Saturday, July 11, 2020

Covid-19 will Lower Social Security Benefits for People Born in 1960

Congress Needs to Fix Social Security Problems (AARP)
The Covid-19 pandemic is going to hit Baby Boomers hard, even if they never catch the disease.  Some of them saw their 401(k), IRA, and other retirement plans drop in value when the stock market declined earlier this year.  Others wonder where they can safely get a fair return on their savings, because interest rates are so low. A significant number of older workers lost their jobs this year, and some were forced into early retirement, requiring them to take their Social Security benefits years earlier than they planned.  Some have chosen to retire early because they are afraid to go back to work during the pandemic. All these events are likely to affect their retirement income for the rest of their lives.

What most of us did not know is that people who happened to be born in 1960 are are going to be affected more than everyone else.  This is because of the way Social Security benefits are calculated, according to an article in Forbes by Janet Novack, titled "Covid-19 Side Effect: Social Security Retirement Benefits for Boomers born in 1960 Will Take a Big Hit."

How Much Will People Born in 1960 Lose in Benefits?

Forbes reports that, "median income workers born in that year, assuming they claim Social Security benefits at the 'normal' retirement age of 67, will lose $2,511 a year in annual benefits."  This is according to calculations by Andrew Biggs,  an American Enterprise Institute resident scholar, Forbes contributor, and former principal deputy commissioner of the Social Security Administration. "Assuming those average income workers collect benefits for 18 years, the present value of their lost lifetime benefits would be a hefty $45,859," he estimates.  "High earners, with their bigger benefits and longer average lives, would see annual benefits claimed at age 67 cut by $4,142 a year and suffer lifetime losses of $86,177 over 23 years. Low earners would lose $1,571 a year or $24,121 over a 13-year life expectancy, Biggs calculates."

Why Will People Born in 1960 Lose More Benefits than Others?

The reason for this loss is based on a very complicated way that benefits are calculated.  Essentially, they will be harmed as an indirect result of the high number of unemployed people in 2020.  Because of unemployment, the Average Wage Index (AWI) for 2020 is expected to be about 9.8% lower than in recent years, and this will permanently reduce benefits for people born in 1960.  This group is made up of people who are turning 60 years of age in 2020.

Whenever the Average Wage Index (AWI) drops, it permanently lowers the Social Security benefits for people turning 60 during that year. This is because the worker's future benefit amount is based on an average of their 35 highest earning years, adjusted by the AWI for the year they turn 60.  If the AWI is higher than prior years, their benefits will be adjusted higher. If the AWI drops, however, their future benefits will be reduced.  Even if the AWI moves higher again during the years after you turn 60, your benefits will not be adjusted up. The adjustment is only made the year you turn 60.  In 2020, it will apply to people born in 1960.

What Can You Do About the Lowered Social Security Benefits?

The majority of people who will be affected by the lower AWI in 2020 have no idea that it could permanently reduce the amount of Social Security they will receive when they retire.  As a result, there has not been a large outpouring of concern expressed by the affected people to members of Congress.  People who will be harmed, however, need to let their Representatives and Senators know how this adjustment will hurt them, so Congress can correct the problem.  We are fortunate the staff at Forbes have pointed out this problem.  In their article "Covid-19 Side Effect: Social Security Retirement Benefits for Boomers born in 1960 Will Take a Big Hit," they even list the specific steps Congress could take to rectify the problem. Hopefully, they will pay attention.

The Bigger Problem for Current and Future Retirees

This issue for people born in 1960 is part of a bigger problem for retirees, and both senior citizens and Congress will need to address these issues in the coming years.

Individuals are going to have to decide what changes they may need to make to their investments in retirement plans, particularly if their 401(k), IRA and other retirement accounts have suffered significant losses.  In addition, the income they can earn off their savings from dividends and interest may not be as great as they had anticipated when they were doing their financial planning.  Everyone needs to learn everything they can about how Social Security and Medicare work, so they can maximize their personal benefits. 

Congress needs to decide how they are going to address shortfalls in the Social Security and Medicare trust funds, which are currently expected to be gone in little more than a decade.  As part of addressing these problems, they should also address any other glitches they find in the programs, such as the one described above for people who were born in 1960.  Most Americans are dependent on these programs either for all or a substantial portion of their retirement income. As a result, everyone should contact their Senators and Representatives and pressure them to address these problems as soon as possible.

With an election coming up in November, before you vote you may want to contact your current Senators and Representatives to see how they intend to address these problems, and then contact their opponents to learn the approach they favor, should they be elected.  Very few things will affect older Americans more than the future of Social Security and Medicare, so you want to vote carefully.

If you are interested in learning more about Medicare, Social Security, financial planning, common medical problems as we age, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission to support this blog, at no extra cost to you.

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Photo credit: Google Images from AARP

Saturday, July 4, 2020

Covid-19 and other Infectious Diseases: How to Lower Your Risk

As everyone knows by now, in the spring of 2020, a new coronavirus named Covid-19 swept around the world.  By July, over 525,000 people had died of the disease worldwide, and approximately 130,000 of those deaths were in the United States.  Since then, deaths have continued to rise daily.

Thousands of additional deaths from this disease have been estimated, but not been counted in the official tallies, because most of the early deaths, before the pandemic was recognized, were recorded as pneumonia or influenza.  Many other people died at home, and their deaths were not listed in the official numbers.  Some nursing homes still do not list the cause of death for their residents as Covid-19, when the deceased person also had other serious illnesses.  As a result, we may never know how many people actually died of Covid-19.  By the time the pandemic is over and a vaccine has been distributed, deaths are likely to exceed one million worldwide and at least a quarter of a million in the United States.

Of course, Covid-19 is not the only contagious disease we need to worry about.  We humans are also highly susceptible to other common communicable diseases including influenza, norovirus (the stomach flu), meningitis, whooping cough, MRSA, tuberculosis, strep throat, and the common cold.  The good news is that the steps we take to protect ourselves from Covid-19 may also protect us from some of these other illnesses. What are some actions we can take to keep ourselves safe?

How to Lower Your Risk of Covid-19 and Other Infectious Diseases

Stay home and Stay Safe - This is the best policy for anyone who is over the age of 70, or is immune compromised, or who is already fighting a chronic disease.  This could include a child fighting cancer, a young adult who is a smoker, a middle aged man with diabetes, or a senior citizen with chronic kidney disease or a history of heart attacks.  If you fall into a high risk group, you should stay home as often as possible and, in particular, avoid large indoor gatherings, which is where you are the most vulnerable.  This means avoiding bars, houses of worship, weddings, funerals, parties in a private home, concerts, sporting events, movie theaters, indoor restaurants and other places where it may be difficult to maintain a comfortable distance between you and everyone else.

Whenever possible, any gathering you choose to attend should be held outside, with only a few people, and the ability for individuals or couples to stay six feet or further from others attending the same event.  For example, a family barbecue could be arranged with separate tables, separate food, and separate utensils.  Ideally, people should sit much more than six feet apart, when possible.

Maintain at least a six foot distance from other people, and further, when possible -  Most of us cannot stay home all the time.  We may have to go to work, shop for food, get our car repaired, see a doctor, or handle other business.  We may also occasionally go to an event we cannot avoid.  As much as possible, we want to avoid inhaling the air being expelled from other people. If you are around people who are speaking, yelling, coughing or sneezing, you will want to stay as far away from them as possible, especially if you are indoors.  When people are excited and speaking loudly, coughing, or singing, they can expel large amounts of air.  A virus can travel 10 to 25 feet, especially after a sneeze, and hang in the air indoors for hours.  Air conditioning can further circulate it. This can happen even when the person carrying a disease does not know they are sick.  They could be a "super-carrier," despite appearing to be perfectly healthy.  In order to minimize your exposure, you have to assume that everyone you pass could be carrying either Covid-19, influenza, tuberculosis, or another contagious disease. 

Stop Shaking Hands and Hugging People - Of course, you can still hug and cuddle with someone you live with. However, stop touching people who do not live with you, including grandchildren and other relatives.  It is far better to keep some distance between you.  Greet your friends and neighbors with a smile, a nod and a friendly wave.

Wear a face mask when in public - Wearing face masks reduces the distance the virus can travel in a conversation, cough, or sneeze. A variety of styles and colors are available.  If you wear a mask and the other people around you are also wearing masks, everyone has dramatically decreased the risk that any of you could spread a respiratory disease to one another.  Wearing a face mask is a compassionate, thoughtful way to treat other people. 

Another option is to wear a face shield.  They may be a more comfortable option when walking outdoors, especially if you avoid being near other people.  You can even find hats with face shields attached, like the one I am wearing in this photo, while walking on a nearly deserted beach.  They come in a variety of styles and colors. When I am outdoors and no one else is nearby, I feel safe with just this hat with the detachable face shield. Indoors, I always add a face mask. (Ad)

Cover your mouth with your elbow when you sneeze or cough - This simple move will decrease the risk that you are spreading a virus.  It reduces the distance a virus can travel, and you will not be coughing into your hand and then touching doorknobs, handrails, elevator buttons, and similar items other people may touch.

Wash your hands often - Although most people get Covid-19 from inhaling particles containing the virus, researchers believe it is also possible to touch something with the virus on it, and then transfer it to your nose, mouth or eyes, giving it a foothold in your body.  When you cannot wash your hands, use hand sanitizer to kill any virus you may have picked up.  It is a good idea to always carry some with you in a small container.  Make sure it contains at least 65% alcohol, and do not leave it in a hot car. (Ad)

Try not to touch your face - That may seem like an impossible habit to break, because most of us touch our faces several times a minute.  However, the less you touch your face, the lower your risk of accidentally infecting yourself.

Disinfect everything you touch frequently - Since it is so hard to avoid touching our faces, it is also wise to keep the things we touch as clean as possible.  Use alcohol wipes to clean electronic items we touch frequently, such as our cell phone and computer keyboard.  Use disinfectant cleaner on other items such as doorknobs, refrigerator handles, and similar items. If the items you touch are clean, and you also wash your hands frequently and avoid touching your face, you will have sharply decreased your risk of picking up any infectious diseases with your hands. (Ad)

If you take the above actions, you may not completely avoid getting Covid-19 or another infectious disease, but you will have substantially lowered your risk and, hopefully, will enjoy a generally healthier life.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

If you are interested in reading more about common medical issues as we age, where to retire, financial planning, Social Security, Medicare and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles.

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Photo credits: Pixabay

Saturday, June 27, 2020

Insulin Co-pays Capped at $35 for Medicare Beneficiaries in 2021 - What You Need to Know

Lower Medicare insulin co-pays could benefit many people.
Drug prices continue to be a concern for many senior citizens.  In particular, the cost of insulin has been a problem for several years, as prices have increased, often placing a heavy burden on retirees who are living on a fixed income.  Fortunately, help is on the way in 2021 for the millions of diabetic retirees who are dependent on insulin. 

This week, Baby-Boomer-Retirement is delighted to have a guest post from Medicare Supplement expert Danielle Kunkle Roberts, founder of Boomer Benefits, the 5-Star rated Medigap agency she founded.  In her guest post, below, she explains how the new cap on insulin co-pays for Medicare beneficiaries could benefit you.

Insulin Co-pays Capped at $35 for Medicare Beneficiaries - What You Need to Know


by Danielle Kunkle Roberts
Diabetes has been around for centuries, inciting major health problems for those impacted by the disease. According to the CDC, nearly 80,000 deaths a year in the U.S. can be attributed to diabetes. This makes diabetes the seventh leading cause of death in America.

For many people, insulin is a lifeline for controlling their diabetes, enabling them to live a somewhat normal life. When taking a closer look at seniors with diabetes, specifically, there are over 3 million Medicare beneficiaries who use at least one form of insulin. 

In 2020, one vial of insulin can cost up to $250 and some seniors need more than one vial a month. The co-pays for insulin can fluctuate throughout the year. The inconsistency of costs can make it challenging for someone on a fixed income to budget, and can often make it difficult for them to afford their insulin. 

Fortunately, there is great news coming for Medicare beneficiaries in 2021. After many years of calls for reform in the amount senior diabetics pay for insulin, legislation has been put into place that will drastically reduce the out-of-pocket costs for seniors.

Part D Senior Savings Model

Nearly 10,000 people age into Medicare each day, and 1 out of 3 beneficiaries have diabetes. Even with a national program like Medicare, many beneficiaries are left paying high out-of-pocket drug costs.

On March 11, 2020, the White House made an announcement which introduced the Part D Senior Savings Model. The Part D Senior Saving Model will work with the major drug manufacturers of insulin to dramatically reduce the cost of insulin to Medicare, and then pass those savings to beneficiaries in the form of lower co-pays.

The Centers for Medicare and Medicaid Services, or CMS, is encouraging Part D sponsors to offer fixed and predictable co-pays for insulin. The federal government has entered into partnerships with drug manufacturers and created a plan to ensure lower, consistent co-pays can be deliverable.

With the predictable cost of insulin, it is estimated that there will be a 66 percent decrease in out-of-pocket spending for Medicare beneficiaries. 

What to expect in 2021

The response to the restructuring of insulin co-pays under Medicare Part D has been positive from most of the players involved. Along with many of the major insulin manufacturers, 88 private insurance companies and over 1,700 Part D and Medicare Advantage plans have agreed to participate in the new Senior Saving Model. 

The plans which participate in the Model will have government regulated requirements they must follow. For example, all participating sponsors must provide both pen and vial dosage forms for the four types of diabetes in the drug formulary. Additionally, the drug manufacturers which participate in the Model must include all marketed drugs that contain insulin, no exclusions.

As of 2021, Medicare beneficiaries who are enrolled in one of the participating plans will receive a 30-day supply of insulin for no more than $35 out-of-pocket. Predictions estimate that beneficiaries who use insulin will spend around $420 annually, which is a colossal savings when compared to the fact that many seniors currently pay that much every month. 

The last bit of good news on this is that private plans like Part D and Medicare Advantage plans are competitive among carriers. That said, it is likely you will find plans that are offering co-pays less than the $35 max in the upcoming Annual Election Period.

Enrolling in Part D

In September 2020, the Centers for Medicare and Medicaid Services, or CMS, will release the premiums and co-pays for the participating plans. During this time, you will want to utilize the Medicare Plan Finder tool on Medicare’s website. This tool has been updated to filter out the non-participating plans in the Part D Model, which will make it easier for you to find a plan which is a part of the Model.

The Annual Election Period is when a beneficiary can change, switch, or drop their Medicare Advantage or Part D plan. The AEP will begin on October 15, 2020 and end on December 07, 2020. You will receive an Annual Notice of Change in the fall, and you will want to thoroughly examine it to ensure the Model’s plan has more to offer before you enroll.

In 2021, Medicare beneficiaries will finally receive their insulin at a reasonable price that is long overdue. CMS has mentioned that if this insulin savings model turns out to be a success, they hope to eventually expand it to other drugs. When researching the different plans, make sure you choose the most cost-effective option that covers the medications you need. 

About Danielle Kunkle Roberts:  She is a founder of Boomer Benefits and a frequent contributor to the Baby-Boomer-Retirement blog.  Her 5-Star rated company is a member of the National Association of Medicare Supplement Advisors and the National Association of Health Underwriters.  They are licensed in 48 states.  Several readers of this blog, as well as some of my personal friends, have used her agency and been very satisfied with the assistance they received.  You can contact them at 855-732-9055.

Are you confused about how to get the most out of Medicare?  You are not alone.  You may find it helpful to get the handy reference book, "Maximize your Medicare: 2020-2021 Edition."  It provides useful information which will quickly answer common questions. (Ad)

If you are interested in learning more about Medicare, Social Security, common medical issues as we age, financial planning, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission to support this blog, at no extra cost to you.

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Photo credit:  Pixabay

Saturday, June 20, 2020

How to Downsize without Moving and Earn Extra Money, Too

The Downsize Side Hustle
Are you thinking about downsizing to a smaller home, but do not want to leave your current one?  Are you attached to your friends and neighborhood, even though you really do not need all that space?  Are you facing the dilemma of wanting to save money by downsizing, but realize that the savings would be small?

If you would love to stay where you are, but need to have extra income in order to manage it, this week's guest post by Art Berry, the author of the inexpensive book, "The Downsize Side Hustle," may be perfect for you.  The book describes the personal experiences of the author and his wife in creating an extra source of revenue from their home, and avoiding the need to relocate.  (Ad)

The book explains exactly how the author and his wife were able to carve out extra living space in their home, which they were then able to rent out.  It includes very specific details on how much it cost them to convert some of the living space in their home into a separate apartment, how much rent they were able to charge, the estimated increased value it added to their home, and the difference it made in their utility bills.  The author is very thorough in the information he provides, and even explains issues you may want to consider before doing the same thing ... such as checking with your city and HOA to see if there are restrictions on creating a second living space within your home.

You can read more about the process in his own words, below, and then decide if you would like to order a copy of the book to learn more.

Is a Downsize Side Hustle for you?

by Art Barry

I, for one, grappled with the question of: Do we age in place or downsize and move? There are many possibilities. I spent a lot of time researching what might be best for me, my wife, and the four-legged pack we affectionately refer to as "the mutt sisters." Our dilemma was that, if we downsized, we would spend nearly as much for a new, smaller home as we would receive for our existing home in the same city. I wondered if there was a way we could downsize in place and turn the unused portion of our residence into a private guest quarters which we could lease. The research I did led me to believe that we could convert about 25 percent of the space to a guest quarters or, if you will, a "granny pod," and rent it to traveling nurses and other medical personnel who work with the four major hospitals in our city. We call it our downsize side hustle.

Recent articles seem to indicate a "Silver Tsunami" is coming with regard to housing in the U.S. The author of one article pointed out that many seniors are opting to stay put because of the high cost of living in a retirement community. This phenomenon may have extreme effects on the housing market for the foreseeable future. This makes a downsize side hustle worthy of consideration as a way to age in place and increase retirement income. Let me point out that downsize and dilemma start with the same letter of the alphabet. Downsizing presents opportunities, as well as dilemmas, for those about to retire, as well as for current retirees. Early in the process, I decided to publish a book about the project. I hope it will help others enjoy the success we had. It is one way to make money in an economic environment which is absolutely shifting away from and creating real obstacles for retirees and older homeowners. 

What did it cost? How long did it take? Who should we lease to? Were we successful? I provide the details for everything we did in the book and how it turned into a success. Our first tenants, an ICU nurse and his wife, leased our property for $1,000 per month.

* * * * *
If creating a second living space in your home is something you may want to consider doing, Art Berry's inexpensive book, "The Downsize Side Hustle" contains a step-by-step narrative of what Art and his wife Sharon did, their research, sources, expenses, reference materials, and author FAQ's.  Anyone who is considering trying the same thing will find the information they provide very helpful.  As the author of this blog, I was very impressed by their accomplishment, and the detailed information they provide in their book.  (Ad)

If you are interested in learning more about financial planning, Medicare, Social Security, common medical issues as we age, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission to support this blog, at no extra cost to you.

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Photo credit: Amazon cover photo by Deborah Lynn Johnson