/or your wife contribute to Social Security, go to ssa.gov/myaccount to get your personalized statement that estimates what your retirement benefits will be at age 62, full retirement age and when you turn 70.

In addition to Social Security, if you or your wife has a traditional pension plan from an employer, find out from the plan administrator how much you are likely to get when you retire. And, figure in any other income from other sources you expect to have, such as rental properties, part-time work, etc.

 

Calculate the Difference

The final step is to do the calculations. Subtract your annual living expenses from your annual retirement income. If your income alone can cover your bills, youíre all set. If not, youíll need to tap your savings, including your 401(k) plans, IRAs, or other investments to make up the difference.

So, letís say for example you need around $55,000 a year to meet your living expenses and pay taxes, and you and your wife expect to receive $30,000 a year from Social Security and other income. That leaves a $25,000 shortfall that youíll need to pull from your nest egg each year ($55,000 - $30,000 = $25,000).

Then, depending on what age you want to retire, you need to multiply your shortfall by at least 25 if you want to retire at 60, 20 to retire at 65, and 17 to retire at 70 - or in this case that would equate to $625,000, $500,000 and $425,000, respectively.

Why 25, 20 and 17? Because that would allow you to pull 4 percent a year from your savings, which is a safe withdrawal strategy that in most cases will let your money last as long as you do.

If you need some help, thereís a bevy of free online retirement calculators to assist you, like the ones offered by T. Rowe Price (troweprice.com/retirement) or Financial Mentor (financialmentor.com/calculator).

 

 

 

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