The Looming Retirement Crisis for baby Boomers

A study conducted by The Blackstone Group, an independent research firm, on behalf of Bankers Life Center for a Secure Retirement outlines some very unsettling data regarding middle-income baby boomer retirement care preparedness. According to the survey above, the bleak financial reality of this demographic is that 79 percent of middle-income baby boomers have NO savings put aside to cover their retirement care. Couple this disaster savings scenario with the US government’s admission that for the first time since 1982 Social Security trust funds are being used to pay current benefits to recipients and Medicare’s reserves are being used to cover the costs of that program as well. It is the perfect storm of a looming retirement insolvency crisis.

Middle-income baby boomers for this study are defined as aged 53 to 72 with an annual income of $30,000 to $100,000 and less than one million dollars in investable assets. For those baby boomers in this demographic, a mere 4 percent of them have more than $100,000 saved for health care retirement planning, long term care, and general retirement preparedness. While 65 percent of these survey respondents prefer to receive retirement care in their current homes only 55 percent of them expected to be able to do so, and there is a disconnect at what age these care services will be required. A full 45 percent thought that assisted living circumstances would be needed between the ages of 71 and 80 while 37 percent said it would be between the ages of 81 and 90. The problem with these hopes is the ever-increasing presence of Alzheimer’s and other forms of dementia which can push retirees younger than ever into the need for assisted living and retirement care.

According to the survey, 40 percent of those surveyed consider retirement care planning to be a low priority or not one at all, 42 percent thought it to be a medium priority and only 18 percent identified retirement care planning as a high or very high priority. Incredibly 56 percent expected that Medicare would pay for retirement care as needed, including long-term care needs which Medicare does not cover. The costs of long-term care policies are cited as the biggest reason for not making the prudent insurance purchase.

Dangerous misconceptions about how much retirement care costs and how to pay for it exist. It may seem incredible, but the truth is that baby boomers are better prepared to die than to live. Among middle-income baby boomers, 81 percent have formally made at least one preparation for when they pass away, usually in the form of a will or trust, while only 32 percent have a plan as to how they will receive retirement health care should it become necessary.

The message is unmistakable; middle-income baby boomers need to address their underfunded retirement plans pronto. There is an overconfidence in this demographic that allows them to think they will be able to manage their and their spouse’s healthcare costs as they continue to age. The reality is that many of them are one bear stock market or health care crisis away from disaster. The federal government and its programs are just as unlikely to be able to stave off the financial crisis brought about by this willful ignorance of the costs of aging successfully.

If you are in these incomes and age brackets, it is time to take a realistic look at what you can do to better prepare yourself for the coming years ahead. Being financially unprepared to age brings stress and family discord at a time when you should be living your best life. Be proactive, contact our office today and schedule an appointment to discuss how we can help you with your planning.

Why Seniors Should Create an Estate Plan

When it comes to establishing wills and estate plans, older Americans outpace their younger counterparts. Still, a significant number — 19 percent of those over age 72 and 42 percent of those between 53 and 71, according to survey data — lack any type of estate plan.

Although managing these details can seem daunting, and even depressing, the task becomes far less unpleasant with proper understanding and planning. Estate planning is essential for seniors and for their family members to be prepared in the event of a loved one’s illness or passing.

If you or an aging loved one have been putting off estate planning, start with the basics and learn why it’s important take the focus off of the negative and shift it to the positive benefits.

Understanding the meaning of “estate”

In addition to the fear factor of planning for illness and death, many seniors dismiss its importance because they don’t understand what “estate” means, or they believe it applies only to those with significant wealth. In reality, an estate includes anything a person owns —  homes or other properties, bank accounts, automobiles and additional assets, and ownership of any licenses or patents.

A person’s estate also includes any liabilities such as mortgages. These debts will need to be settled before loved ones or beneficiaries receive any compensation or death benefits. An estate plan encompasses more than distributing assets and settling debts, however. It also outlines decisions about healthcare and other key things.

The estate plan’s role in self-advocacy

Estate plans help seniors establish important guidelines that allow them to advocate for themselves. This is essential for seniors who wish to retain their independence and protect their assets. In addition to creating wills and other important documents, an estate plan allows seniors to have a say in the quality of their long-term care — whether at home or in an assisted living facility — and to qualify for associated government benefits to help pay for that care. It also helps them to protect their life savings and outline their wishes should they become incapacitated.

Elder law attorneys can help clients develop strategies to enable seniors to better advocate for themselves in these scenarios.

What’s included in an estate plan?

A properly executed estate plan typically includes a Last Will and Testament, Living Will, and Medical and Financial Powers of Attorney. Let’s take a look at what each of these things are and the purposes they serve:

  • Last Will and Testament: Allows a person to determine who will inherit assets and appoint an executor who will make sure wishes are carried out.
  • Living Will: Allows a person to choose the type of care he or she wants should they become hospitalized and/or incapable of making decisions independently. A Living Will would, for example, outline a person’s wishes about certain medical treatments, such as blood transfusions, or whether or not they wish to be resuscitated.
  • Medical Power of Attorney: Appoints someone — generally a spouse or family member — to make decisions on a person’s behalf about medical care and treatment.
  • Financial Power of Attorney: Appoints someone — also typically a spouse or family member — who can make financial decisions on a person’s behalf. This includes allowing access to bank accounts to ensure bills and mortgages continue to get paid in the event of illness or incapacitation.

Establishing Trusts

Estate planning also includes provisions for developing Trusts. Trusts allow seniors to set aside money for specific people or charities while avoiding the long, drawn out process of probate. This allows heirs and beneficiaries to receive intended inheritances much more quickly.

While many trusts are revocable, meaning the senior can change or terminate the trust at any time, irrevocable trusts are often used to protect assets of a senior. Whether an irrevocable trust is right for your situation depends on a number of factors, including your health, what type of care you wish to receive and how you will pay for any care you may need in the future.

If you or your loved one has been avoiding this important planning measure, now is the time to begin. Being proactive increases options and makes the process far less stressful than trying to initiate planning or make important decisions during a health crisis or death.

Cost is another reason seniors often cite for avoiding planning. However, elder law attorneys can tailor plans to specific needs, making them more affordable. Contact our firm today to learn more about getting started with an estate plan that is right for you.

Medicaid Matters: Plan for When Your Ill Spouse Leaves Home

 

You may see it coming: Much as you want to and hard as you try, you just can’t take care of your ill spouse at home any more. At this emotionally difficult time, the last thing you need is the stress of not knowing where to find the money to pay for the steep costs of institutional care.

Advance planning is a must. As soon as you can – ideally at least five years before serious health problems arise – take advantage of many elder attorneys’ willingness to talk with you for free, or for a modest initial-consultation charge.

We are here to help you navigate the complexities of the Medicaid program. This is a governmental fund available to meet the staggering expense of institutional care, but the ins and outs of the qualification rules are complicated and mistakes can be costly. Here’s a thumbnail to help you grasp what your attorney will be telling you.

 

 

“Resources” and “Income”: The Difference

Medicaid assistance is available only to those who own very little. The Medicaid rules determine what “owning very little” actually means. A person can only own around $2,000.00 of what Medicaid calls “resources.”

Resources include cash in the bank, CDs, the cash value of insurance policies, investments, and the like. Income includes regular paychecks, Social Security, or payments received for child support. Both income and resources are potentially “counted” by Medicaid as “available.” To qualify for assistance, available income and resources must be carefully spent or transferred away.

 

Exempt Resources

Some resources are not counted or, in other words, are exempt. This means the Medicaid rules exclude them from adding up to the $2,000.00 limit. These resources are sheltered from Medicaid’s requirement that the applicant must spend down almost everything before assistance will be available.

A married couple’s residence, one motor vehicle, household goods and furnishings, medical equipment, jewelry, and other items are exempt. This means that an ill spouse can still qualify for Medicaid assistance even if the couple owns those resources. There’s no need to give them away or sell them to qualify.

The distinction between “exempt” and “non-exempt” assets can be tricky, though, and should first be assessed by a qualified elder-law attorney before any action is taken.

 

What the Well Spouse Can Keep

The Medicaid rules permit a spouse who remains at home to keep a portion of the couple’s resources. This is known as the “community spouse resource allowance” (CSRA). Of course you’d like to see the well spouse keep as much as possible within the CSRA limits. Planning can arrange the distribution of resources to make that happen.

Here is where the difference matters between “resources” and “income.” Medicaid distinguishes between the well spouse’s income and the couple’s resources. Resources over the CSRA limit must be spent down or carefully transferred. As to income, the well spouse can keep it up to a certain level, so he or she will have enough money to live on. The Medicaid rules call this the “monthly maintenance needs allowance” (MMNA).

For example, if the well spouse gets Social Security benefits of only $500.00 a month, but her allowed MMNA is as high as $2,000.00, it makes sense to convert some of the couple’s resources into raising her income up to the MMNA limit. This is not a simple matter, though, and should be done only on the advice of a qualified elder-law attorney.

Planning for Medicaid eligibility can be complicated. Please consult an elder-law attorney as soon as possible. The sooner you plan, the more strategies are available to protect your resources. An initial consultation with a qualified elder-law attorney, for free or for a modest amount, could save you many thousands of dollars.

Don’t delay.

Veterans, home health care and technology

Mountain Empire Legal firm logoThe Department of Veterans Affairs (VA) has become an unlikely and innovative pioneer in the quest to provide cost-effective, quality home health care for veterans. Although the agency has long been mired in controversies surrounding its programs, particularly arbitrary caregiver dismissals, the home health services sector of the VA has long been touted as an overall success story. As Thomas Edes, director of comprehensive geriatrics and palliative care programs for the VA puts it “We’re working in this environment of challenging budget constraints, and at the same time, we’re a very mission-driven organization. Put those together and what happens? That really pushes us to innovate.”

This innovation has seen home-based primary care for veterans quadruple since 2000, and all VA medical centers throughout the US now have a palliative care program as well. The VA Medical Foster Home program care has expanded from a pilot to a national program, recognized in at least 45 states and providing veterans housing as well as in-home care. These success stories are great news for veterans and a must for the Veterans Administration in part because the median age of a veteran is now 64 and the US aging veteran population is growing even faster than the senior civilian population.

It is not just the “new-comer” seniors straining the VA health care system. Nationwide the 85 plus population is on track to increase 70% from 2000 to 2020 according to the US Department of Health and Human Services. The overall unsustainability of the US health care system has forced the hand of the VA, and there is no more cost-effective way than through subsidized, at home family and community-centered health care and technology to meet veterans’ care needs.

The Official Blog of the U.S. Department of Veterans Affairs reports that Telehealth is revolutionizing veteran care and providing high-quality treatment for them. The VA Video on Demand is delivering convenient, accessible health care particularly to those 24 plus percent of veterans who live in rural and remote access locations. Telehealth is also important for those veterans who are disabled. Although a veteran might live in a city they might be unable to get themselves to a medical center for an appointment.

Assisted living technologies for veterans include assistive mobility equipment – an ever-expanding category including wheelchairs, all-terrain vehicles, exoskeletons and in-home ceiling track mobility systems. Each of these continue to be refined and specialized to meet the individual veteran’s needs. The Veterans Administration awards grants to develop technology to assist veterans and service members in modifying their homes. Adapted computer access and electronic aids to daily living and environment control units (personal assistants) provide customized interactive abilities for veterans.

Electronic cognitive devices help veterans who struggle with activities of daily living (ADL). These devices include personal digital assistants (PDAs), smartphones, pocket personal computers (pocket PCs) and other handheld devices, global positioning systems (GPS), reminder watches, pagers with reminder features, and digital voice recorders. The use of these devices helps a veteran stay on schedule with medications as well as stay connected with family, friends, and their medical monitoring community. Those veterans with Post Traumatic Stress Disorder (PTSD) are further helped with their ADLs when robots with artificial intelligence (AI) are introduced into their environment. These AI “tech bots” are capable of reading human facial expressions and can identify when a veteran is feeling particularly stressed, isolated, angry, or depressed. The robot can upload the information to the veteran’s caregivers thus alerting them to the need for human intervention. Wearable sensors can also alert a caregiver or medical professional when vital signs are outside of a normal, healthy range.

The VA will provide a payment to disabled veterans toward the purchase of a car or other transportation and additionally will pay for adaptive equipment, repair, reinstallation or replacement of necessary equipment due to disability. If a veteran has lost the use of at least one foot, hand, or has a permanent impairment to their vision or severe burn injuries or immobile joints that their limit mobility, the VA will help to fund the adaptation of the vehicle to make it fully operational to the veteran.

While the latest technology brings benefits to all seniors opting to age in place, the veteran community is especially helped. Many veterans would like the luxury of aging without combat or noncombat injury so inherent to military service. Some of the aging in place obstacles they must overcome are extreme, commensurate with the injuries (psychological and physical) they have endured. Navigating the benefits that are available to a senior veteran is complicated if you are not well versed in the process. Getting enrolled in the correct program and receiving benefits can also be a lengthy process, so it is best to seek help before wasting valuable time.

If you have questions or would like to discuss your particular situation, please don’t hesitate to contact us.

Estate Planning, Elder Law, What’s the Difference?

Estate Planning, Elder Law, What’s the Difference?

The short answer: Both share similar concerns. The longer answer? The differences make all the difference.

The Concerns are Similar

No matter what age we’re in, life can deliver some hard knocks. Hope for the best, but plan for the worst. We can get into accidents, especially when we’re young and under the impression that we’ll live forever. Whom would we like to be there for us if we can’t speak for ourselves? If we can’t pay the bills? Decide about our health care?

Both estate planning and elder law attorneys help you choose people you trust to stand in your shoes when you can’t speak for yourself.

As adults, we start families and assemble worldly goods. If we’re thinking realistically, we want to make sure our families are taken care of and who gets our property if the worst happens to us.

Both estate planning and elder law attorneys help you with those questions. Both kinds of attorneys also know how to protect your estate from tax burdens and to avoid the expense and delay of court proceedings.

The Differences Make All the Difference

Elder law expertise becomes crucial when we get older. We’re living longer, healthier lives – but nobody knows when we, or those whom we love, will get too sick to make decisions or to live independently.

It’s understandable, but not wise, to postpone thinking about these things. Delay or denial can mean that entire savings get wiped out paying for nursing homes. Misconceptions about government benefits can forfeit eligibility for them. If you want to retire from your own business, do you have a plan for a smooth and profitable transition? What quality of life can you protect? What housing arrangements can be made? What is the wisest allocation of financial resources to protect against as many foreseeable contingencies as possible?

This is where we elder law attorneys come into our own. We can help you face these difficult questions with your and your families’ best interests at heart. What we know can go far to spare you the distress and anxiety if you were caught unprepared. We know how Medicaid, Medicare, and Social Security work. We can help you manage retirement income benefits. We can steer you to financial arrangements necessary if you or yours need long-term nursing care.

These are difficult, complicated questions that require particular knowledge to answer. We elder law attorneys have studied long and hard for that knowledge. We have learned how to help you plan to enjoy the life you have, plan for when life becomes harder with age, and have something left over for your legacy.

Estate planning is only the beginning, contact our office to get started.

 

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