What Happened to Our 2010 C.O.L.A.?

The cost of living adjustment for social security benefits did not occur in 2010. How does the lack of a 2010 social security cost of living raise affect seniors and will it happen again?

United States citizens who get social security or social security disability benefits received a surprise at the end of 2009. The Social Security Administration announced on October 15, 2009 that there would be no cost of living adjustment or COLA for 2010. How did the government come to this decision and what impact did this have for social security benefit recipients?

What Is COLA?

COLA, also known as the cost of living raise, helps to bridge the gap for those receiving social security benefits during periods of inflation. COLA became part of the 1972 Social Security Amendments enacted by Congress. Since then, COLA has existed as an annual occurrence each January, however in 2009, the US Government announced that a 2010 Social Security cost of living raise would not occur leaving many people concerned.

How is COLA Determined?

The 2010 social security cost of living raise has been determined the same way since 1972. COLA is based upon the annual change in the Consumer Price Index (CPI) for urban wage earners and clerical workers (CPI-W). The measurement is calculated by comparing the third quarter of the previous year to the third quarter of the current year in order to predict if a COLA will occur for the following year. If there is a percentage increase of at least 0.05 percent there will be an increase in the cost of living allowance. If there is no wage earner increase based on the CPI or if it is less than 0.05 percent, no COLA is offered.

What Happened to the 2010 COLA?

In 2010, the cost of living raise was determined from comparing the average CPI for wage earnings from the third quarter 2008 and the third quarter 2009. The Bureau of Labor Statistics showed that the 2008 third quarter CPI wage average was 215.495 while 2009's third quarter CPI wage average was 211.001, meaning year 2009 was less than year 2008. Since there was no increase in CPI average wages between 2008 and 2009, the 2010 social security cost of living raise did not occur.

2010 COLA and Medicare Part B

Seniors felt the lack of a 2010 COLA increase through Medicare Part B premium increases that affected 7% of people receiving social security benefits. Medicare Part B premiums are not determined through the Consumer Price Index and increase each year regardless of a COLA increase or decrease. However, there is a "hold harmless” provision in the Social Security Act that protects 93% of social security beneficiaries from having to pay the increased premium.

While Medicare Part B did not negatively affect a majority of social security beneficiaries, other factors outside of the social security administration's reach still lurk behind the scenes. The lack of a 2010 social security cost of living raise did not prevent property owners from raising rents each year, for example. With the 2009 Credit Reform Act, credit card companies began increasing and implementing fees to pass on to cardholders before the act went into effect in February 2010.

Therefore, even though the average price of groceries and gas did not increase, other areas such as housing did rise. Which means a COLA would be needed for some individuals to help hedge these increases. Doris Bias, age 52 from Maryland, receives social security disability and was dismayed there was no increase but thankful that her landlord decided not to raise her rent in 2010.

"I know I would have found some way to manage if the rent did increase, but at least now I can continue on with my normal budget," explained Ms. Bias.

Read more: http://www.brighthub.com/money/personal-finance/articles/69916.aspx#ixzz0mlwzQw3K

Can This Happen Again?

It is possible for there to be no COLA just as there was in 2010? If there is no change or a decrease in the CPI wage earnings average from year to year, a COLA will not occur. Be advised that special circumstances occurred in 2008 and 2009 that directly affected why there was no social security 2010 cost of living raise. As with other global governments, the United States was in an economic downturn during this period meaning consumers had less money to spend due to high unemployment rates. This in turn, drove prices down to encourage increased spending. Should another economic situation similar or worse than that which occurred in 2008 were to happen, the chances are likely there would not be a COLA.

The 2010 COLA Aftermath

No 2010 social security cost of living raise was a shock to social security beneficiaries across the nation. Seniors and other beneficiaries will have to tighten their budgets a little more if housing and utility costs continue to rise. No COLA for 2010 served a reminder that this cost of living raise is not guaranteed to occur every year. When the government determines there will be no cost of living allowance, it can also affect the Consumer Confidence Index or CCI. Ways to combat any unexpected surprises should this happen again include:

•Tightening your monthly budget by trimming down to your necessities.
•Start saving a little extra money for a rainy day to help out in a crunch, if possible.
•Do not expect a COLA each year. If it happens, use that extra savings to your advantage.
For more information on the social security cost of living raise, visit the Social Security Administration's website and be sure to read the FAQ section and current press releases.

Read more: http://www.brighthub.com/money/personal-finance/articles/69916.aspx?p=2#ixzz0mlwnpQyf

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Baby Boomers: Crushed Retirement Dreams

Those nearing retirement adjust to dashed dreams and diminished portfolios

Randy Kamen Gredinger and her husband, Martin, had big dreams for retirement. The couple had talked about taking a trip around the world or maybe spending time in Asia or Africa.

Then came the market downturn in 2008, which erased 25% of the Gredingers' savings.

With two children in college, their immediate concern turned to cutting costs so that they could cover tuition expenses. “We had the lion's share of college covered before the crash,” Mr. Gredinger said. “Now we don't.”

The Gredingers, both 59 and making six-figure salaries — she's a psychologist and he's a certified public accountant — still plan to retire, but probably later than they had envisioned and well past the customary retirement age of 65. And when they stop working, their travel itinerary probably won't be as extravagant as they had hoped.

“I love what I do, but the challenge for me is coming to grips with the fact that we have to work, rather than thinking of it as a choice,” Ms. Kamen Gredinger said.

The retirement dreams of many baby boomers like the Gredingers were based on having a solid nest egg consisting of ever-appreciating stocks and real estate.

The financial crisis cracked the egg.

And while stocks have made up some of the losses sustained in 2008 and early 2009, and housing values show signs of stabilizing, employment is still sluggish, and it may take a while for many boomers to recover financially and regain the confidence they had as they looked forward to their golden years.

So, boomers are making adjustments.

Forty percent of workers 45-59 now expect to retire later than they did before the market downturn, according to the Center for Retirement Research at Boston College. Most of these workers intend to delay retirement by four or more years.

Fifty-five percent of workers 45-64 are postponing travel, according to a January survey by AARP; 68% are reducing spending on entertainment.

Some are cutting back on necessities — 17% said they are reducing medications. Eight percent have taken on a second job, while 19% have increased the number of hours they work, according to AARP.

“People are really husbanding their resources and trying to save more,” said Alicia Munnell, director of the Center for Retirement Research. “Some are trying to work longer, but unfortunately, the financial crisis was accompanied by a dramatic decline in economic inactivity.”

While the Gredingers have partially replenished their savings, thanks to the market rebound, they also have taken steps to cut expenses.

Mr. Gredinger has encouraged his son to sign up for a work-study program and apply to be a resident adviser so he'll get room and board for free.

Ms. Kamen Gredinger has cut back on her shopping trips. She used to have so many designer shoes that her husband once placed them around the entire exterior of their home, just to make a point. Now if she buys one pair a year, that's a lot, she said, and she won't set foot in Bloomingdale's unless there is a sale going on.

Ms. Kamen Gredinger is also considering doing volunteer work abroad so they could travel at a discount, she said.

For some, postponing retirement is not an option — even if it means living a more frugal lifestyle than they had imagined.

John Buchter, 63, and his wife, Roberta, 65, proceeded with their plans to retire to Savannah, Ga., last year even though it could mean living on a shoestring budget for the rest of their lives.

“My father passed away at 58 and never had an opportunity to retire,” Mr. Buchter said. “So I had retirement in my mind since I was 50.”

The Buchters relocated from Reading, Pa., where Mr. Buchter worked in the steel industry. They chose Savannah because it has a warm climate and they can live there inexpensively.

Today the Buchters are living off the $2,600 a month they get in Social Security payments. They have agreed not to touch Mr. Buchter's 401(k) account for four years in the hope that it gains back the 15% it lost during the market crash.

As a result, the couple is more careful with money. They try to walk rather than drive to save on gas. And they buy generic brands at the grocery store.

“Sure, we would like to be more carefree with money, but I don't miss anything,” Ms. Buchter said.

Financial advisers and experts are worried, however, that many baby boomers, like the Buchters, are tapping into their Social Security accounts too soon.

Forty percent of 62-year-olds eligible for Social Security are taking it, according to AARP.

“Taking Social Security at 62 makes sense for those people who have shorter life spans, but that is not 40% of the population,” said Jean Setzfand, AARP's director of financial security.

Financial advisers said they are spending more time managing baby boomers' expectations.

Michael A. Masiello, a financial adviser with Masiello & Associates Estate and Wealth Preservation Council LLC, is seeing a number of new baby boomer clients who are struggling with how they are going to live off their retirement savings.

“We tell clients what they need to hear, not what they want to hear,” Mr. Masiello said. “I keep a box of Kleenex on the table.”

Many of these investors understand that the notion of retiring at 65 is more the exception than the rule, said Steven Brett, president of Marcum Financial Services LLC, which has $400 million in assets under management.

“Some of them will have to take on third or fourth careers,” he said.

But for those baby boomers who lost their jobs, finding new ones can be challenging.

Larry Benson, 53, was laid off from his job as a graphic designer at SEIU United Healthcare Workers-West in February 2009 after only 11 months.

Before that, he had been a freelancer. Since then, he has been sending out four or five résumés a week — but has been on only one interview.

“I don't know if it's my age or because I am competing against so many people,” Mr. Benson said. As for retirement, he is relying on the value of the house he shares with his partner, Rick Fitzgerald.

They bought the four-bedroom house in Oakland, Calif., for $400,000 in 2001 and figure they could sell it for $500,000 today if they had to.

“I used to think that I would retire when I could still move around — maybe in my mid- to late 50s,” Mr. Benson said. “Now I don't think I will ever retire.”

Mr. Benson isn't alone. Fourteen percent of baby boomers have lost their jobs since the market downturn, according to AARP, and 27% have had their hours or pay cut.

As a result, many baby boomers are cutting out things that could help them save for retirement, experts said. For example, only 27% of baby boomers are consulting financial planners.

“They see it as another expense they have to pay for,” Ms. Setzfand said.

In fact, a number of baby boomers interviewed for this story said they have stopped seeing financial advisers as a result of the market crash.

Doreen Orion, 50, and her husband, Timothy Justice, 52, fired their financial adviser after the market crash and decided to handle their investments themselves.

“Since we did just as badly as everyone else, we wondered why we were paying someone else to do it,” she said.

But some baby boomers, such as the Gredingers, are making a point to check in with their advisers periodically to make sure they can still meet their retirement goals, even if they are not as lofty as they once were.


For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Identify & Treat Burns!

HOW TO RECOGNIZE AND TREAT BURN INJURIES

Burns can be painful - and serious. It's all a matter of degree. To know how to treat a burn, and when to call a doctor, first learn to distinguish the different types of burns.

First degree burns: Only the outer layer of skin is damaged. The skin is red, with some swelling and pain. This is the least serious type of burn and can be treated with first aid.

Second degree burns: The first layer of skin has been burned through, and the layer underneath is red and splotchy. Blisters may develop, along with swelling.

Third degree burns: The most serious type of burn, affecting all layers of skin and possibly causing permanent damage to tissues and even bones. Skin may appear either charred and black, or white and dry. For third degree burns, immediate medical attention is needed. Don't remove burned clothing or soak in water, but cover the area with a cool, wet sterile cloth or bandage. If possible, raise the burned area of the body above the level of the heart.

With first degree burns, or second-degree burns that don't cover more than 3 inches of skin, hold the burned area under cool - but not cold - running water for about 15 minutes. Don't put ice on the burn. Wrap the wound in a loose dressing of sterile gauze, keeping air and pressure off the burn. Don't break any blisters that form. The patient can take over the counter medications such as aspirin, ibuprofen, or acetaminophen for pain.

Keep an eye out for increased redness, swelling, or oozing, and call a doctor if any of these signs of infection develop.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Frugality is the Best Policy

Jeannine Aversa and Bernard Condon, AP Business Writers,

Frugality among consumers is outliving the recession (what recession?)

Even as the economic recovery plods ahead, many American consumers are refusing to come along.

They're not spending freely -- and they have no plans to.

Many of them have steady income. They aren't saddled by high debts. They don't fear losing their jobs. Yet despite recent gains, they've lost so much household wealth that they're far more cautious about spending than before the recession.

Their behavior suggests that the Great Recession may have bred a new frugality that will endure well into the recovery. And because consumers fuel about 70 percent of the economy, their tightfisted habits means the rebound could stay unusually sluggish.

That's the picture that emerges from an Associated Press survey of leading economists and interviews with more than two dozen ordinary Americans. The new AP Economy Survey asked 44 leading economists whether the recession created a "new frugality" among consumers that will outlive the recession. Two-thirds said yes.

They had in mind people like Marjorie Feldman of suburban St. Louis, who retired three years ago as a systems analyst for a utility company. The stock investments in her retirement account have sunk 15 percent from 2007. The value of her home is down 20 percent.

"I had retired assuming I'd make money" off the investments, said Feldman, who's in her early 60's. "I just don't feel as confident in the economy, and I never will again. I won't spend money the way I used to."

Feldman's husband works full time in academia. She has a part time job preparing tax returns at H&R Block. But her prime earning years are behind her.

"I don't think it will ever get back to where it was before," she said of her nest egg. "I won't spend money the way I used to."

Scott Hoyt, senior director of consumer economics at Moody's Economy.com, notes that baby boomers, in particular, enjoyed spending sprees for most of their adult lives as their assets steadily grow.

"But the recession changed that," Hoyt said. "Many have retirement and children's education looming. All of a sudden, they see their balance sheets decline in a way they've never seen before."

To be sure, many shoppers, especially the wealthy, are buying into the recovery. Partly on the strength of consumer spending, the economy emerged from recession last year and has been growing steadily, if moderately, since. Major retailers logged solid sales in March. Employers have begun to add jobs, including a net increase of 162,000 in March. The stock market has risen 70 percent from its low in March 2009.

Yet many who became penny-pinchers during the recession are in no mood to start shopping again with abandon for clothes, cars and home additions. They've discovered the peace of mind that comes with rebuilding savings, shopping more prudently and learning to live with less.

At their nerve-racked peak last year, Americans socked away 6.4 percent of their disposable income. That compared with less than 1 percent hit at one point during the pre-recession boom. The savings rate has since dropped to 3.1 percent. Yet few expect it to approach the near-zero savings rate that would signal high-octane spending has roared back.

Susan Wilson, 55, a freelance PR specialist in Scottsdale, Ariz., says her business is picking up. But her spending isn't. Wilson still feels burned by the recession, when she lost her home to foreclosure.

"Shame on me," she said. "I wasn't paying enough attention to my financial health. That will never happen again."

Wilson is renting now. She traded in her leased car for a used car she could buy outright. She's started growing her own vegetables and air-drying her laundry to save money and stay out of debt. She's looking to buy a home, but not one with an outsize mortgage.

"I'm looking for pretty much the smallest house I can live in," she said.

Interviews with ordinary Americans suggest a new frugality endures even though consumer spending has risen for five straight months and retail sales for three.

In the AP's new quarterly survey, a majority of economists agreed that a new frugality will persist even as the recovery gains firmer footing.

"I would call it a 'mini age of austerity,'" said Sean Snaith, an economics professor at the University of Central Florida.

"Consumers will not run up multiple credit cards to their limits, and when buying a house the objective will not be to get the maximum square footage for which they can afford the payment. A higher savings rate will be in place for several years."

Jeff Thredgold, an economist at Thredgold Economic Associates, predicts "less impress-my-neighbor-type spending" in coming years.

Count Keith Flowers of Manassas, Va., in that category. He's decided that the hit he took in the housing slump requires him to continue to rein in spending. He's cut off his landline phone and has become a regular at discount retailer Costco.

He isn't worried about losing his job in business development at an information technology company. What's led him to cut back spending is the sunken value of his condominium. He bought it in 2005 for about $270,000.

"I doubt right now it's cracking $100,000," Flowers said.

Rajeev Dhawan, director of Georgia State University's Economic Forecasting Center, says: "I think the chances of us being big spenders in the next 10 years are pretty low."

So much household wealth was inflated by the housing boom, Dhawan said, that the real estate bust spooked consumers. States hardest hit by the bust -- California, Nevada, Florida and Arizona -- together account for about 30 percent of national economic activity, he noted.

Household net worth -- the value of assets like homes, checking accounts and investments minus debts like mortgages and credit cards -- has risen for three straight quarters. But economists say consumers would need a stronger and prolonged increase in wealth to lead them to ratchet up spending. Net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion.

Some economists put their hopes for the economy in the rich, who are spending more freely than the rest of the population. They hold out hope that this will encourage more hiring and stimulate spending by the less wealthy. More spending could increase companies' revenue, which allow them to boost hiring and pay. And that would lead their employees to spend more.

Royal Caribbean Cruises Ltd. returned to a first-quarter profit as more travelers vacationed on its ships and spent more money on board. And makers of luxury goods are benefiting from a release of pent-up demand for jewelry, watches and high-end furnishings.

High-end retailers have reported blowout results. Nordstrom's revenue in stores open at least one year jumped 16.8 percent last month. Saks' surged 12.7 percent.

McClaren Automotive has announced it will debut a $200,000 sports car in the U.S. next year. And business is picking up faster at high-end hotels than at mid-priced and budget hotels.

Whether spending by the wealthy will cause the less-well-off to spend freely, too, remains unclear. For now, though, many people have embraced a more frugal approach to spending.

Or maybe they've just learned to go without.

Jan Iris Smith, 57, and her husband of Cabin John, Md., put off furniture and clothing purchases after the stock market's collapse in early 2009.

"We were counting on our income from our investments," said Smith, a psychotherapist whose husband is retired. "We just stopped pretending everything was going to be OK anytime soon."


For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Health Care Reform & Medicare

Health Care Reform and Medicare Recipients
Source: Saint Joseph's University

From the time presidential candidate Theodore Roosevelt first discussed health care reform in 1912, the topic has been a precedent-setting issue in the U.S. The 2010 passage of health care legislation is no different, but has many Americans in a quandary about how it will affect them. This is especially true of senior citizens.

Seniors, who generally are on fixed budgets and have increased medical needs, have a high stake in health care reform. But unfortunately, the rumors swirling about this topic are as sizeable as the 1,000 pages of legislation. George Sillup, Ph.D., associate professor of pharmaceutical marketing at Saint Joseph’s University in Philadelphia, offers clarification on the issues most relevant to this population.

Impact on Medicare — A Mixed Bag
Beginning next year, annual wellness visits and certain preventive services such as cancer screenings, will be free of cost. Medicare beneficiaries will no longer have to pay deductibles and co-insurance for this kind of care. Eighteen months after enactment, the law says Medicare beneficiaries will have access to a comprehensive health risk assessment and a free personalized prevention plan.

Groups that advocate for seniors, including AARP and the Medicare Rights Center, say that there will be no cuts to Medicare coverage for seniors. Additionally, next year, the law provides a 10 percent bonus through Medicare to primary care doctors and general surgeons practicing where they are in short supply.

How will Medicare prescription-drug benefits change? — A Big Win for Seniors
This year, there is a $250 rebate for Medicare Part D enrollees who fall into the “doughnut hole” of drug coverage. “That’s a big improvement,” according to Sillup, “because seniors previously covered under Part D received coverage for their prescriptions up to $2,830 a year, then the participant paid 25 percent of the cost and Medicare covered the remaining 75 percent.” Once their prescriptions exceeded $2,830, they fell into the doughnut hole, or hole of no coverage, until they spent another $3,610 for their medications.

What will happen to Medicare Advantage? — Higher Premiums
Today, Medicare pays private insurers an average of 14 percent more than it spends to care for those enrolled in traditional Medicare. The overpayments help lower premiums and co-insurance costs, and provide extra benefits like vision and dental coverage, even gym memberships. The law would nearly eliminate the overpayments, saving $132 billion over the next decade.

For people currently enrolled in Medicare Advantage plans, premiums and benefits will remain the same through the end of the year according to the Centers for Medicare & Medicaid Services (CMS). But costs could increase and extras may be eliminated next year when payments to insurers are to be frozen at 2010 levels. The payments will start to drop in 2012, Premiums will likely increase next year as they did this year

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Westchester NY Library Helps Seniors Save

Westchester Library System Helps Seniors Save a Buck with New Senior Benefits Information Centers:

Tarrytown, NY 2010 -- Today’s struggling economy has left many older adults facing financial hardship and filled with uncertainty when it comes to their healthcare. For those on a fixed income, saving money wherever possible has become increasingly important. The Westchester Library System’s (WLS) new Senior Benefits Information Centers (SBICs), located at libraries in Mount Kisco, Shrub Oak, Tarrytown, and Yonkers, offers older adults benefits counseling covering a broad range of topics including Medicare health and prescription plans, food stamps, HEAP, EPIC, weatherization, minor home repair, and tax relief programs.

WLS has partnered with the Medicare Rights Center and Westchester County’s Department of Senior Programs and Services to make the free one-on-one counseling available at four Westchester locations. SBICs are now open at the John C. Hart Memorial Library in Shrub Oak (Tuesdays and Wednesdays from 10am to 1pm) and the Grinton I. Will Library in Yonkers (Mondays and Tuesdays from 10am to 1pm; Thursdays from 11am to 1pm). Grand openings are scheduled for The Warner Library in Tarrytown on April 21, 2010 and Mount Kisco Public Library on May 12, 2010. Counseling at both locations will be available on Wednesdays from 10am to 1pm.

“In this economy, everyone needs to save a buck – especially seniors,” said Robin Osborne, Director of WLS’s Office of Community Connections. “WLS’s SBICs help Westchester’s older adults hone in on the specific programs that qualify for – whether it’s related to healthcare, home care, or tax relief. Seniors receive one-on-one attention to have their questions answered and leave armed with the information they need to save.”

SBIC’s counselors address each visitor’s specific needs and guide them through a variety of online resources to identify their individual eligibility. All locations are equipped with a dedicated phone line to answer questions as well as computers and printers that enable seniors to leave with the appropriate information and referrals. In an effort to make SBIC services available to an even greater number of seniors, WLS is also exploring the possibility of expanding the program to other libraries in Westchester County.

Ann Acken, a senior citizen from Somers, recently visited the SBIC at the John C. Hart Memorial Library in Shrub Oak with questions about her Medicare coverage. "My experience was very enlightening. The volunteer counselor, Marna, was very patient and answered all of my questions."

Volunteer SBIC counselors are trained by the Medicare Rights Center and include retired professionals such as nurses, teachers, social workers. WLS and the Medicare Rights Center are seeking additional volunteers, particularly in the Northern Westchester area. Westchester residents who are interested should be at least 50 years old with excellent public speaking and interpersonal skills, be computer literate, and able to commit to a minimum of 12 hours per month. Some knowledge of the health care system and fluency in Spanish is a plus.

“The SBIC counseling program is especially important this year because many people are not aware of their eligibility for Medicare Savings Programs and savings available through other public benefits, such as Food Stamps,” said Lois Steinberg, Westchester Program Director for the Medicare Rights Center. “Our trained counselors can help them find the benefits they are eligible for and show them how to apply.”

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

We Need More Adult Day Care Now

The Need For Adult Day Care
By Kelly Wheaton
Adult day care services and centers are needed more and more each day. In these difficult times, adult care services are a lifeline for many who need care. Centers can be a place where adults meet to socialize or a place where those suffering from a mental illness can find treatment. This kind of care is needed in all communities.

These centers are designed to provide adults with some social and health services. Care centers are also able to give those who need supervision a safe place outside of their home. These centers provide both professional and compassionate services to adults within a community-based group setting.

There are many who cannot afford a skilled nursing facility or in-home care. For these people, a care center is a perfect solution. Day centers often cost much less than the other options and are open during normal business hours. Some facilities may even be open during evening hours and on the weekend.

All centers are different. Most offer general services. These are meals and snacks, personal care, therapeutic and social activities. Many centers also give transportation to and from the facility. Many social and therapeutic activities include board games or light cardiovascular workouts. Many will give assistance for daily personal needs like eating, grooming, and toileting.

Centers are generally divided into three types. These are social, medical or health, and specialized. As mentioned above, social centers will offer the more basic services in health but provide meals and recreational activities. Centers which deal with medical and health issues offer the general services with more intensive therapeutic services and more social activities. The third type only provides care to those adults in specific care areas. Most of these treat adults with developmental disabilities or diagnosed dementias. The type of facility needed is entirely based on the level of care needed.

Centers like these provide care for many who would not otherwise be able to afford it. As health care costs continue to rise, these centers will become more necessary. Without them, many adults would have no place to go and would be in an unsafe environment at home alone.


For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Retirement Planning ~ Embrace Downsizing

Downsizing in Retirement:

One of the quickest ways to stretch your retirement budget is to shrink your housing costs. Moving into a smaller house, condo, or apartment can also reduce your taxes, utility bills, and home maintenance costs. Here are other reasons to consider downsizing in retirement:

Boost your nest egg. Cutting your housing costs is a quick way to increase your retirement savings. "Having less money locked up in your housing frees up more money to invest or just for your lifestyle," says Kathy Hankard, a certified financial planner for Fiscal Fitness in Verona, Wisc. "If you're deciding just by the numbers, it's pretty much a no-brainer to downsize." For example, if you moved from a $300,000home with a paid-off mortgage into a $150,000 condo , you could add $100,000 or more to your nest egg, after transaction costs.

Lower your cost of living. For retirees who still have a mortgage or pay rent, moving into more compact quarters in your current town or relocating to a low-cost locale can lower one of your biggest monthly expenses. Ideally the smaller space would also cost less to heat, furnish, and maintain. Slimming housing costs will produce far greater results than skipping coffee and clipping coupons. Aim for a town that balances a low cost of living with amenities such as high-quality health care and plenty of fun, affordable activities.

Reduce taxes. Inexpensive housing has the added bonus of smaller property tax bills. "I have clients who have saved a couple of thousand dollars per year because they have moved from an urban area with a high property tax to an area with a lower property tax and that doesn't assess seniors for school taxes," says Micah Porter, a certified financial planner and president of Minerva Planning Group in Atlanta, Ga. Taxes can vary considerably by location. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax. New Hampshire and Tennessee tax dividend and interest income only. "If you anticipate earning income in retirement, being able to forgo that state income tax could save you thousands of dollars as well," says Porter. Five states levy no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Also look for state and local tax breaks specifically for seniors who reach certain ages.

Less upkeep. Ron and Jean Mirabile, both 67, traded in a three-story townhouse with a basement in Cromwell, Conn., for a three-bedroom apartment with a lake view in Port Charlotte, Fla. The couple was looking for a change of scenery and housing that required less upkeep when they retired in 2008. "If something breaks, I call the office and the maintenance man comes and fixes it," says Jean, a former proofreader. Ron, a retired dentist who makes wooden fishing lures as a hobby, no longer needs to travel to fish. "I can take one pole and lure and go out in the backyard and fish for bass," he says. "The best things in Florida are free: The weather, the beach, and the scenery."

Slash utility bills. Cozier quarters may also result in lower heating and cooling expenses and a smaller homeowner's insurance bill. "A smaller space should save you money on utilities," says Porter. Ask for copies of the previous owner or tenant's utility bills to determine approximate monthly expenses.

Increase flexibility. Some retirees go back to renting in retirement. "Renting makes a lot of sense because there is more flexibility," says Hankard. "Most people would rather do other things with their time and money, unless they are really in love with their home." Renters can try out a few retirement locations. Sometimes priorities also shift throughout retirement. For example, immediately upon retirement, you might want to move to the Sunbelt or travel. But after a few years, you might want to move closer to your children and grandchildren.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Baby Boomers Can't Save for Retirement

By Emily Brandon

Many baby boomers are helping to financially support both their parents and their adult children. Almost a third (31 percent) of relatively wealthy Americans are supporting older and younger immediate family members at the same time, according to a new Merrill Lynch Wealth Management survey of 1,000 people with investable assets of $250,000 or more.

In order to support relatives, while at the same time planning their own retirement, many of these affluent baby boomers say they have made lifestyle sacrifices (45 percent) and cut back on personal luxuries (44 percent). A quarter of these retirees sandwiched between eldercare and childcare responsibilities have stopped saving for retirement to take care of more immediate financial needs. Another 12 percent of wealthy baby boomers have stopped saving for a child’s education.

“Many folks find themselves slipping into the sandwich generation without really understanding the scale of financial commitment involved,” says Andy Sieg, head of retirement and philanthropic services at Bank of America Merrill Lynch. “What starts as a manageable expense increases as your parents become more reliant on you as their health care needs increase.”

About one in five of those surveyed are considering inviting their adult children or parents to return home to cut living expenses for both or all three parties. Women were twice as likely as men to make financial sacrifices in order to better care for others.

The emotional challenges of caring for relatives may be even more difficult to manage than the financial costs. Some 57 percent of Americans between the ages of 18 and 90 are concerned about the emotional strain of caring for a relative, compared to 49 percent who are worried about paying for long-term care
expenses, according to a recent Age Wave and Harris Interactive survey of 2,939 people between the ages of 18 and 90. Many people are also concerned about the affects care giving would have on their lifestyle (21 percent), other family relationships (21 percent), and career (19 percent).

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Elder Americans Need to Watch Florida Lawmakers

The St. Petersburg Times reports:

Elderly Floridians who want to stay out of nursing homes would be forced into managed care under two bills passed this week by the House in an effort to pare Medicaid costs.

But the Legislature's own policy analysts suggest that managed care may actually be more expensive for frail older people, based on the current track record of HMOs.

A recent report examined a managed care program that provides home health care, housekeeping and many other at-home services, as well as assisted living when necessary. It did keep people out of nursing homes but was more expensive than two traditional programs, run by not for profit agencies, that cover the same services.

The state could save money by beefing up the traditional programs, the analysts said. The House bills would do just the opposite -- wiping out the traditional programs and putting elderly clients into managed care.

``It makes no sense,'' says Margaret Lynn Duggar, director of the Florida Council on Aging, which lobbies for the not-for-profit agencies that run the traditional programs. ``Legislative leaders have been convinced that managed care will save them money when the facts do not prove that out.''

The bills surfaced just a few weeks ago, said Sen. Nan Rich, D-Sunrise, and have not been well thought out.

``It actually will have the opposite effect of what we want to happen'' in the way of savings, Rich said, ``and that's what this (analysts) report is showing.''

The bills are a product of the House Select Policy Council on Strategic and Economic Planning, chaired by incoming House Speaker Dean Cannon. He could not be reached Monday for comment. Nor could vice chair Denise Grimsley, R-Sebring.

The House bills have no companion bill in the Senate but could be passed during budget negotiations. Incoming Senate Mike Haridopolos, R-Melbourne, has made Medicaid reform ``an urgent priority'' for budget cutting. He could not be reached for comment.

Medicaid -- which provides health care to the poor -- is a huge, expanding chunk of the state budget. When it comes to younger adults and children, pilot projects have indicated that managed care might save money.

That's because those Medicaid clients go directly to their doctors and hospitals, who bill the state -- a system that sometimes results in excess services and outright fraud. Managed care companies receive a monthly stipend for each client, negotiate rates with health care providers and decide which services are really necessary.

Keeping frail, older people out of nursing homes works differently.

Clients wanting Medicaid to pay for home care or assisted living cannot pick their own services and are not entitled to care. A case manager always decides what services they need and how much it will cost.

Roughly 33,000 aged and disabled Floridians now receive these services from one of three Medicaid programs included in the analysis released in March by the Legislature's Office of Public Program Analysis and Government Responsibility.

It examined clients that entered those programs between 2005 and 2008 and calculated their total cost to Medicaid. The results for the two traditional, fee-for-service programs were:

• The Aged and Disabled Adult program, which provides at-home services like chores, respite care and home health care, cost $15,120 per client during that period, compared to $50,000 or more for a nursing home.

• The Assisted Living for the Elderly program, which pays for assisted living, cost $17,424.

• The managed care program, Nursing Home Diversion, provides both at-home and assisted living services in 30 counties cost $23,364 per client.

Average payment rates for the 16 companies that provide managed care to 14,000 clients have dropped a few thousand dollars a year since the period studied by Legislature's analysts, so these disparities would presumably be narrower today.

Still, Florida could save tens of millions of dollars a year by retaining and expanding the traditional programs instead of managed care, said Larry Polivka, a Pepper Foundation scholar in residence. He conducted similar studies of the three programs, with similar cost disparities, while running an aging research center at the University of South Florida.

``I have been in policy analysis for 25 years,'' Polivka said, ``and I have never seen clearer evidence for clear cost effectiveness of one approach over another.''

Among other things, he said, the not-for-profit agencies that run the traditional programs charge the state a few cents on the dollar for administrative overhead and benefit from volunteers.

By contrast, the state's most recent actuarial report projects that managed care companies will an average of 78 cents on the dollar on care this fiscal year, retaining 22 cents for overhead and profit.

The legislative analysis did note that the managed care program was more effective at delaying nursing home entry than the traditional programs.

But that had little fiscal impact. That's because most clients on all three programs usually live their lives out at home or in assisted living. Those few who do require a skilled nursing home are generally so incapacitated they live only a few months, so delaying their entry into the home by a few weeks does not save much money.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Health Care in America ~ Costly Increases

WASHINGTON – President Barack Obama's health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up.

Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama's aim of expanding health insurance — adding 34 million to the coverage rolls.

But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.

It's a worrisome assessment for Democrats.

In particular, concerns about Medicare could become a major political liability in the midterm elections. The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, "possibly jeopardizing access" to care for seniors.

The report from Medicare's Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration. White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law's potential to achieve savings.

The report acknowledged that some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

"During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage," wrote Richard S. Foster, Medicare's chief actuary. "Also, the longer-term viability of the Medicare ... reductions is doubtful." Foster's office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama's 10-year, nearly $1 trillion plan to remake the nation's health care system.

"A trillion dollars gets spent, and it's no surprise — health care costs are going to go up," said Rep. Dave Camp, R-Mich., a leading Republican on health care issues. Camp added that he's concerned the Medicare cuts will undermine care for seniors.

In a statement, HHS Secretary Kathleen Sebelius sought to highlight some positive findings for seniors. For example, the report concluded that Medicare monthly premiums would be lower than otherwise expected, due to the spending reductions.

"The Affordable Care Act will improve the health care system for all Americans, and we will continue our work to quickly and carefully implement the new law," the statement said.

Passed by a divided Congress after a year of bitter partisan debate, the law would create new health insurance markets for individuals and small businesses. Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship. Tax credits would help many middle-class households pay their premiums, while Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren't clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any changes.

The report found that the president's law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

Administration officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans. They also point out that the law will decrease the federal deficit by $143 billion over the 10-year period.

The report's most sober assessments concerned Medicare.

In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces "a very serious risk" of insolvency.

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Texas Healthcare Problems

HOUSTON - While President Obama presses for a health care vote, some senior citizens here in Houston are finding it tough to get into a doctor’s office.

Already, about one-third of doctors won’t take Medicaid patients, who are generally too poor to afford private insurance.

Now, some are also saying “no” to Medicare, the safety net for older Americans.

“I've never felt like I wouldn't get care, ever in my life,” says Sandy Vise, who has been on Medicare for 2 years. “This is just devastating for me.”

As a benefits administrator, Vise spent two decades giving advice on health insurance.

Now, she’s the one asking questions.

After her long-time primary care physician left Texas, Vise got two recommendations from friends.

“I called,” she says. “Neither one of them will take me because I'm a Medicare patient.”

Vise and her employer paid Medicare taxes her whole career.

So she was stunned to learn how Dr. Mina Sinacori views the government health program for senior citizens.

“Medicare is charity care,” says Sinacori. “We love our Medicare patients, we want to provide for our older patients, but physicians simply cannot afford to.”

Sinacori, an OB/GYN, says Medicare’s current reimbursement doesn’t even cover her costs.

And unless Congress acts by April 1, those reimbursements will be cut by 21.2-percent.

“With further reductions in payment,” says Sinacori, “we're going to see fewer and fewer physicians taking Medicare patients.”

This, as 78-million baby boomers hit retirement age starting next year.

Maybe that’s why President Barack Obama mentioned Medicare by name, in his full-court press to pass a health care bill by next Thursday.

“Reining in waste and inefficiencies,” says Obama, “we are going to be able to help ensure Medicare’s solvency for an additional decade.”

Mina Sinacori sees universal coverage as a noble goal but says Uncle Sam’s Medicare is not what the doctor ordered.

“If you think of it as a pilot program for national health care, it has failed, failed miserably.”

Congress keeps postponing that 21.2-percent Medicare pay cut; the latest proposal would put it off until October.

To doctors, that’s a bunch of Bandaids on a policy that requires surgery

For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524

Are Medicare Cuts in OUR Best Interest?

The California Medical Association said Friday it’s calling on Congress to “act immediately” to prevent deep Medicare cuts that are slated to take effect Monday, saying the 21 percent cuts to doctors’ reimbursement in the federal program “would hamper senior citizens’ access to care and force physicians to contemplate turning away patients or dropping out of the program altogether.”

However, Congress has adjourned for the weekend, so an immediate reprieve is unlikely. (The House of Representatives has passed a bill blocking the Medicare pay cut for doctors, but the U.S. Senate has not.)

The dance involving Medicare cuts and national and state medical associations’ anguished concerns over them is one that takes place every year in Washington, D.C. But this year, the debate over President Obama’s health reform package and Thursday’s Health Care Summit resulted in the issue getting shunted aside, at least for the moment.

The Sacramento-based CMA said the looming 21 percent cuts to doctors’ Medicare reimbursement -- meant to keep the overall system solvent over the long term -- are “unconscionable.” It joined the American Medical Association, AARP and other groups representing seniors and physicians to attack the pending cuts, and is encouraging its 35,000 physician members in the Golden State to contact U.S. Sens. Barbara Boxer and Dianne Feinstein and their congressional representatives about the issue.

“It’s unconscionable that Congress has not intervened to prevent this coming train wreck,” said Dr. Brennan Cassidy, the state medical association’s president. “Sadly, if these cuts take effect, senior citizens will have a tougher time getting access to a doctor because many physicians will not be able to afford to deliver care under Medicare.”

Proponents of the cuts argue that unless programs like Medicare and Medicaid are limited, they will consume ever-greater portions of the federal budget, threatening its overall solvency.


For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524