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Home Health Care for Retirees

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For some retirees, nursing home care is simply out of the question, due to financial restraints or specific health problems.  For these retirees, there are other options for long term care which may be more affordable, or may be a better fit to the retiree’s lifestyle.  Home health care is one of these options.

 

With home health care, a retiree can stay in his or her home while having licensed skilled care technicians check in daily.  Most modern long term care insurance policies include provisions that allow in-home care.  While traditional long term care insurance often did not offer coverage for this type of care, most modern policies include a rider (an attachment, schedule, amendment, or other writing that is added to a document in order to modify it) that covers home health care.

Options for Retirees Who Don’t Qualify for Long Term Care Insurance

Some retirees (especially those who have pre-existing conditions) may find it difficult to qualify for Long Term Care Insurance, including Home Health Care.  For those who don’t qualify, there are other options like Home Care services.

Home Care is a lower cost alternative to both nursing home care and traditional in-home care.  Anyone in need of care can sign up for membership with a Home Care Service and pay a monthly, semi-annual, or yearly fee to receive care for 25 hours each week in their own home.  Most of these companies provide varying levels of service which range from $1,500 annually to about $5,000.  Compared to the $75,000 or more required each year for nursing home care, Home Care can be very affordable.  It also often comes packaged with a discount medical plan, which could save you money compared to Medicare or Private Health Plans.

Home Care should not be confused with Home Health Care.  The difference is that Home Health Care is provided by licensed doctors, nurses, and other health care professionals; while Home Care (also called non-medical care or custodial care) is provided by caregivers who are not licensed as medical professionals.  There are many companies that provide Home Care services, and some provide better care than others.  First Senior Financial Group’s educators can help you find a reputable, reliable Home Care provider in your area so you can be sure your care is being provided by the most highly skilled unlicensed professionals.

Tiptoeing through the Medicare mine field!

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Americans in their retired years need and deserve the peace of mind of knowing they can receive quality medical care without taking large sums out of pocket. The federal government offers just such a safety-net: Medicare. Put most simply, Medicare is health insurance for those 65 or over, and it’s funded chiefly through payroll taxes while you’re still employed. President Lyndon Johnson signed the plan into law in July 1965.

Those 65 or over can sign up with Medicare as a sole, joint or back-up insurance plan. The effective date of coverage is the first day of the month in which you turn 65. You must enroll in Medicare in order to be covered.

Medicare consists of four parts. Part A pays for hospital bills. Part B is optional coverage that pays for doctor visits and other medical services; most subscribers will pay $96.40 or 115.40 monthly, depending on their circumstances. Part C is another extra-cost option; it includes so-called “Medicare advantage plans” plans, offered by private insurance companies. Part C generally encompasses Parts A and B (often at an enhanced level of coverage), as well as Part D, which features private plans that supplement the prescription drug coverages in A and B. Clearly this gets complicated, so call 1-800-MEDICARE to discuss your specific situation. The “Medicare & You” handbook is another excellent resource, usually updated each year. Check out the 2011 edition at http://www.medicare.gov/publications/pubs/pdf/10050.pdf.

While Medicare may be a godsend, it can also be a mine field. Educating yourself on the ins and outs of this unique program can prevent you from being denied coverage when you need it most. Following are some of the most common misconceptions about Medicare.

  • Medicare does not provide family coverage. You can be covered on an individual basis only.
  • It’s true that basic Medicare cannot deny you coverage, and that you cannot face higher premiums for being sicker than the average person—but many pre-retirees do not realize that recipients still must pay premiums, co-pays and deductibles. Therefore, chronic illness can still be devastating.
  • Your monthly Part B premium may be higher than $115.40 if you are single and earn more than $85,000, or married and earn more than $170,000 together with your spouse.
  • If you snooze, you lose! Those who decline to sign up for Plan B during their initial eligibility period may be socked with a permanent increase of 10% for each 12-month period in which they remained uncovered. Their premium will never drop to the rate most others pay!
  • Plain-vanilla Medicare does not offer the same menu of services, at the same levels of coverage, as a private health-insurance plan.
  • In any case, traditional Medicare does not cover routine dental care, eyeglasses, hearing aids, custodial long-term care, and health care outside the United States.
  • A Part C “Medicare Advantage Plan” typically restricts you to certain doctor and hospital networks. You may not be able to continue using your current family doctor or specialists.

Helpful hint: If you feel you have a specific problem that can’t be addressed by calling the routine Medicare number above, try the Medicare Rights Center at 1-800-333-4114.

Warning: Social Security Scams

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With 55 million people receiving Social Security in our country, it is not unimaginable that crooks are out to scam retirees and their families from their Social Security money.  This month, AARP.com has published an article titled “Watch Out for Social Security Scams.”  Explained below are ways Social Security recipients can avoid scammers’ traps.

First, a Social Security Administration (SSA) employee will never contact you by e-mail; therefore, it is an automatic red-flag if you are getting e-mails regarding your social security benefits.

If you are contacted by phone or letter by an SSA Rep, they may be contacting you if you have previously asked to update your records.  If someone is on the other line or writing to you stating that the SSA is updating their records, and they will need your Social Security number, birth date, mother’s maiden name, bank account number, etc., you can be sure someone is trying to steal your identity.  AARP suggests getting in touch with the SSA yourself at 1-800-772-1213 or by visiting a local office to confirm the person contacting you, the number they’ve used to contact you, or the letter they’ve sent you are legitimate.

The AARP also warns Social Security recipients to be wary of anyone who contacts them, says they are an SSA Rep, and offers a bigger Social Security check in exchange for a “filing fee.” SSA employees are not allowed to charge filing fees and representatives may face prosecution if they even try.  If you believe you are eligible for a higher benefit check, then file an appeal on your own.  You may hire someone to help you with the complicated process, but an SSA representative may not ever be involved.  To better understand the appeals process, or if you have any questions about your Social Security, call 1-800-325-0778 to speak with a representative or to find an SSA office near you.

Lastly, do not be deceived if a scam artist contacts you saying you have some sort of special tax refund coming your way.  They may say you are able to claim a lump sum of what you are “owed,” based on the lack of Social Security funds or the stagnation in the Cost-of-Living-Adjustment the past two years. If the refund sounds too good to be true, it likely is—the lump sum will never be sent to you.  The reality of it is that con-artists of this type have been known to create phony IRS tax return forms to trick victims into divulging personal information, including their banking data.  Know that there is no such “tax credit” or “refund” in federal tax law.

With Social Security being a major topic in the news, and a popular topic among its 55 million recipients, it is easy to see how it has become a new scamming avenue for crooks.  Know how to keep your Social Security payments safe by following the advice listed and never give out personal information to an unreliable source.

5 Retirement Myths

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Those of us preparing for retirement may find our heads spinning with the deluge of advice received from friends, family, co-workers, and financial planners.  And with millions of Baby Boomers approaching retirement age, it is important to sort through this advice and develop a solid plan to move forward.  William Lynott of bankrate.com interviewed professionals from the financial industry and has developed a list of what he believes are the most common myths about retirement.  These tips could help you decide on the best way to proceed with your retirement planning:

  1. One million dollars will be enough.
  2. With an ever-increasing cost of living, one million dollars does not go too far nowadays.  In the past, this figure has provided a comfortable retirement, but financial professionals are now warning against under-saving.  You may want to plan on adding a bit more to your nest egg before you retire.

  3. You’ll spend less money after you retire.
  4. Many people may plan on tightening their purse strings after they retire, but they may not always be willing to do so when the time actually comes.  Early in retirement, you may have a desire to enjoy the time off with activities such as traveling, pursuing hobbies, and spending time with family.  All this can add up to a lot of money spent on plane tickets, meals, and anything related to your chosen hobby.  You may want to plan for an initial period of increased spending, or try to be frugal and save money for later in retirement, when you may need it for medical bills or other expenses.

  5. Social Security will take care of you.
  6. Social Security checks were never meant to be the only source of income for retirees, but many people are banking on the system to provide for them when they stop working.  It is important to realize that the average Social Security recipient makes less than $30,000 annually from the program.  Most people would agree this sum would not provide a comfortable lifestyle, especially for those with medical problems.  Even with cost-of-living adjustments, Social Security will not be able to cover everything you need in retirement, so you should plan on having other sources of income.

  7. Put all your money in bonds and CDs.
  8. These types of investments are considered to be safe by the majority of people, but they may not be considering other factors like inflation.  With today’s rock bottom interest rates, your bonds and CDs may not be able to keep up with inflation.

  9. Medicare is all you need in retirement.

While this program does cover a great deal of medical expenses incurred by retirees, it does not cover everything.  For example, Medicare provides nothing for assisted living or nursing home stays, something many retirees will need later in their retired years.  You may need a Medicare supplement policy to fill in the coverage gaps.  Unfortunately, these plans can be expensive, so it is a good idea to set aside a bit extra.

This list may seem to be full of grim facts, but it is not intended to frighten you.  Retirement is something we prepare for our entire working lives and we must realize that not every bit of advice should be taken to heart.  The economic situation in America is rapidly changing, so the old axioms may no longer hold water.  Make sure you speak to a financial planner to make sure you’re getting the most current information so you will have the best possible chance of retiring comfortably.

4 IRA Strategies to Save You Money

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IRAs are a great way for anyone to save money for retirement. With the current state of the economy, many people may be tempted to withdraw early from their retirement accounts. What they may not know is that doing so could cost them a lot of money, leaving them in a worse spot than they were previously. This and other mistakes cost retirees millions every year, but they can be avoided, if you know your IRA laws, and if you have a strategy that will allow you to get the most out of those laws.

IRA Age1.      Make sure you are 59½ before withdrawing.

This affects those people who want to withdraw early from their retirement accounts.  Know that withdrawing early is a bad idea, unless you need the funds to deal with some kind of emergency (some exceptions are available, including hardship withdrawals and an exception to withdraw up to $10,000 if you are a first-time homebuyer).  Most people approaching retirement age know that they will be hit with a 10% penalty if they withdraw funds from their IRA before reaching age 59½.  Although it is possible to avoid this penalty using the exceptions mentioned above, but it’s better to just wait a bit longer.  You should also know that the IRS is very specific about the 59½ year cutoff, up to the day.  So if you try to withdraw 181 days after your birthday, you will be in for a big surprise around tax time (in the form of that 10% penalty).

Money Market Accounts

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What is a Money Market Account?

A money market account works a lot like a traditional savings account, with a few restrictions.  Banks and Credit Unions offer these accounts to give themselves more freedom to use your money in exchange for a higher interest rate.  So while a typical savings account will get less than 1% interest these days, a money market account can gain more than 1%, making it a great place to park your money in the short term.

Restrictions on Money Market Accounts

Money Markets have a few restrictions you may not generally find in a savings account.  The first is a minimum balance.  These vary from institution to institution but can range from as low as $1,000 to as high as $25,000 or more.  If you do not meet your minimum balance obligation, you will be charged a fee.  Also, since money markets are considered savings accounts rather than transaction accounts, they must comply with regulations limiting the number of withdrawal transaction to third parties.  This is a monthly limit, and is designed to prevent you from using the money market account for daily transactions.

Benefits of a Money Market Account

  • Money markets are FDIC insured, protecting the money in the account up to $250,000.
  • They allow you to write checks on the account, although this is limited to around three per month.
  • In exchange for limiting access to your own money, banks will give you a higher interest rate.

Downsides of a Money Market Account

  • Liquidity of your money is less than it would be with a traditional savings account (although it is more liquid than it would be with a Certificate of Deposit).
  • Transactions are limited to six or less per month.
  • Minimum balances can be high, making money markets less than ideal for paying daily expenses.

Retirement: A different phase calls for a different outlook

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You’ve worked long and hard; you’re at the summit of your financial mountain. Now you are about to come down the other side of that mountain. You will use different financial muscles climbing down than you did climbing up. In other words, your financial strategy must change before you enter the retirement phase. You must start to move away from the thinking you employed in the Accumulation Phase, and the more risky investments you chose, to a more conservative approach, with the goal of preserving your nest egg always top of mind. You must ensure that your nest egg lasts as long as you and your spouse do. Furthermore, you have to prevent erosion of your accounts by staying ahead of inflation by at least 2% or 3%.

During the Retirement Phase you face a number of challenges that you were spared while in the working years or the Accumulation Phase of your life. Americans who are still in the Accumulation Phase investing in securities have three immense advantages:

1) They have a working paycheck that keeps up with inflation. Most retirees don’t. Social Security doesn’t keep up with the inflation rate. Whenever there are increases in Social Security the same increases take place with the out-of-pocket costs for part “A” of Medicare, so it becomes a wash. Additionally, even if you’re lucky enough to have a pension, most of them do not increase with inflation.

2) When the stock markets fall or crash, Americans in the Accumulation Phase can buy in low, because they still have a working paycheck that is keeping up with the inflation rate. Conversely, most Americans in retired years cannot practically take current income from their pensions or Social Security checks to buy into a down market.

3) Americans in the Accumulation Phase have the most important investment element available to them that most retirees don’t have: time (i.e., the time it takes to grow your portfolio back from a market downturn). Most Americans in their working years still have 15, 20, even 30 or more years to go before they retire and thus have the all-important luxury of time to wait for the stock markets to come back, while not having to depend on their developing nest egg to meet living expenses.

All three points above are fundamental parts of being successful with one’s investments in the stock markets. Weathering any stock market storms takes a sustained period of time, cost averaging (buying when the markets are down), and an income that keeps up with the inflation rates. It might sound difficult, but fortunately it’s not as hard as it once was.

“Since 1995,” says Phil Cannella, creator and host of The Crash Proof Retirement Show™, “breakthroughs in the insurance industry mean that American retirees don’t have to take on any market risk or ongoing market fees and can stay ahead of inflation and plan against healthcare risks. You owe it to yourself to investigate these breakthroughs. They are nothing less than a godsend for today’s retirees.”

Tips for the Flu Season

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Have you gotten your flu shot yet?  Getting the influenza (flu) vaccination is the first step to prepare for Flu Season, especially for people over 65.  The flu vaccination can be easily provided by your doctor or even a major pharmacy.  If you are afraid of needles, ask about alternatives that may be offered such as a nasal-spray flu vaccine or even vaccines using PharmaJet technology. PharmaJet is a noninvasive, needle-free injection which uses air pressure to penetrate the skin and deliver medicine.  After receiving your vaccinations, keep the following tips in mind during Flu Season:

1)      Avoid close contact: When people around you are sick, it is best to avoid close contact with them to prevent the spreading of germs.  Likewise, you should distance yourself from others when you are sick to avoid spreading illnesses.

2)      Stay home when sick: Not only will staying home from work when you are sick prevent illness from spreading, it will also help you get the rest your body needs.

3)      Cover your mouth and nose: Though we have been told this since we were children, covering your mouth and nose when sneezing or coughing can immediately stop germs from spreading.  If you do not have a tissue at hand, sneezing or coughing into the bend of your elbow works as an alternative to keep your germs away from others.

4)      Avoid touching your nose, mouth, or eyes: These three parts of the face are the main gateways for germs to invade your immune system, so do not touch them.

5)      Carry hand sanitizer:  If you cannot wash your hands with soap and water, a travel-size hand sanitizer will come in handy as it rids up to 99% of the germs we may carry.

Ways to Cut Spending in Retirement

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The general rule is that retirees need 80% of their working income to maintain their current standard of living. We have scoured the internet and have found an overwhelming number of helpful tips** to assist you in saving money each and every month!

  • Reevaluate Monthly Expenses – Take a look at your monthly bills and see what fees or services can be reduced if not eliminated. Are you paying for premium cable channels that you don’t even watch? Perhaps you have a monthly gym membership that you haven’t used in a year. Analyzing your monthly bills and getting rid of the excess is a sure way to reduce your monthly expenses significantly!
  • One Car Household – If you own two vehicles, yet neither you nor your partner is working, a significant way to reduce expenses is to become a one-car household. Even if you do not have a second car payment, the savings in car insurance alone makes it worth considering.
  • Switch to Store Brand Products –  Did you know that by simply switching to store-brand products you can save 25-50%?
  • Shop with a List: How many times have you walked into a grocery store to purchase “just a few items,” only to exit the store with a cart full of purchases? It is a proven fact that you are much less likely to make impulse purchases when you shop with a list. And don’t go food shopping when you’re starving!
  • Have Snacks, Will Travel – With just a little planning, you will be amazed at how much money you will save by eliminating unnecessary and expensive trips to the convenience store for food. Before you leave your home for more than an hour or two, grab a drink and snack to go! Better yet, make sure you put your drink in a reusable bottle!
  • Borrow Books and Movies –  Why buy expensive movies on demand or books from your local bookstore when you can borrow them for free from your library? Added benefit: you will also be helping to save a tree.
  • Travel Off Season –  When the grandchildren are back in school, travel costs go down. Next time you are planning to get away, take school schedules into consideration.
  • Discounts Galore –  From movie tickets to dining out, discounts for seniors are everywhere. Ask for a discount on every outing. You might be surprised to find how many exist!
  • Cash Only –  Whenever possible, opt to pay in cash. When you have a fixed amount of money in your wallet, you are less likely to overspend.
  • Dine at Home – Who says you can’t have a romantic candlelit dinner in the comfort of your own home? Even if you can’t resist the temptation of a restaurant-cooked meal from your favorite spot, try the take-out option next time. You will be amazed at how much money you can save when you do not have to pay for beverages or tips.
  • Credit Card Rates – If you are one to carry a monthly credit card balance, you can still save money by lowering your interest rates. Credit card companies are more willing than ever to work with their clients. A simple call could save you a bundle over time with interest expenses.

 

Bundle all these cost-saving tips together and you may have enough set aside for a major purchase—maybe even something you didn’t think you could afford in your retirement years!

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