Where To Retire in the U.S. on Social Security Alone

The media is full of scary stories about how the Baby Boomer generation will never be able to retire because they have not saved enough money to supplement their Social Security.  It is easy to panic and feel that you have fallen into an impossible situation.

However, in the Yahoo! article, "The 10 Best Places to Retire on Social Security Alone," the authors provide a list of places in the United States where you can retire comfortably on the average Social Security amount of $31,000 a year for a couple.  They made it clear that this would not be a luxurious retirement, only that it would be possible to get by.

In addition, the article was based on the assumption that the couple would either have a paid-off mortgage or they would be paying the typical rent for that community.  In other words, if you are still making large house payments, even these areas are likely to be too expensive for you, based on only receiving the average amount of Social Security.  Shown below is the list from the Yahoo article.

Yahoo's List of the Best Places to Retire on Social Security

Albuquerque, New Mexico
Austin, Texas
Buffalo, New York
Columbia, South Carolina
Grand Rapids, Michigan
Jacksonville, Florida
Pittsburgh, Pennsylvania
Spokane, Washington
St. Louis, Missouri
Tucson, Arizona

You can find a link to the Yahoo article at the end of the article if you want more details about why they believe these cities were especially affordable.  Basically, all ten of them have relatively low housing costs and they have amenities that are appealing to senior citizens, including sports teams, senior centers, and high quality medical facilities.

I want to add that you do not have to move to the inner city of St. Louis or Pittsburgh, for example, in order to get the benefits of an affordable lifestyle in those states.  Most cities also have suburbs and small outlying towns in the surrounding areas that are also quite affordable.

In addition, I was pleased that this list included cities in temperate climates, such as Tucson, Jacksonville, Columbia, Albuquerque and Austin.  There is no reason for a couple to feel stuck in a frigid climate that requires them to deal with ice and snow on a regular basis in the winter.  There are many affordable places within the United States that also offer desirable lifestyles for senior citizens.

More Ideas for Affordable Places to Retire

When I read the Yahoo article and looked over the list for myself, there were a few things I observed.

*  All of the states on the list have MANY communities where people can find affordable places to retire.  Not everyone wants to live in a big city, especially not a crime ridden one like St. Louis.   However, most of the states of Missouri, Pennsylvania, Texas and Florida offer affordable housing ... and even the surrounding states.  Be sure to cast a wide net when you are looking for places to live.

*  Crime is particularly worrisome if you will be renting a cheap apartment in a big city.  It might be preferable to find a charming rental in a small town outside of the cities on this list.  I grew up in Missouri and lived in Texas for decades and I know there are hundreds of affordable small towns that are charming, friendly and within a reasonable drive of the larger cities on this list.

*  It is also important for people to realize that most couples can increase their Social Security to above the average amount simply by working an extra couple of years.  Therefore, they may be able to live on their Social Security alone and even afford a few little extras from time to time, as long as they are willing to defer their retirement a little bit.  There is no rule that says you have to settle for the average amount of benefits.  Many people have also found they can supplement their Social Security with fun part-time jobs.

*  For those people who have large house payments when they reach retirement, they have a couple of options.  If paying off their current mortgage is not attainable, they may be able to take the equity in their current home and use it to pay cash for a smaller home or condo.  Even if they cannot pay cash, they may be able to get a small, affordable, manageable mortgage that they will be able to handle after retirement.

*  Another option for people who are having trouble finding affordable housing is to check out the senior apartment complexes in their area.  Most cities and many mid-size towns have apartment complexes that are designed especially for older people.  If money is tight, you may even qualify for a subsidized apartment.  Contact your local housing authority or Department of Social Services to see what subsidies might be available.  I know of both single and married retirees who are living on Social Security alone in expensive areas like Orange County, California, but only because they receive housing subsidies.

The bottom line is that there are many options that are available to people who are just living on Social Security alone.  Do not feel that you have to limit yourself to only the cities on the Yahoo list.  There are many options available to you, as long as you are willing to search for them.  Millions of people retire every year in the United States with Social Security as their only or primary source of income.  You can find a way to do it, too.

Source:

The 10 Best Places to Retire on Social Security Alone

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Housing Costs Put Retirement at Risk

Your housing costs may be the biggest threat to your retirement.  Even if you have paid off your home prior to retirement, the cost of maintaining your home can remain high.  According to the Employee Benefit Research Institute, housing amounts to 43% of the expenses of retirees who are over the age of 75.

Danger For Those Who Still Have a Mortgage During Retirement

Part of the problem is the fact that most people are not paying off their mortgages before they retire.  In fact, the Consumer Finance Protection Bureau reports that about 30% of Baby Boomers still have a mortgage when they retire.  This has resulted in a higher mortgage delinquency rate for people over the age of 75.   The average person over the age of 75 who still has a mortgage currently owes about $80,000.  This can be an overwhelming amount for someone who hasn't worked in 5 or 10 years and is dependent on Social Security and a meager amount of savings.

The problem with owning a home when you are on a fixed income with limited resources is that, in addition to the mortgage, you will also have other housing expenses ... and many of them increase annually.  Among those expenses are property taxes, homeowners insurance, repairs, cleaning and lawn work.  In addition, utilities on a large home are likely to be higher than those for a much smaller property.  Furthermore, people who may have been able to do their own cleaning, repairs and lawn work when they were in their 60's, may find that they must pay to have these things done as they age.  As a result, the cost of home ownership may rise much faster than inflation.

Other Financial Risks Faced by Retirees

When housing costs are added to the fact that many people retire while still owing student loan debt, credit card debt and, sometimes, bills for medical expenses, retirees are advised to make significant adjustments to their lifestyles before they stop working.  If they don't, they risk going through foreclosure and bankruptcy later in life, when it could be even more traumatic for them.

If you are doing your best to set up a realistic budget for your retirement, you will want to read this report by the Social Security Administration:   Expenditures of the Aged Chartbook - 2010.  It contains a detailed breakdown of how people spend their money after retirement.

While you will want to read the chartbook for yourself, I wanted to mention that it shows the three largest expenses for retirees are housing, transportation and healthcare ... and those are all expenses that have been rising rapidly over the past decade.

Solutions

The solution for high housing costs is obvious.  Many financial advisers recommend that people downsize their lifestyle prior to retirement.  This may mean moving to a smaller home, condominium or townhome.  For some people, they may wish to take in a boarder or sell their home and rent ... letting someone else deal with repairs and lawn care.

Whatever you decide is the right approach for you, make sure you are taking your housing costs into consideration when you plan your retirement.

Sources:

https://time.com/money/3418195/retirement-housing-costs-threat/
http://www.marketwatch.com/story/housing-health-care-costs-are-retirement-killers-2013-03-28
http://www.ssa.gov/policy/docs/chartbooks/expenditures_aged/2010/exp-aged-2010.pdf

If you are looking for additional retirement information and ideas about downsizing, click on the tabs at the top of this page.  They will link you to hundreds of additional helpful articles.

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Hopeful News for the Future of Medicare

The November, 2014 "AARP Bulletin" listed some encouraging news for people who are on Medicare or who expect to enroll in Medicare sometime in the future.  Steps are being taken to help Medicare remain solvent somewhat longer than originally expected, even if Congress continues to drag its feet in making funding changes to the program.  Here is a summary of what AARP reported:

Medicare Will Spend Less Than Projected

One of the reasons that the Congressional Budget Office originally predicted that Medicare would run out of money within a decade is because they anticipated that by 2019 Medicare would be spending $14,913 per year for each beneficiary of the program.

However, Medicare costs are not rising as fast as anticipated.  Recently,  the CBO has revised its numbers and now they only expect Medicare to spend $12,478 per year for each beneficiary by 2019.

That is almost $2,500 less per person than they originally projected and is great news for the solvency of the program.

How Medicare is Saving Money

Medicine and medical care has been changing over the past few years.  Hospital stays are getting shorter and, as a result of the Affordable Care Act, there are new incentives for hospitals to take better care of people the first time ... thus reducing the number of re-admissions.

In addition, we Baby Boomers have been taking pretty good care of ourselves.  The influx of younger, healthier Baby Boomers into the program is helping to keep costs down.

More Health Insurers Are Participating in Obamacare

While a few insurers have dropped out of the program, in 2015 they were replaced by 77 new insurers who were offered additional plans in 44 states.  While not all of these insurers will be offering Medicare Advantage or Medicare Supplemental plans, evidence indicates that the more insurers there are in the marketplace, the lower the premiums.  This is good news, both for people on Medicare as well as their younger family members.

More Insurers are Covering End of Life Conversations

The most expensive healthcare often occurs during the last few months of a patient's life.  Often they receive treatments that they do not want, can be painful, and will only minimally extend the length of their life, while decreasing their quality of life.

I saw this personally a few years ago when a 97 year old neighbor was put through open heart surgery.  She never returned home and was in pain during the remaining few months of her life, which she spent in a nursing home.

Now some insurance companies are paying doctors who want to have a conference with their patients about their end-of-life decisions, so that people can decide for themselves what they want to do ... before they are in a crisis situation.  The American Medical Association has also put in a request to Medicare, asking that they also consider paying doctors to discuss these issues with their patients.

There are several benefits to these discussions.  While encouraging end-of-life conferences could save money on unwanted medical treatments, the more important issue is that it will also enable people to have more of a say concerning the treatments they receive during the last few months of their lives ... and whether they want to spend that time at home or in a hospital or skilled nursing facility.

The Government is Cracking Down on Medicare Fraud

Another important issue for the future of Medicare is the effort to reduce Medicare fraud.  It costs the program billions of dollars and seems to be getting worse, rather than better.  In order to keep the program solvent, federal agents and prosecutors are putting more energy into prosecuting these cases.  The Justice Department is using Medicare billing data as one way of tracking cases of fraud.

Retirees who are concerned about keeping Medicare solvent should report any cases of of suspected Medicare fraud in their community.

If we want Medicare to be available as we get older, we all need to report any suspicious charges listed on our bills ... for example, for treatments we did not receive.   Medicare beneficiaries should also file a report any time they hear of someone who is getting kickbacks from doctors for agreeing to get treatments they do not need, or for agreeing to say they received treatments, when they did not.

If you are interested in learning more about retirement facts that could be helpful to you, use the tabs at the top of this page.  They contain links to hundreds of other informative articles.

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Popular Places to Retire

Towns With the Highest Percentage of Retirees

 Are you looking for a busy, active retirement in neighborhoods that offer a wide variety of activities and where many other people have already retired?  If so, you may enjoy living in one of the ten communities on this list that was compiled by U.S. News and World Report in late 2014.  These are towns that contain a high percentage of retirees.

Some of these communities are exclusively for people over age 55 ... such as Laguna Woods Village, California and Sun City, Arizona.  Other towns on this list have residents of all ages, but a much higher percentage of retirees than the other typical American communities.

While I am sharing this U.S. News list with my readers, I have to say that I do not agree that all of the towns on this list would appeal to the typical retiree.  Some of them are located in places with harsh climates where younger adults may have simply moved away ... leaving only the older residents behind.  On the other hand, some of these are places that are quite charming and you might love living there!

You'll want to do a lot more research before blindly choosing one of these communities, especially if you are basing your decision simply on the fact that a lot of the residents are over the age of 65!

Ten Popular Communities with the Most Retirees

Laguna Woods Village in Laguna Woods, California - This is the community where I have lived for the past ten years.  There are activities here for everyone ... from people who want to go line dancing or do synchronized swimming to those who want to take classes and learn to write their autobiographies.  One of the seven clubhouses is shown in the photo at the top of this article.  You can learn more about this community in the blog post I wrote about Laguna Woods Village.

Kings Point, Florida - Located on the Atlantic side of Florida, this community is surrounded by golf courses.  Almost 70% of the population is over the age of 65.  Florida is a very affordable place for retirees to live and it has been popular with senior citizens for decades.  There is no state income tax and housing prices in Florida also tend to be quite affordable.

Sun City, Arizona near Phoenix, Arizona - One of the earliest Sun City communities, this age-restricted community is affordable and perfect for those seeking an active lifestyle in the desert sun.  It has lots of amenities, including swimming, golf, clubhouses and a variety of activities.  However, if you have not spent a summer in Arizona, I suggest that you rent there before purchasing a home.

Pinehurst Village, North Carolina - With 43 golf courses in the surrounding area, Pinehurst is a golfer's paradise.  You can even drive your golf cart on the community streets in Pinehurst Village!  North Carolina is also becoming more popular with retirees who have decided that Florida is a little too far South for their taste. 

Bella Vista, Arkansas - Our daughters used to go to a summer camp in the Ozark Mountains.  It is a beautiful, pristine part of the country, ideally suited for retirees who like to hunt, fish and go boating in the gorgeous lakes.  There are also plenty of golf courses around, too.  Homes can be purchased for as little as $125,000, which is one more reason this mid-western community is popular with retirees.

South Yarmouth, Massachusetts - Although U.S. News and World Report listed this community because one-third of the residents are over the age of 65, there are things you should know about this Cape Cod community.  Our family used to spend the month of August in Cape Cod and loved it.  However, many people closed up the homes and left the Cape for the winter.  It can get bitterly cold in the winter and many of the restaurants and tourist facilities on Cape Cod are closed during the coldest months.  Second, the population decreases significantly during the winter months, so you might not have many neighbors if you plan to live there year around.  If these factors do not bother you, and you like to go fishing and sailing, then this could be the right choice for you.

Fredericksburg, Texas - This town is home to Texas Tech University, so there are many cultural events that retirees can enjoy.  It is also a charming, historic town in the Hill County, for those who are looking for a quaint small town where they can enjoy their retirement.  Home prices are quite reasonable and Texas does not have a state income tax, two factors that appeal to many retirees.  I have some friends who retired there about 15 years ago, and they have been very happy.

Ocean Pines, Maryland - This mid-Atlantic coastal community is near the more crowded, touristy Ocean City.  There are a variety of housing choices, including those both inside and outside of age restricted communities.  This is a popular beach-style retirement area for retirees with plenty of golf courses and other amenities for people who seek an active lifestyle.

Pahrump, Nevada - This town on the California border is about an hour's drive away from Las Vegas.  It is a sunny desert community that is not too far from Death Valley, California. Retirees need to consider these facts when they think about the long, hot summers in the California/Nevada desert.  While a high percentage of the residents may be over the age of 65, this may be primarily because younger people leave and move to more prosperous areas with more job opportunities.

Camano, Washington - Camano Island is a gorgeous community that is popular with both fishermen and artists.  It's just north of Seattle and is popular with retirees who want to live in a pristine, rural area.


Source:

http://money.usnews.com/money/retirement/slideshows/places-with-the-most-retirees

If you are looking for other places to retire, use the tabs at the tops of this article to find links to hundreds of other articles.  In particular you will be interested in the tab "Retire in the U.S."

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Free Tax Preparation Help

Completing your tax returns can be complicated, especially as we get older and more easily frustrated.  However, there is no need for most of us to handle our returns by ourselves.  The AARP Foundation Tax-Aide is available to help you file uncomplicated personal tax returns, at no cost to you.

How Do I Find a Tax-Aide Volunteer?

These IRS trained and certified volunteers are usually available by appointment at libraries, senior centers, community centers and similar public facilities in neighborhoods all over the United States.  They are available from approximately February 1 to April 15.  Anyone can ask to use the service, but they are particularly interested in helping people over the age of 60 who have low or moderate incomes.

You can use the contact information below to make an appointment and find the nearest location:

aarp.org/freetaxhelp
1-888-227-7669

What Documents Should You Bring To Your Appointment?

Make sure you show up at your appointment with all the information the preparer will need to complete the return quickly and efficiently.  In particular, be sure to bring in this information:

Proof of health insurance coverage;
If you were insured through the Affordable Care Act, bring Form 1095-A;
Your tax returns from the preceding year;
A photo ID, such as your driver's license, for everyone on the return;
All your income statements (W2, 1099, interest, dividends, Social Security, etc.);
Brokerage statements that show your capital gains/losses and stock sales;
Receipts for prescriptions, as well as other medical and dental bills;
Receipts for health insurance premiums;
Property tax and mortgage interest statements;
Proof of charitable donations;
Documentation for any other itemized deductions;
A check or bank card that shows the routing and account numbers for direct deposit of your refund.

Most of the documentation you need, including the Form 1095-A, W2, 1099s, Social Security statement, brokerage statements, etc., will be mailed to you during the month of January. 

Don't let yourself become upset and frustrated by trying to do your taxes by yourself.  Let professionals help you for free.

If you are looking for additional helpful retirement information, use the tabs at the top of this article to find links to hundreds of other articles related to retirement planning.

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Protect Yourself From Medicare Fraud

For those of you who are age 65 or over, you have probably signed up for Medicare and are now enjoying the benefits of this healthcare program.  Now that you are on Medicare, you want to make sure that someone else doesn't enjoy your Medicare benefits, too ... and leave you with unpaid bills and co-pays that could damage your credit until you are able to go through the complicated process of proving that you did not incur these expenses.

These are the type of retirement problems that I never thought about before I retired and they are certainly the type of problems you don't want to bring on yourself.  Fortunately, there are some steps you can take to protect yourself from Medicare fraud.

How to Prevent Medicare Fraud

*  First, it is important that you and your retired relatives know that Medicare will NEVER call you and ask you for your Medicare number or any other personal information.  They will not try to sell you products such as insurance or supplemental drug plans.  Consequently, there is no reason to ever give your number out over the phone to a stranger who calls you.

*  In addition, there is no reason to carry your Medicare card around with you, unless you are going to visit a doctor, hospital, clinic or pharmacy.  Once you have given this information to your regular healthcare providers, you will not usually have to keep showing them your card.  Furthermore, if you get a Medicare Advantage plan, they will provide you with a separate card that has your plan's member number ... which will be different than your Medicare number.  Of course, you'll want to protect your Medicare Advantage number or your Medigap policy number, as well, so that information cannot be stolen and misused.

*  Keep track of your doctor visits, tests, surgeries and any other medical procedures.  Write them down in a calendar or journal.  When you receive your Medicare Summary Notice (MSN) and your Part D Explanation of Benefits (EOB), compare them to your personal records.  Make sure there are no mystery charges on them.  If there are, call your physician and see if they have an explanation for the charges.  For example, they may have sent a test to an outside lab or another physician for a second opinion.

*  If there are unexpected charges on your bill and no one knows why, report the charges to the Senior Medicare Patrol for your state. They will investigate the fraudulent charges.

You can get more information about preventing Medicare Fraud at:

http://www.smpresource.org (Website for the Senior Medicare Patrol)
http://stopmedicarefraud.gov

If you are preparing for retirement, use the tabs at the top of this article for links to hundreds of additional articles on a variety of helpful topics.

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How to Have a Happy Marriage After Retirement

Causes of Gray Divorce

Divorce after the age of 50, also know as gray divorce, is becoming more common ... sometimes because of the stress placed on a relationship by retirement.  A marriage that was difficult when one or both spouses were working can become unbearable when two people find themselves together most of the day.

Even if they don't divorce, many people who thought their spouse was simply a little annoying before they retired now find themselves living in misery afterwards.  As a woman in her 60's, I have several married women friends who dread having their husbands retire.  They feel they will never have time to themselves again and that everything they do will be constantly critiqued and criticized ... especially if their husband starts telling them how to run the house. I have known men who suddenly began to "instruct" their wife on the right way to load the dishwasher, vacuum the carpet, or do the laundry.  Whether this is true in your relationship or not, just the fear of it often puts the wives on edge, making them irritable and unhappy about the prospect of retirement.

Another problem that can come up is that some couples may have different expectations about retirement.  For example, the wife may expect that her husband will help more with the household chores.  He may expect that she will now start playing golf or tennis with him more often.  When these things don't materialize, it can cause disappointment, resentment and bitterness.

Another common issue is social dependency.  The husband may want the wife to focus all her attention on him, especially if he has few friends now that he is no longer working.  The wife, however, may have already developed a large social group that she enjoys seeing on a regular basis.  This can also cause jealousy and resentment.

I felt this was an important topic to address in a retirement blog, so I decided to do a little research into ideas that might alleviate some of the fear and resolve many of the issues regarding marital compatibility after retirement.  An important aspect of retirement planning is to feel confident that your relationships will be pleasant, too.  While you may not want to try everything I discovered and list below, it could be worth it to at least give a few of these suggestions a try.

How to Get Along with Your Spouse After Retirement

*  Both the husband and wife should find ways to be of service.  Helping others is rewarding and especially benefits those people who feel they do not have much value after they leave their jobs.  Having self-worth is important for nearly everyone, whether they are retired or not.  In addition, being busy and having activities that give structure to your free time can make your life more enjoyable.

*  Some people who are ready to retire from their lifelong career may wish to continue to work in some other capacity.  This could mean that you keep your current job, but only do it part-time; or it may mean choosing an entirely different career.  It might even be possible to find an encore career in which you are both of service to others and earn an extra income at the same time.  The website encore.org can help you find a second career with service organizations in your area.  In addition to helping you feel of service and giving you the opportunity to interact with other people in meaningful ways, working can also relieve any financial stress that might have been brought on by retirement. 

*  Even if it requires marriage counseling, every couple needs to learn how to accommodate each other and avoid hurting each others feelings.  If you have been hurting each other for years, it could take time to re-learn the ways you used to enjoy spending time with each other.  After all, there has to be a reason why the two of you got married in the first place.  Once you manage to get back those feelings, you will be glad that you now have a kinder, gentler, more loving relationship.  If you plan to be happy during the decade or two that you are likely to live together after retirement, both people need to find ways to fulfill their social, spiritual and emotional needs within the marriage.

*  At the same time that you are working on building a better relationship with your spouse, both people also need to develop their own individual, personal interests and respect their spouse's independence.  Both of you need to have the free time to do the things that you enjoy.

*  Sit down and talk with each other about your expectations after retirement.  See which expectations you both agree to ... such as he will take responsibility for certain chores and she will join him in certain activities.  Set up a calendar so you both know what will be going on each day.  For example, on Tuesdays she plays bridge and he plays golf.  On Wednesday afternoons, they go together to a movie.  Avoid nagging your spouse to give up an activity they enjoy, simply because you want them to do the things you like.  They deserve to have time to enjoy their retirement, too!

*  Find some individual space for each person within your home.  He may want a home office; she may want a craft or sewing room ... or the opposite could be true.   Each person needs to have a place they can call "their own" within the home ... even if that space occasionally has to do double duty as a guest room for a visiting adult child.

*  Continue to read, talk to each other and learn as much as you can about how to get along after retirement.  You may both need a "refresher course" from time to time, especially after an argument or a period of high stress. In addition, you could find the articles below helpful.

Sources:

http://www.marriagebuilders.com/graphic/mbi5018_qa.html

http://www.huffingtonpost.com/2013/08/09/divorce-after-50-retirement_n_3286342.html

http://www.usatoday.com/story/money/personalfinance/2013/11/05/retirement-couples-happy/2918023/

http://www.encore.org/

For more help with retirement planning, use the tabs at the top of this post for links to hundreds of additional articles.

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Best Places to Retire Overseas from Live and Invest Overseas

Live and Invest Overseas has a Retire Overseas Index which they use to evaluate a variety of factors that go into helping people decide where they should move if they want to retire to another country, rather than stay in the United States.  Currently, over 600,000 Americans receive their Social Security checks in other countries and countless others have their checks deposited into American bank accounts, while they spend at least a portion of their year in a foreign retirement mecca.

U.S. News and World Report, in an article released on September 5, 2014, took the Live and Invest Overseas data and compiled their own list of ten places you should consider, if you want to live all or part of the year in another country when you retire.  They considered data such as affordability and the presence of other American ex-patriots in compiling this list.

Best Places to Retire Overseas

Algarve, Portugal - low cost of living, fabulous climate, and the 17th safest place to live in the world.

Cuenca, Ecuador - affordable, high-quality healthcare, and this is a country that uses the U.S. dollar, which means retirees do not have to worry about exchange rate problems.

George Town, Malaysia - This charming small city is a UNESCO World Heritage site.  Many people speak English, which makes it an easy place to live.

Chiang Mai, Thailand - low cost of living, mild climate and an easy place to find work in the local schools, universities and health care facilities, if you hope to earn extra retirement income.

Dumaguete, Philippines - A couple can live in this University town for as little as $1000 a month and enjoy the gorgeous beaches, as well as many western cultural opportunities like ballet or the theater.  English is the primary language.

Pau, France - Known as the garden city for its lush and abundant greenery, a couple could live in this beautiful university town for about $2,000 a month.

Medellin, Columbia - A beautiful South American city with numerous parks and architectural beauty.  Although we have all heard of the dangerous Medellin drug cartel in the past, according to these reports the city is now considered safe for retirees.  It was named the 2013 World's Most Innovative City.

Abruzzo, Italy - I recently wrote another post about this spectacular and affordable area, titled "Move to the Abruzzo Region of Italy."  It is also included on the Live and Invest Overseas list because of its beautiful beaches, stunning mountains and its affordability.  This is another place where it is estimated that a couple could retire for about $2,000 a month.

Panama City Beaches, Panama - This town offers retirees a beach lifestyle with modern amenities.  Panama is another location that uses the U.S. dollar and has a high-quality healthcare system.

Istanbul, Turkey - We have some Swedish friends who worked for an international company and were often transferred to various parts of the world.  They lived for several years in Texas and then for several years in Istanbul.  They insisted that Istanbul was, by far, their favorite place to live outside of Sweden.  It offers both the experience of living in Europe as well as in Asia.  It is a very affordable place to live at an estimated $1,100 per month.  Our Swedish friends love to play golf and had high praise for the golf courses and the community where they lived in a suburb of Istanbul.


For more detailed information about these locations, go to:

http://finance.yahoo.com/news/10-best-places-retire-overseas-142702453.html

For more information about retirement planning, use the tabs at the top of this article to find links to hundreds of other retirement articles.

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Photo of the Abruzzo region of Italy is courtesy of wikipedia.com/commons

Most Popular Retirement Stories of 2014

This year the most popular retirement topics had to do with the issues of aging, the best places to retire in the United States or overseas, health problems and money tips for both the poor and the wealthy.  Here are links to the top articles for 2014:

The UCI 90+ Study at Laguna Woods Village

Why do some people live to be 90 or 100 years old and others do not?  Which people are most likely to get Alzheimers?  This article is based on decades of research on the residents of Laguna Woods Village, a retirement community near the University of California in Irvine.  Some of their findings are much different than what we have always thought!

Keeping Track of New IRA Rules 

In this article, you will find links to an IRA Broker Comparison Chart, as well as a distribution cheat sheet.  Valuable information about choosing an IRA broker, the amount to contribute and the amount to take in distributions.

Where To Retire Near San Diego

Check out this list of great retirement communities in the San Diego area, and learn the advantages and disadvantages of retiring in this popular region of California.

Public Assistance for Low Income Retirees

Many retirees struggle to make ends meet.  Often they are eligible for a variety of public assistance programs, but they don't know about them.  Whether you need a little extra help yourself or you know of someone who does, this article provides a list of how and where to access the different types of programs that are available.   

Healing Your Plantar Fasciitis

Plantar Fasciitis is a very painful condition that affects the heal of your foot.  While it can take a few months to recover, this article contains a number of tips to help you on the road to recovery.

Problems in Retiring Abroad

More than 600,000 Americans now receive their Social Security checks in foreign countries.  Many people make this decision in order to save money while maintaining a high quality of life.  However, there are a few things that everyone needs to consider before making the decision to move overseas.

Retire in Lovely La Antigua, Guatemala  

If you are looking for a Central American city with a large, English-speaking ex-patriot community and excellent medical care, this may be the right location for your dream retirement home.

Costa Rica Has Become a Top Retirement Destination

Costa Rica has been ranked by HelpAge International as one of the best places for retirees and the elderly to live.  They ranked 90 countries on a variety of issues, including healthcare and Costa Rica came out on top.

Is It Alzheimers or a Treatable Disease?

When the elderly begin to develop dementia, it is often assumed that it is Alzheimer's and there is very little that can be done about it.  However, often dementia is caused by other problems that are quite treatable.  Even certain medications can cause the symptoms of dementia.  Learn how to tell the difference.

Warren Buffet's Retirement Advice

In an interview with Motley Food, Warren Buffet reveals his suggestions for successfully investing your retirement funds.  If you are looking for a stable investment income, you'll want to read this article.

Move to the Abruzzo Region of Italy

Have you always dreamed of retiring in Europe, but thought you could not afford it?  Check out this article about the beautiful, romantic Abruzzo Region of Italy where an American couple can live comfortably in a beautiful setting on less than $2000 a month.

Choosing a Continuing Care Retirement Community



Sometime in your 70's or 80's, many people choose to move into a continuing care retirement community, where someone else will do the cooking, cleaning and provide your transportation.  When you are ready to take this step, you'll want to know how to choose a good one.

You may also be interested in the top retirement stories of past years:

The Fifteen Most Popular Retirement Stories of 2013

The most popular topics were the articles about fabulous places to retire, how to make money after retirement and alternatives to long-term care insurance.  One article was was especially popular was the one that shared some interesting statistics about the Baby Boomer generation

The Eleven Most Popular Retirement Stories of 2012

Subjects covered include where to retire outside the United States, sunny places to retire in the U.S., retirement savings, healing relationships with your adult children, Baby Boomers and STDs, divorce after age 50 and niche retirement communities.

The Eight Most Popular Retirement Stories of 2011

Topics include cheap places to retire, working from home, how to prevent a broken bone, and crafts to do with your grandchildren.

For links to hundreds of additional articles about retirement, use the tabs at the top of this article.

You are reading from the blog, http://www.baby-boomer-retirement.com

Photo credit:  Photo of Laguna Woods Village was taken by author, Deborah-Diane.  All rights reserved.

Realistic Gifts for Children and Grandchildren

Over the years, many of us have grown accustomed to being quite generous with our adult children and grandchildren. In addition, our children and grandchildren may have grown accustomed to receiving large gifts from us.  This can cause problems as we age and our budget can no longer permit us to be so generous.

What can you do to make sure that you do not destroy your own retirement plans by spending too lavishly on members of your family?

Talk to Your Adult Children

Even before you retire, there is nothing wrong with casually saying to your children, "I'm glad I am able to buy you this expensive gift now, while I'm still working, because I won't be able to afford to do these things once I retire."  This prepares your children so that, when the time comes, they are not shocked when they expect one thing and receive something else.

Set Up a Realistic Budget

It goes without saying that some retirees are able to afford to give more to their adult children than others.  Whether you can afford to spend $5, $50, or $500 a person, make sure you have set up a realistic budget that will not disrupt your income.  You do not want to be spending down your savings or investment principle in order to purchase gifts for your children.

The Best Gift You Can Give Your Children is to be Self-Supporting

Do you really want your children to have to support you in the coming years ... possibly at the same time they are trying to put their own children through college?  Do you want to have to move in with your children for financial reasons?

In addition, most young and middle aged adults would experience a great deal of financial difficulty themselves if they were called upon to help support their parents.  Consequently, you are doing your children a favor when you do not overspend on them for holidays and birthdays.

Sometimes Large Cash Gifts Can Be Part of Your Estate Planning

On the other hand, sometimes giving large gifts of cash, stock or property can be part of your estate planning.  If your estate planner recommends it, making large gifts to your children while you are still alive is one way to reduce inheritance taxes on large estates.  However, only do this after consulting with your estate planner and you have determined that you will continue to have an income stream that will support you for the rest of your life.

Make Sure You Keep Things Fair

When you reach the point when you have to decrease the size of the gifts you give to your children and grandchildren, be careful to keep things fair.  If you pay for an expensive trip for one grandchild, for example, but have no intention of doing the same thing in the future for others, it will only cause resentments and unhappiness.  Make sure that you are as even-handed as possible.  This is especially important in a blended family in which the husband and wife may have children from other marriages.

Decide Whether You Want to Give Gifts, Cash or Something Else

Some people I know give several hundred dollars at Christmas to each of their adult children, and they let them divide up the money between themselves and their children as they see fit.  Other people give individual gifts to their children and grandchildren, but no cash.  Another choice is to give gifts to one generation and cash to another ... for example, gifts to your children and cash to the grandchildren (or the opposite).   I have also known people who just buy gift certificates or write checks to everyone in the family.

One year, my husband and I decided to buy Disney stock for each of our grandchildren.  We thought it would be good for them to have an interest in the stock market and it would help a little with their future college costs.

However you decide to handle gift giving is up to you and should be based on your own financial situation, as well as what is easiest and most enjoyable for you.  After all, since you are making the gift, you have the right to decide how you want to handle things.  Just make sure you remember to take care of yourself, too.

Happy Holidays from my family to yours!

If you are interested in other articles about financial planning in retirement, use the tabs at the top of the page.  They contain links to hundreds of other articles on topics that could be of interest to you.

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Budgeting for Your Golden Years

At the end of each year, many people take time to evaluate their retirement plans, work on their budgets and evaluate how they are doing financially.  In fact, this is something everyone should do once a year, whether they are young adults, middle aged or already retired. 

One of the keys to a happy, successful retirement is to have a realistic budget.  This involves knowing which expenses will be reduced or eliminated entirely, which expenses are expected to remain about the same, and which expenses are likely to increase.  It is important to be honest when you evaluate how much money you can reasonably expect to need in order to have a satisfying retirement.  Here is some basic information to get you started:

Retirement Expenses that Could be Reduced or Eliminated

Mortgage -- Will you pay off your mortgage or move someplace less expensive where your payments will be lower?  If you go into retirement with your current mortgage, of course, you can expect this expense to remain unchanged.

Rent -- If you do not own your own home, will you remain in your current lease or move to less expensive housing?  Renting does make it easier for people to be flexible in making adjustments to their cost-of-living.

Debt -- Even if you still have a mortgage, many people try to pay off all or most of their other debts before they retire.  If this is true for you, it could make a substantial reduction in your monthly budget, depending on how much debt you have been carrying.

Commuting and Transportation -- Most people drive fewer miles after they retire, which also means that they spend less on related expenses, such as car repairs and parking.  However, if you plan to do a lot of traveling by car, this may not be true for you.

Lunches, work clothing, dry cleaning and other job related expenses -- Once you stop working, you are much less likely to be eating lunch out every day, buying suits or taking them to be cleaned.  The amount of savings can add up.

Retirement savings -- After you begin living off your retirement savings, you will stop adding money to your IRA or 401(k).  This is one expense that will drop off completely.

Medical Expenses - Maybe -- If you are old enough to go on Medicare when you retire, and if you decide to use a high-quality Medicare Advantage plan, you may save money, especially if you paid your own health insurance premiums in the past.  However, if you have received free or inexpensive healthcare through your employer, then this could be an expense that will be higher when you retire.

Retirement Expenses That Will Remain About the Same

Groceries -- While we like to think we will save money in every area of our life, the truth is that certain expenses, such as our grocery bill, are going to stay the same or may even increase slightly as we eat more meals at home.

Utilities -- This is another bill that will probably remain about the same or might increase slightly, especially if you have been accustomed to turning the thermostat down when you're at work.  Once you are home all day, running the furnace or air conditioner, watching television or using the computer, your utility bills will be at least as much as you spent in the past and could go up slightly.

Insurance -- The amount that you spend on homeowner's or renter's insurance, life insurance, and auto insurance are all going to remain about the same as what you have paid in the past.

Property Taxes -- If you own a home, even if you have paid it off, you still need to include your property taxes in your retirement budget.  They will initially continue to be about what you have paid in the past.  Over the years, you can expect taxes, and everything else, to go up.


Retirement Expenses that Could Increase ... Possibly a Lot!

Health Insurance -- Whether or not your health insurance costs go up or down depends a lot on what you have been paying in the past and the type of Medicare supplement you decide to purchase after you retire.  For example, if your employer paid for your insurance prior to retirement, then anything you pay for Medicare and the supplemental policies you choose will be an increase.  If you had an expensive individual health insurance policy in the past and you had to pay the premiums yourself, then Medicare, even with a Medigap supplemental policy, will seem like a bargain.  You need to do your research and have a realistic budget for your health insurance.  For most people, the least expensive way to handle Medicare is by using a Medicare Advantage plan.

Other health expenses -- Depending on the insurance you choose, you will still have co-pays and deductibles with most Medicare plans.  Drug costs are sometimes high for senior citizens, as well.  Basic Medicare does not cover dental or vision expenses, which can be significant as you age, so you may need to purchase extra insurance to help with these costs.  Even if you do have insurance, certain dental expenses, such as implants, can still be quite high.  It is wise to estimate what your deductibles and other costs could be and set aside some money to cover these possible future expenses.

Long-term care -- If you decide to purchase long-term care insurance after you are already in your 60's or 70's, the insurance premiums could be quite high.  If you have not yet reached your 60's, you are better off getting the insurance while you are younger and before you have developed any serious health problems. It is smart for most people to get the insurance, because the cost of long-term care can be significant when paid out of pocket.  According to the the U.S. Department of Health and Human Services, you have a 70% chance of needing some type of long-term care after the age of 65.  A nursing home can cost as much as $90,000 a year and assisted living facilities run approximately $42,000 a year.  One way or another, it is wise to either buy the insurance or set aside some money for this possible expense.

Entertainment --  Particularly during the first decade after you retire, you may want to kick up your heels a little and spend more time traveling, eating out, going to plays, or indulging in your favorite hobbies ... whether that means enjoying more time on the golf course, purchasing a sailboat or spending money on your favorite collection.  It's important to budget for these activities before you retire.  It won't be any fun to retire if you are unable to afford to do any of the things you looking forward to.

Emergencies -- An unexpected event can have an even greater effect on you when you are not working, since it could be difficult to make up for the lost money.  For example, a sudden drop in the value of your investments, a period of high inflation, losing your home and possessions in a flood, earthquake or other catastrophe, significant medical expenses, or major car repairs can be difficult losses to overcome, particularly if you are living on a tight budget.  When you first retire, it is wise to set aside as much money as possible in an emergency fund so you are prepared for the worst.

The bottom line is that you need to prepare for everything.  As they say, hope for the best and prepare for the worst.  That's the secret to a comfortable retirement.

Source:

Yahoo! Finance, Dave Bernard, "5 Costs to Include in Your Retirement Budget," U.S. News & World Report, September 5, 2014.

For additional information about retirement planning, use the tabs at the top of this page to find links to hundreds of articles about great places to retire in the U.S. or abroad, financial planning, medical issues, family concerns and more.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  Photo of Laguna Beach taken by author, Deborah-Diane; all rights reserved.

What Happens to Disability Benefits When You Retire?

Millions of Americans are disabled and one of the things they worry about is what will happen to their income when they reach retirement age.  The answer to that question depends on the source of their disability income.

Private Disability Insurance

If you have been covered by private disability insurance, most companies cease making payments to you when you either reach age 65 or your full retirement age ... which can be age 66 or 67.  These companies typically pay you an income in addition to what you have been receiving in Social Security Disability ... or instead of it, if you were not eligible for Social Security.  In those cases, your income could drop dramatically when you reach retirement age.  However, the majority of Americans do not have private disability insurance.  Instead, they rely solely on Social Security disability coverage.  In those cases, their income will remain the same or, in some cases, might even increase slightly after they retire.

Social Security Disability Insurance

The good news is that your Social Security disability payments remain the same when you reach retirement age ... even if your income during your working years was not enough to qualify you for that level of monthly income.  This protects people who became disabled years before they reached retirement age, so they had a shortened work history.

What if You are Entitled to Social Security Spousal Benefits

Disabled people who are married, or who were married to someone for at least 10 years, also have the option of receiving monthly payments based on their spouse's work history, rather than continuing to receive their disability payments, if the spousal benefit would be larger.  In this case, it would be wise for them to begin receiving the spousal benefits at their full retirement age, when those benefits would be maximized.

Which Benefit Would Be Best for You?

Let's say that you have been receiving $1100 a month in Social Security Disability payments and you have a spouse or former spouse who is receiving $2500 in Social Security retirement benefits.  If you are age 62, you would be entitled to no more than $900 a month in spousal benefits, which is less than your disability payments, so there is no reason why you would switch to the spousal benefits.  However, if you wait until your full retirement age, between ages 65 and 67 depending on when you were born, you would be able to receive 1/2 of the your spouse's benefit, or about $1250 ... which is more than your disability payment.  At this point, it would be worthwhile for you to switch from disability to spousal benefits.

As you can see, if you are on Social Security Disability and in your 60's, it is worthwhile to take the time to compare your disability payments to your spousal benefits ... and re-evaluate every year until you reach full retirement age.  You will need information from both Social Security statements in order to make this comparison.  You can find your personal information at: my Social Security website.  You can use the information they provide and their estimator to make an informed decision.

Sources for additional information:

http://www.ssa.gov/myaccount/

http://www.ssa.gov/disability/

If you are interested in learning more about retirement planning, use the tabs at the top of this page to find links to hundreds of additional articles.

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Fun Ways to Earn Extra Retirement Income

Let's face it.  Most Baby Boomers are going to have to do something to earn extra income during their retirement years.  The vast majority of Boomers simply have not saved enough money to live comfortably during their later years.

We see the reality of this around us.  Several times recently I have been in Starbucks or fast-food restaurants and observed that many of the employees are not the young, college-age kids one would expect to see.  Instead, these part-time jobs are often filled by people who are obviously in their 60's or older.  The same is often true of department store clerks and people in other service industries. I can't help but wonder if they are really enjoying what they are doing.

Instead of working in stressful, demanding jobs after retirement, wouldn't it be nice to find something fun to do that could also provide us with an extra income?  Look around, there might be more opportunities than you realize.

Examples of Fun Jobs for Retirees:

Create something and sell it:  I have a friend named Patti who is a retired Realtor and a wonderful painter.  She spends hours painting a wide variety of ocean and mountain scenes and selling her work at Southern California art festivals where she has gotten to know other artists who are doing the same thing.  It is such fun for her!  When I have visited her booth at the festivals, I have frequently observed that she is surrounded by other men and women our age who are making and selling jewelry or lovely boxes and items they have created out of wood or other materials.  A few years ago I bought some earrings from a 60ish man at a fair in Kona, Hawaii.  He told me that his wife made the jewelry, while he went to the fairs and sold it.  You can even start your own website and sell the things you make online!

Start a New Career and Be Your Own Boss:  Another friend of mine retired after decades of working all day as a hair dresser.  She decided to become a Realtor.  She wanted to try something different and has been successful and happy in her new career.  She only sells retirement condominiums in the community where she lives and she has become an expert in that area.  She never has to drive very far, but she always seems to have several active listings and a few buyers.   She is now in her mid-70's, works her own hours and has complete control over her new career.  It has certainly rejuvenated her.  As you can see, a job that has become drudgery for one person can be a fresh new career for someone else.

Write About Your Hobbies:  Do you like to crochet, knit, quilt, make jewelry or other crafts?  Why not start a blog or website and share your knowledge and experience with others?  While you might not make a lot of money writing about hobbies, you could earn a small amount each year to spend on incidentals, travel or Christmas shopping.  Check out this website: Domestic Diva Online.  The author has turned her love of creating craft projects into a successful website where people can follow her detailed instructions and create adorable crafts of their own.

Write About Your Experiences:  Perhaps you don't feel that you have any hobbies to share.  What about some of your life experiences?  Many people have created blogs about their personal life experiences ... traveling to exotic locations, going on cruises or even more day-to-day experiences, such as interesting places to visit in your local community.  You may have fun experiences that you would enjoy sharing, too.  Whichever type of blog you decide to write, you need to learn how to monetize it by adding appropriate ads from companies like Amazon, Google, Chitika, or Vigilink.  You can also list your blog on Amazon Publishing for Blogs, since some readers will subscribe to your blog on their Kindle.  You'll earn a little here, a little there and, pretty soon, it will add up.

Find a Fun Job:  Perhaps you feel that your financial situation requires you to have a regular paycheck and not rely on the advertising fees from a blog or website.  There are a variety of fun jobs available that you might find very interesting and stimulating.  One of our friends retired as a stockbroker and went to work in a health food store.  He had always been interested in vitamins and nutrition.  Another man I know works in an antique store.  He has a houseful of antiques and, although he worked for a large corporation most of his life, he always loved collecting antiques.  Now he gets to work at a store he really loves and share his knowledge.

Teach: If you have knowledge and expertise in an area, and enjoy sharing that knowledge with others, you can earn money by teaching.  Many of the Emeritus teachers at our local community college are in their 60's and 70's ... and this includes the fitness teachers who lead classes in yoga, Tai Chi, chair aerobics, circuit training and much more.  If you know how to play the piano, guitar or any other musical instrument, teaching is a fun way to earn extra money.  

Tutor Children:  Are you an expert in algebra, geometry or calculus?  There is a huge need for people who are patient and can take the time to really explain this subject matter to teens.  If this describes you, check with your local high school to find out how you can get connected with teens who need your help.

Work with other Senior Citizens:  If you aren't interested in working with kids, go to your local senior center and ask about job opportunities for senior citizens.  You might be able to work as a receptionist at the senior center or for a local business.  There are hundreds of senior citizens, many much older than Baby Boomers, who are working in the area around our community ... in the hospital gift shop, as security people at the community gates, for our homeowner's association, and in many other capacities.  Some of these jobs are part-time and others are full time.

Postpone Retirement and Spend a Few Years in Public Service:  One of the women I walk with every weekend spent two and a half years in the Ukraine after she joined the Peace Corps at age 62.  She had retired from the corporate job that she had held for nearly 40 years, but she wanted to postpone collecting her Social Security or using any of the money in her 401(k).  She did this by working for the Peace Corps.  It was a fabulous experience for her and she still goes on speaking engagements where she is asked to talk about her time in the Ukraine.   If you are interested in doing something like that, check out Encore.org.  This website will help you find government and private public service jobs that are designed for Baby Boomers looking for encore or second careers.  Many of these jobs will be right in your own neighborhood, in case you are not interested in traveling halfway around the world.  What a fun, interesting and satisfying way to postpone your retirement and increase your retirement benefits! 

Even if your Social Security benefits are not very large and you have been unable to save a lot of money for retirement, that does not mean you have to face a poverty stricken retirement.  There are a variety of ways you can make extra money and many of them will be a lot of fun!

If you are currently planning your retirement, you will want to check out the tabs at the top of this article to find links to hundreds of other helpful articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Celebrating Thanksgiving Can Extend Your Life

As we approach the "Bermuda Triangle" of Thanksgiving, Christmas and New Year's Eve, many people approach this time of year full of fear, concern about unpleasantness, stress over financial demands, and worry about excess drinking.

However, if you approach the season with the right attitude and actions, you don't have to succumb to all this stress and worry.  Instead, you can turn this opportunity into a way to actually add years to your life.

How to Benefit from the Holidays

*  Research shows that people who have a large number of social connections tend to live longer.  Of course, if you have relatives who increase your stress, your best move is to minimize the time you spend with them and maximize the time you spend with the people you really enjoy.  While none of us can completely eliminate the time we spend with irritating people, we all have the right to pleasantly and politely avoid them as much as possible.  It is important that you do it politely, however.  Nothing can increase your stress like a family feud.  In other words, drop by the home of that busy-body aunt or alcoholic uncle for an hour or so.  Drop off a small gift or home-baked treat.  Smile a lot, make your excuses, and move on!  Don't try to change the the people who are a problem to you; instead, spend your energy increasing your social connections with the people who you care about.

*  Give what you can, but don't go into debt to do it.  Giving is as enjoyable as receiving for most people, and we would all like to give gifts to our family and friends when we can. Giving to others also seems to bolster our life expectancy.  However, there is no reason to go into debt in order to enjoy the pleasure of giving.  First, look around your home.  Do you own things that you don't want, but you think someone else would ... a pretty vase or souvenir from a trip?  Perhaps you have received a gift that just isn't right for you.  Re-gifting is perfectly appropriate, as long as you don't give it to the person who gave it to you!  Still need more gifts?  Head to the Dollar Store.  That is where you can pick up holiday coffee mugs, Christmas tree ornaments, small children's toys, bubble bath, hand cream, picture frames, vases and candy.  You can even buy cheap holiday cards and gift bags there.  For $20, you can purchase 15 or more gifts that will allow you to give something to everyone on your list.  It really is the thought that counts.  Baking cookies or making candy is also a wonderful way to give gifts that will delight your family and friends.  Want to do more?  The Tuesday after Black Friday and Cyber Monday is known as Giving Tuesday.  Make a donation to your favorite charity, even if it is just a couple of dollars.

*  Volunteer to help others.  Volunteers tend to live longer than those who don't.  Whether you have an on-going commitment at your house of worship or a local children's hospital, or you just show up when you can to help at a food bank or soup kitchen, volunteering will make you feel good about yourself.

*  Finally, let the holidays lift your spirits.  Rather that getting down on yourself about the things you cannot do, allow yourself to feel grateful and appreciative for the good things you do have in your life.  Let the holidays lift your spirits.  Sing your favorite holiday songs.  Drive around and look at the holiday lights.  Invite friends over for a sweet treat or a glass of wine.  People who are optimistic and happy tend to live longer, too.

May this be your best holiday season ever!

Use the tabs at the top of this blog to find other ways to maintain your health and increase your longevity.  The tab on Medical Concerns contains links to dozens of other helpful health articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com

Long-Term Care Insurance -- Should You Buy It?

It may be hard to imagine today, but the time may come when you will have difficulty bathing yourself, getting dressed, preparing meals, eating, moving from the bed to a wheelchair or walker, using the bathroom, remembering to take your medication, or with incontinence.  This situation may come on slowly as we age, or it could happen suddenly as the result of a stroke or accident.  No matter the cause, it is important that you have a plan for dealing with these issues when the time comes.

Cost of Getting Long-Term Care

If you have not properly prepared, obtaining the care you need can be extremely expensive.  Although the exact amount varies across the nation, the Orange County Council on Aging estimates that it can range from $50,000 to $80,000. 

The least expensive type of care is when a family member provides the care you need.  However, this is not always a possibility.  Personally, I know of several widowed, childless men and women.  They have no near relatives who can care for them if they should become incapacitated.

Another option is to apply for MediCal.  This is a government program that covers long-term care expenses for many people.  A company called Nursing Home Solutions provides professional financial planners who can help you see if you qualify for MediCal.  In their ads they say that you do not have to spend down all your assets in order to qualify for MediCal assistance in paying for a nursing home. I am sure there are also other companies that can help you apply for this program.  You can contact Nursing Home Solutions at http://www.nhscare.com/.

The next least expensive type of care is the use of a part-time caregiver in your own home.  The cost becomes more expensive if you need full time care in a nursing home or assisted living facility.

The most expensive care is for those people who choose to have 24-hour caregivers in their own home, since this requires three shifts of caregivers, seven days a week.

What Does Long-Term Care Insurance Cover?

Fortunately, there is a type of insurance that will pay for your care when you are no longer able to take care of yourself.   In California, where I live, these insurance policies must include coverage for in-home caregivers, as well as the cost of residing in an assisted living facility or a nursing home.  This gives you the option to receive your care in the setting that is most appropriate for you and your family.  For example, if your spouse needs long-term care, having this insurance may make it possible for them to stay in your home with you, without forcing you to put them in a nursing home.

Purchasing Long-Term Care Insurance

This type of insurance gives you a variety of options, so different people can choose the amount of insurance they can afford.  You can select a policy that covers your care for a few years, or you can choose one that would cover you for as long as necessary, even if that is the rest of your life.   The shorter the term of care, the lower the premiums will be.

Why Would You Buy a Short Term Policy?

You may be wondering why everyone wouldn't just buy a policy that would cover them indefinitely, rather than have a time limit on it.  Of course, that would be ideal, but it could be too expensive for many people.  When my husband and I purchased our policies, we bought a long-term policy for me, and one that would last a maximum of 4 years for my husband.

Our insurance agent said that you have to look at things practically.  I am more likely to outlive my husband.  If he were to become debilitated, I would probably care for him by myself as long as possible before bringing in a caregiver.  Once we reached that point, four years of long-term care would probably be adequate.

On the other other hand, when I am elderly and losing my ability to care for myself, I probably would not have a spouse to take care of me.  I would need to hire a caregiver sooner and would most likely need the care for the rest of my life.

Based on our conversations with our insurance broker, we purchased the policies that seemed to be affordable and would meet our projected needs the best.  The right policy for you will vary depending on your personal circumstances, such as whether you are single or married, whether or not you have adult children who are capable of providing the care you might need, the health and life expectancy of you and your spouse, and how much insurance you can afford.  Even a short-term policy is better than no long-term care insurance at all.

Whatever you decide, you want to make sure you select a policy that you can afford now, as well as in the future.

What If You Do Not Qualify for Long-Term Care Insurance?

The younger you are when you buy the policy, the better off you will be.  It will be less expensive in your 50's or early 60's and you are more likely to qualify for it.  However, if you do wait until you have a chronic condition and you have trouble qualifying, there are alternatives.  If you or your spouse is a Veteran, you may qualify for $2000 a month in long-term care aid from the Veteran's Administration.  There are also special life insurance policies that include long-term care riders.  You can talk to your insurance agent about those choices.  You may also be able to qualify for MediCal.

Whatever you decide, you need to give this issue some thought and let your loved ones know about any policies you own or money that has been set aside for your long-term care.  You do not want to wait until you are injured and cannot speak for yourself.

If you are retired or planning to retire soon, you will find links to more information about long-term care in the Medical Concerns tab at the top of this page.  You may also be interested in the article links you will find under the other tabs, which cover issues such as financial planning, where to retire, and family isues.

Source:

http://www.nhscare.com/

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