The number of retired workers who began collecting Social Security benefits jumped by a record 19% in the 2009 fiscal year that ended Wednesday as aging Baby Boomers and the unemployed chose to retire early.  More than 2.6 million retired workers entered the Social Security system, up from 2.2 million in fiscal 2008. That's a much bigger increase than during past recessions.  "There are just not enough jobs for older people," says Richard Johnson, senior fellow at the non-partisan Urban Institute. "They have no choice but to go on Social Security."  The number of disabled workers receiving first-time benefits also soared to nearly 1 million, an increase of 100,000 over the previous year, according to Social Security Administration records.  Those two factors are putting new pressure on Social Security's finances. The program paid out $6 billion more in August than it took in. It's projected to run in the red for the next two years before returning to a surplus in 2012.  "We have the combination of more people filing for early retirement and disability benefits at the same time that we have a reduction in the size of the workforce," said Stephen Goss, Social Security's chief actuary.  The figures are affected both by the lengthy recession, which has sent unemployment to 9.7%, and by Baby Boomers who began reaching the early retirement age of 62 in 2008. 

Source:  USA Today (2 October 2009)
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There is no ‘miracle cure’ just around the corner for dementia. And yet while the number of people suffering from dementia is increasing rapidly, there is a widespread lack of understanding about what people with dementia are capable of doing. This report concludes that we need to do more as a society to enable people to live well with dementia. Currently, they are not getting the support and respect that they need.  This report presents an ethical framework to help those who face dilemmas in connection with the everyday care of someone with dementia. The framework forms the basis for a number of recommendations to policy makers in the following areas:  promoting autonomy and well-being through an ethical approach to dementia care; including people with dementia in society; aking decisions about the care and treatment of people with dementia; dealing with day-to-day ethical dilemmas in care; recognising the needs of carers; and research funding and participation.

Source:  Nuffield Council on Bioethics (1 October 2009)

ESTATE TAXES: What's a Taxpayer to Do?

After almost a decade of changes in the federal estate tax code, and many states changing their tax structure in response to the federal changes, clarity appears to be on the horizon. Congress's recently passed budget resolution would make the current estate tax rules permanent, taxing only estates over $3.5 million in value with the tax rate set at 45 percent. Although no actual legislation has yet been voted on, the nonbinding budget resolution sets guidelines for Congress to follow when writing tax and spending legislation later this year.

In light of this and other changes, taxpayers need to review their estate plans with the following issues in mind:


  1. Simplify if possible. The increase in the tax threshold from $600,000 at the beginning of the decade to $3.5 million today, coupled with the drop in most taxpayers' net worth over the past year, means that many people who had taxable estates no longer do. They may be able to significantly simplify more complicated estate plans that were necessary in the past to eliminate or decrease taxes due at death.


  2. But beware state tax laws. In the past, most states had very similar estate tax laws that were tied to the federal laws. As a result of changes in the federal estate tax, though, many states that were tied to the federal system found that their estate tax revenue was dropping to zero. To increase their revenue, these states "decoupled" and established their own estate tax plans. Taxpayers need to learn what the law is in their state and whether their existing plan is up to date. This is especially true for taxpayers who have moved from one state to another since signing estate planning documents.


  3. Review life insurance. All consumers should have their life insurance policies reviewed if they have had them for more than a few years. Some universal life policies that were based on projections made when the economy was stronger may be "underwater" and may need more robust premium payments to sustain them over the long term. With other policies where the premiums were based on old tables measuring life expectancy, the consumer may be able to lower her premium payments or increase the death benefit. Finally, consumers should never simply drop policies they no longer need or can afford. They may be giving up a large benefit for their heirs and they may be able to sell the policy for a larger return than the policy's cash surrender value.


  4. Refocus estate planning. The threat of the estate tax had the beneficial effect of prompting many consumers to do estate planning. But it also sometimes diverted them and their advisors from the real purpose of estate planning: to leave the legacy they want. The estate plan people leave can benefit children and grandchildren for decades to come, or it can cause familial strife that tears the family apart. The choice of executor and trustee and the terms under which heirs will receive property are vital issues that deserve your full consideration, regardless of whether taxes are an issue.

With the stigma of tattoos diminishing, more baby boomers are heading to tattoo salons to add colorful designs to their bodies.  "One of my best clients got his first tattoo after he retired," says Dan Conner, co-owner of Mid Air & Ink, a Des Moines tattoo studio. "He worked for the government and felt he couldn't do it then. He was 60 when he retired, and he really went nuts. But he had a great plan (for getting tattooed)."  Conner says he does a lot of tattoos for clients who are in their late 40s to mid-50s.  "With some, they felt it wasn't socially acceptable 15 or 20 years ago to get a tattoo," Conner says. "And some are getting close to retirement, and they don't give a dang."  A 2008 Harris poll showed that about 20 percent of adults between the age of 40 and 64 reported having one or more tattoos. People are becoming more comfortable and curious about body art, tattoo artists say.  Dr. Ava Feldman, a Clive dermatologist, says she has seen a slight increase in the number of baby boomers with tattoos at her office.  One woman had a blue rose tattoo on her in remembrance of her late mother. Another had a little angel tattoo near where she had melanoma, Feldman says. Improving laser techniques are helping with tattoo removal, but it is still a long process, she says.  People on certain medications, such as blood thinners, are not good candidates for tattoos, Feldman says. Others are allergic to certain types of tattoo dyes, she says.

Source:  Des Moines Register (5 June 2009)

When terminally ill patients become mentally incapacitated, their surrogates often make treatment decisions in collaboration with health care providers. The authors examined how surrogates' errors in reporting their spouses' preferences are affected by their gender, status as durable power of attorney for health care (DPAHC), whether they and their spouses discussed end-of-life preferences, and their spouses' health status. Structural equation models were applied to data from married couples in their mid-60s from the 2004 wave of the Wisconsin Longitudinal Study. Surrogates reported their spouses' preferences incorrectly 13% and 26% of the time in end-of-life scenarios involving cognitive impairment and physical pain, respectively. Surrogates projected their own preferences onto their spouses'. Similar patterns emerged regardless of surrogate gender and status as DPAHC, marital discussions about end-of-life preferences, or spousal health status. Implications for the process of surrogate decision making and for future research are discussed.

Source:  Research on Aging (July 2009)

"Parentgiving" website offers assistance to adult children caring for elderly parents
Caregivers provide better care for their aging parents by providing: in-depth information and helpful checklists about a variety of caregiving topics; on-call professional care managers who possess the expertise and experience necessary to help navigate through the maze of caregiving; and a more enlightened shopping experience at the Shop Parentgiving store, where family caregivers can learn about and shop for the products and supplies that best fit their aging parents needs. So whether you are a new caregiver or have been caring for your aging parent for years, is here to answer questions, streamline your time, reduce your stress and simplify your life.

Source:  Current Awareness in Aging Research (CAAR) Report #490 (4 June 2009)
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British scientists studied 1,320 people with dementia and looked at their past education, employment and retirement history.  Although there was no link with education or employment, the people who retired later developed dementia later.  It is thought the mental stimulation may help delay the effects of dementia or it may be that people who retire earlier do so for ill health which itself contributes to the development of dementia symptoms.  The study published in the International Journal of Geriatric Psychiatry found on average with every extra year of employment the age of onset of Alzheimer's Disease became 0.13 years later.  The Institute of Psychiatry at King's College London study, funded by the Alzheimer's Research Trust.  Prof Simon Lovestone, Scientific Adviser to the Alzheimer's Research Trust and the paper's co-author, said: "The intellectual stimulation that older people gain from the workplace may prevent a decline in mental abilities, thus keeping people above the threshold for dementia for longer. Much more research is needed if we are to understand how to effectively delay, or even prevent, dementia."  Rebecca Wood, Chief Executive of the Alzheimer's Research Trust, which funded the study, said: "More people than ever retire later in life to avert financial hardship, but there may be a silver lining: lower dementia risk. Much more research into lifestyle factors is needed if we are to whittle down the £17 billion a year that dementia costs our economy." 

Source:  Telegraph (18 May 2009)
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Elder financial abuse costs older Americans more than $2.6 billion per year and is most often perpetrated by family members and caregivers, according to a new report released by the MetLife Mature Market Institute.  The report, Broken Trust: Elders, Family and Finances, was produced in conjunction with the National Committee for the Prevention of Elder Abuse and Virginia Polytechnic Institute and State University. It points out that up to one million older Americans may be targeted yearly and that related costs such as health care, social services, investigations, legal fees, prosecution, lost income, and assets reach tens of millions of dollars annually.  The study indicates that for each case of abuse reported, there are an estimated four or more that go unreported. Family members and caregivers are the culprits in 55 percent of cases; financial losses are higher with investment fraud scams.  The National Adult Protective Services Association suggests that the “typical” victim of elder financial abuse is between the ages of 70 and 89, white, female, frail, and cognitively impaired. She is trusting of others and may be lonely or isolated, although reports show that there is a very diverse population of victims. 

Source:  Financial Planning (8 May 2009)
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Generally, elderly parents want to remain living in their own home. However, remaining in the home becomes a concern when children see their parents slowing down, perhaps even having trouble with handling stairs and doing general daily activities. Yet, with parents' mental and physical health currently not creating problems, there seems to be no imminent need to search out support services or other accommodations for aging parents.

This is now the time to evaluate the home to make it safe and secure for your loved ones -- now and in the near future -- in anticipation of aging disabilities that may occur. Help and support are available. The nation as a whole is more aware of elderly needs and services and products are becoming available at an outstanding pace.
The Bureau of Labor Statistics states,
“Employment of personal and home care aides is projected to grow by 51 percent between 2006 and 2016, which is much faster than the average for all occupations. The expected growth is due, in large part, to the projected rise in the number of elderly people, an age group that often has mounting health problems and that needs some assistance with daily activities.” Bureau of labor Statistics-Occupational Outlook Handbook, 2008-09 Edition 
This growing need for aides and services also encompasses 
  • home remodeling services -- making a home more serviceable to the elderly;
  • safety alert systems and technology;
  • motion sensors to monitor movement;
  • telehealth services -- using home-based computer systems for the doctors office or a nurse to monitor vital signs and
  • even a pill dispenser that notifies when it is time to take medication. 
Where do you begin to make sure your elderly family member is safe and managing well in his or her home?
Visit often and at different times of the day and night. Make note of daily activities that appear challenging and where changes might be made to add safety and convenience. Remove rugs that slide -- causing a fall -- and move furniture with sharp edges. Set the water heater at a lower temperature. This will protect their older sensitive skin from scalds and burns. Be sure smoke detectors and carbon monoxide detectors are in place.
Bathrooms are a hazard area for the elderly. Grab bars by the toilet and shower are a must to help prevent falls. There are easy to install bars at your local hardware store if you want to do the work yourself. Another item that is good to have is a shower stool or chair.
If you are not sure of what needs to be done, consider hiring a professional. There are companies that specialize in home remodeling and accommodation for seniors. Michelle Graham of Accessible Design by Studio G4 says about senior home remodel projects,  
“The main thing we incorporate in all of our projects is a careful study of needs and potential needs that may develop throughout a client's lifespan.”
Keep in mind what future home adjustments might be needed for your parents to “age in place” in their home.
Home safety or medical alert companies provide GPS-based bracelets or pendants to track the elderly at home who tend to wander. Or the companies may provide alarm devices such as pendants or bracelets which allow the elderly to alert someone if there has been a fall or a sudden health-related attack. In the event an alarm has been triggered, a 24 hour monitoring service will alert the family or medical emergency services or call a neighbor depending on previous instructions. In addition there are companies that will install motion sensors in the home to monitor the elderly on a 24 hour basis.
Don't forget your parents' community as a valuable resource for helping them stay in their home. Take Margaret Muller as an example. At 82 years of age, Margaret lives alone in her small home. She manages very well with the help of her local Senior Center. The Center's “Senior Companion” program sees that Margaret is taken to the store for groceries and other needs and checks in with her often to see how she is doing. Once a day, the Senior Center delivers a hot healthy meal to her door. Having these services and visits gives Margaret the help she needs and peace of mind that she is not alone.
Neighbors, local church groups, senior centers and city centers are some places to look for assistance. Most of the time there is little or no cost for these services.
Your state aging services unit is a valuable community resource. The National Area on Aging website states:
“AoA, through the Older Americans Act and other legislation, supports programs that help older adults maintain their independence and dignity in their homes and communities. In addition AoA provides funding for a range of supports to family caregivers.”
Some of the programs the site lists are:
“Supportive Services and Senior Centers
Nutrition Services
National Family Caregiver Support Program
Grants for Native Americans
Nursing Home Diversion Grants
Aging & Disability Resource Centers
Evidence-Based Disease Prevention
Long-Term Care Planning
Alzheimer's Disease Grants
Naturally Occurring Retirement Communities”  
A few thoughts on hiring home care aides or live-in care givers.
The classifieds are filled with people looking for work as aides to the elderly. Many of these aides are well-qualified, honest people who will do a good job; but, of course, there will be some not so reputable. If you are looking to hire someone, be sure you interview and check references and qualifications. You will be responsible for scheduling that person and doing payroll and taxes as well. Be very sure you hire someone trustworthy, as the elderly seem to trust these helpers more than they should and therefore can easily be taken advantage of.
A professional home care service will eliminate your employment concerns. Professionally-provided aides are usually bonded and service is guaranteed. Home care companies take care of the scheduling and payment of their employees. Home care companies cater to the elderly in their homes by offering a variety of services. The National Care Planning Council lists many of these companies throughout the country on its website .
These providers represent a rapidly growing trend to allow people needing help with long term care to remain in their home or in the community instead of going to a care facility. The services offered may include:
  • companionship
  • grooming and dressing
  • recreational activities
  • incontinent care
  • handyman services
  • teeth brushing
  • medication reminders
  • bathing or showering
  • light housekeeping
  • meal preparation
  • respite for family caregivers
  • errands and shopping
  • reading email or letters
  • overseeing home deliveries
  • dealing with vendors
  • transportation services
  • changing linens
  • laundry and ironing
  • organizing closets
  • care of house plants
  • 24-hour emergency response
  • family counseling
  • phone call checks
  • and much more.
Thomas Day, Director of the National Care Planning Council states,
“Care in the home provided by a spouse or a child is the most common form of long-term care in this country. About 73% of all long term care is provided in the home environment typically by family caregivers.”
As their caregiver, you can make the difference in the quality of life for your aging parents and if staying in their home is a possibility, you have the resources to make it happen.

by Robert H. Spicknall

FOR MANY YEARS, it has been my pleasure to assist law firms, lawyers, and their families as their health insurance agent.

Unquestionably, the most difficult age bracket to be in for health insurance is 60–64. Typically, those who have individual coverage or are part of a group with fewer than fifteen employees have health insurance premiums based on age. If you agree that health insurance is generally very expensive, then you’ll find that health insurance premiums for those ages 60–64 to be outrageous. 

As I assist many in the 60–64 age bracket, I invariably point to the light at the end of the tunnel: age 65, when people become eligible for Medicare. The reason one usually pays much less for health insurance at age 65 is because Medicare is heavily subsidized by the federal government. 

Medicare Components 
The Medicare program provides health care to more than forty-three million Americans. The federal agency that runs Medicare is the Centers for Medicare and Medicaid Services (CMS). CMS is part of the U.S. Department of Health and Human Services. 

Medicare assists people age 65 or older, and persons younger than 65 who have disabilities such as permanent kidney failure. 
There are four components to the Medicare program: 
Medicare Part A helps cover inpatient care in the hospital. Most people receive Medicare Part A without paying a premium. This is because they or a spouse paid Medicare withholding taxes while working. 
Medicare Part B covers physician services and outpatient services. It is optional, yet is selected by most. The majority of the cost of Part B is borne by the federal government. Most individuals pay the standard Part B monthly premium ($96.40 in 2009). However, wealthier seniors, or about 5 percent of Medicare enrollees, pay more. The chart above shows the Part B monthly premium amounts in 2009 based on income. These amounts change each year. 
Medicare Supplement, or Medigap, Insurance is a private insurance policy designed to supplement Medicare Parts A and B. Insurance agents and insurance companies can only sell standardized Medicare Supplement policies, which are identified by letters (“Plan F,” for example). These plans will have different required deductibles, copayments, and coinsurance. One should purchase a Medicare Supplement policy that coincides with the Part B effective date. When your Medicare Part B is activated, you have a six-month window in which to purchase a Medigap policy and be guaranteed that it will be issued. If you miss this window, you can apply later, but you may be declined or charged a higher premium due to health history. 
Medicare Part D helps pay for prescription drugs. The program is administered by numerous insurance companies on the federal government’s behalf. The federal government has established guidelines for the types of drug plans and has set minimum standards of benefits. However, not all Part D plans are the same. They vary by benefits, costs, and their lists of specific drugs covered (“formulary”). You likely will want to enroll in a Part D plan initially at your Medicare eligibility date. If you enroll beyond three months past your eligibility date, premiums will be higher, and you will be penalized the longer you wait unless you maintain comparable prescription drug coverage elsewhere. Delay can be costly: The penalty is 1 percent of average monthly premium for each month delayed, and the penalty continues through the remainder of one’s life. Many Part D insureds are unaware there is an open enrollment period November 15 through December 31 each year that allows enrollees to change Part D coverage to better suit their needs. If you already have Part D coverage and you switch plans during open enrollment, you will not incur the penalty. 

When to Start the Medicare Enrollment Process
To prevent confusion and unnecessary expense in the future, pick one common effective date for all of your Medicare coverage. 

You should begin the process three months before the month of your sixty-fifth birthday. First, contact your Social Security office to enroll in Medicare Part A. Also, it is typically wise to enroll in Part B at this time. Do not enroll in Part B unless you are planning to cancel your current coverage and purchase a Medicare
Supplement (Medigap) policy with the same effective date. This is because when you enroll in Medicare Part B, you have a guaranteed right to buy a Medicare Supplement for six months. You cannot be declined for Medicare Supplement coverage if you sign up during this open enrollment period. However, if you apply for a Medicare Supplement beyond the six-month window, you may be charged a higher rate or declined coverage due to health history. Finally, Part D coverage, or prescriptions for seniors should have the same effective date as Part B
and the Medicare Supplement. Confusion often arises when people fail to pick a common effective date for:
• Medicare Part A
• Medicare Part B
• Medicare Supplement

Unfortunately, all sorts of tellers, clerks, customer service representatives, brokers, account managers, and other employees of financial institutions give customers advice about how to title accounts and name beneficiaries. This wreaks havoc with many estate plans and causes problems.

New Account Forms at financial institutions routinely ask you to name a beneficiary. Do not feel that you have to name a beneficiary. In most cases you're better off leaving that section of the form blank. When the representative wants you to fill it in, say, "No, thank you. I have a carefully thought out will and estate plan which I intend to use to dispose of my assets."

Here is an example of what can go wrong: Mom visits her attorney and makes an estate plan. The estate plan provides that her estate should pass equally to children, and if a child is predeceased, that child's share goes to a trust for that deceased child's issue.

Later, a financial institution representative tells Mom that the could avoid probate by changing the title on her brokerage account to read POD (pay on death) in equal shares to children. A couple of years later, son dies, leaving 3 children of his own. Then Mom passes away.

According to the beneficiary designation on the brokerage account, it is now divided between the two surviving children, and the grandchildren, deceased son's children, get nothing. That is clearly not what Mom wanted; but thanks to the advice from the "expert" who advised the beneficiary designation, her wishes are not carried out.

Here is another example: A financial institution representative tells Mom that she could avoid probate by changing the title on her brokerage account to read POD (pay on death) to Number One Son, Baby Brother, Daughter One, and 3 grandchildren (sons of deceased Daughter Two). That's six beneficiaries. Mom passes away.

The broker says he needs everyone to agree on any sales or distributions from the account since all 6 are now co-owners. Number One Son is not on good terms with Baby Brother who blames Number One Son that nothing has been done in the three months since Mom passed away. Number One Son is executor but since this account is not probate property, the Executor has no authority over it, so it really is not Number One Son's responsibility. (But tell that to Baby Brother.) Daughter One is not speaking to any of her co-owners because she says the three grandsons (who are getting half of the account, one-sixth each) are getting more than their share. Daughter One says that the grandsons should only receive the one-fourth share that would have been Daughter Two's if she lived. After all, that's what Mom's will says. Of course, the will doesn't operate on the POD account thanks to the advice of the "expert."

The accountant says that since Mom died last year, the account's income and any sale proceeds should not be reported to Mom's social security number. That makes sense, but not one of the six named beneficiaries is willing to have the entire sale proceeds reported to him on a 1099-B; and the broker can only use one social security number for the transaction. Mom's lawyer, who is the other Co-Executor, is angry because the plan he designed is messed up, and it looks like the six beneficiaries of the brokerage account are going to have to be treated as a partnership comprised of the six beneficiaries for income tax purposes. The partnership's tax ID number then can be used for the 1099 instead of any one of the 6 beneficiaries. That will require a tax ID number, a partnership agreement, and federal and state partnership income tax returns - all very costly, time-consuming and unnecessary. Since some of the beneficiaries are unhappy and hostile to each other, getting them to understand and cooperate looks like many hours of legal work.

The three grandsons are begging for money. Since their mother died, they are in need of money to pay college tuition. They can't get financial aid because they have an asset that they must spend first. Each owns 1/6 of the brokerage account. One of them is under 18, and the brokerage house will not pay out anything to the minor nephew unless a legal guardian is appointed for them. Ironically, the probate proceeding required for guardianship is much more onerous and expensive than probate of a will.

If the brokerage account had not been POD or TOD, it would have passed under Mom's will. The 3 grandsons would have shared their deceased mother's one-fourth share. The Executors would have authority to sell the investments. Any income tax consequence would be reported and paid by the estate. The grandson could have received distribution for tuition. The payment could have been made to the college or to a custodian for the benefit of the minor. No partnership would have to be created, and no partnership income tax returns filed.

Certainly, for Mom in our example, avoiding probate caused many, many problems. The so-called "expert" who advised her really did not have any knowledge, training or experience in estate settlement and the various property law and tax issues involved. She should not have named beneficiaries.