Silver BUZZ - 02/15/24

3 Signs You Should Absolutely Apply for Social Security in 2024

Excerpt from Motley Fool, 01/30/24: When to apply for Social Security is an individual decision, and the right answer varies from one person to the next. You must consider life expectancy and your financial situation when deciding when to apply. Delaying Social Security increases your checks slightly each month until you turn 70.

Our take: Without a crystal ball to precisely predict lifespan, there are situations where opting to start Social Security at 62, particularly for those with lower incomes, is a sensible choice. Many of us have witnessed cases where friends or family members passed away at ages like 63 or 66, and in hindsight, initiating Social Security benefits at 62 could have made a significant difference for loved ones or eased financial burdens.

Even within a single household where two individuals are eligible for Social Security, one might be a lower earner or not earning at all and opt to begin receiving a reduced Social Security benefit earlier, while the other might be a high-income earner and choose to wait. As noted, delaying until age 70 within the 'age 62 to age 70' range increases the Social Security payout. However, once again, without a crystal ball, it's impossible to know for certain what the best course of action is. View full article.

10 Reasons Why Medicare Advantage Enrollment is Growing and Why It Matters

Excerpt from KFF, 01/30/24: For the first time in Medicare’s history, more than half of all eligible people with Medicare, or 30.8 million people in 2023, are enrolled in private Medicare Advantage plans. Medicare Advantage plans are offered by private health insurance companies that receive payments from the federal government to provide Medicare-covered services. People with Medicare have a choice between traditional Medicare (sometimes called fee-for-service Medicare or Original Medicare) and Medicare Advantage plans. The growth in Medicare Advantage enrollment is driven by a number of factors, including the Medicare payment system, which has served to attract and retain insurers and beneficiaries, rather than reduce Medicare spending.

Our take: The article highlights the surge in Medicare Advantage (Part C) plan enrollment, driven by incentives and aggressive marketing. However, it primarily compares Medicare Advantage plans to 'original Medicare,' which inherently has coverage gaps, prompting the introduction of Medicare Advantage plans to address these gaps. It overlooks key advantages of Medigap plans (also known as Medicare Supplement Plans), such as no restrictive networks, few referrals, no cancer copay (compared to 20% on non-Medigap plans), and low out-of-pocket maximums (contrasting with up-to-$8000/year deductibles on Part C plans)...all for a modest monthly premium (usually between $125 and $225/month). The added burden that all Medicare plans (including substitute plans like Medicare Advantage) must also satisfy the qualifications of Part A and pay for Part B ($174.74 base rate in 2024) perpetuates misconceptions about "free" Part C plans. As costs soar for providers, equipment, prescriptions, procedures, etc., the increasingly complex landscape policymakers must navigate is revealed. Read full article.

I'm 68 and My Long-Term Care Insurance Now Costs $600 Per Month. Is This Too Much?

Excerpt from yahoo! finance, 02/01/2024: Health insurance and Medicare, on the other hand, don't pay for residential care. This is what makes long-term care insurance so important for retirement planning. As the American Council on Aging found in 2021, staying in a nursing home can cost more than $100,000 per year. Meanwhile, the median cost of a private room in a nursing home is expected to reach $13,267 per month by 2034, according to Genworth.

Our take: 'Shocking' doesn't quite capture our reaction to the cost estimates for 'long term care' in the article. Adding clarity, Medicare will cover most medical services during a long-term care (or nursing home) stay, raising questions about what exactly one is paying for. As the article mentions, 'It is not uncommon for people to sell off family homes and liquidate their retirement portfolios to afford assisted living.' The gut-wrenching reality begins to set in. Long-term care policy costs hinge on several key factors: your age when purchasing the policy, coverage amount (usually less than 50% of the monthly bill!), duration of coverage (lifetime or capped years), whether coverage levels grow with inflation, and other policy-specific variables. It's worth noting that other financial planning aspects may impact how you pay for long term care, such as asset liquidity, whether a spouse remains in the 'family home,' and more. Perhaps you gifted assets to family over five years ago, or your home is in a specific trust — maybe you'd be fine with a Medicaid shared room. There's a lot to consider, and sooner is better. Read full article.

‘Sorry I am dead’: Why a ‘death note’ is as important as having a will, advisor says.

Excerpts from CNBC, 02/02/2024: A “death note” is more informal than wills and other estate planning documents, but perhaps just as important, said certified financial planner Doug Boneparth. Its contents ease the burden on loved ones when you die. The document might contain login information for financial and other household accounts, important points of contact, the location of physical items like home and car deeds, and one’s wishes for their online presence like social media.

Our take: What a fascinating and interesting read, and very eye-opening. A traditional will — whether you use a self-guided form or software — can seem like a non-personalized and overly-simple administrative process and document. Though it may address vital questions and answers in a legally compliant and binding way, it does seem to be a bland way to pass on your legacy. However, the 'death note' described in this article is presented as a truly interesting complement to a traditional will. A favorite sentence from the article reads, 'This letter is more to help you take control at a time when everything feels out of control,' and another reads, 'It’s not just about money; it’s about memories we wanted to keep,' and other practical aspects of the transition a loved one is having to go through when you pass on. What a better near-final thought to experience, that you've actually shared everything you wanted, for your sake and theirs, especially when the unexpected happen. Read full article.

Redesigning Retirement - It’s time for a new deal between employers and older workers.

Excerpt from HBR, Harvard Business Review Magazine, March-April 2024: Today’s workforce and workplace are in unprecedented flux. Organizations have serious talent gaps to fill, for all sorts of reasons: high employee turnover, low employee engagement, the dramatic shift to remote and hybrid work, the continuing Baby Boomer retirement wave, rapid advances in technology. Many of the most critical positions require sophisticated skills, experience, and social acumen. Those needs can’t all be met simply by hiring and training inexperienced workers or leveraging AI.

Our take: HBR's article is insightful on quite a few fronts and really considers the gaps that exist on all sides of the voids evolving from seasoned skilled workers leaving the workforce and opting to work less or not at all.

Every day in the U.S., 10,000 Americans reach the traditional retirement age of 65, and whereas "retirement" is an antiquated concept for many—especially those on their own who need or expect ongoing income. Others are financially sound without traditional employment income but want to 'work' their mind, contribute to a team, serve a customer, et al. In most of these scenarios, however, the workforce norms are working against the 65+ worker. Quite often, older workers have progressed financially over their careers, and they've become relatively expensive for an employer battling to grow their toppling sales and control their costs with staff costs being a large cost center. The depth of experience of a 65+ is not always on display, either, often due to the role the worker possessed not being flexible enough for the seasoned employee to leverage it in the marketplace to the benefit of the employer. This is especially true when managers with limited experience oversee staff members with greater years of experience—note, this is not a critique of younger management staff, just a recognition they have not had the depth of experience in their career 'rearview mirror'.

In summary, HBR says it best... "We need to overcome lingering ageist stereotypes and start thinking of older and retired workers as a large, versatile, and valuable labor pool—one that’s significantly underutilized." Read and listen to the full article.