Tuesday, November 28, 2017

Annual Medicare Open Enrollment Period

We are fortunate to have another guest post from Medicare expert, Danielle Kunkle, who has provided us with a clear and detailed explanation of the annual Medicare Open Enrollment Period.  This is timely information, because we are currently in the middle of open enrollment.   It is important for seniors to understand they are not limited to the open enrollment period if they are signing up for Medicare for the first time.  You are also not affected if you have a Medicare Supplement (Medigap) plan.  However, if you are unhappy with your current Medicare Advantage or drug plan, the information below will be useful.

Medicare Open Enrollment

The Medicare Open Enrollment period each fall is a time when Medicare beneficiaries can make changes to their Medicare Advantage plans and Part D drug plans.  This annual enrollment period runs from October 15 to December 7.

Beneficiaries will receive an Annual Notice of Change letter from their current insurance company in September.  This letter will outline all the changes to the plan for the following year.   It is common for the plan's monthly premiums or co-pays to change.  Pay close attention, as well, to see if any of your medications are being added or dropped from the plan's formulary.

If you are unhappy with the changes which are being made to your current plan, the fall open enrollment period is the time to look for new coverage.  We recommend you visit Medicare.gov to use their Plan Finder Tool.  You will enter your zip code, your medications and your preferred pharmacies.  Then, this handy tool will crunch the numbers and tell you exactly which plans for next year will offer you the lowest possible out-of-pocket spending.

It's important to note that the Open Enrollment Period in the fall only applies to drug plans and Medicare Advantage plans.  It does not affect your Medicare Supplement (Medigap plan).  Unlike drug plans and Advantage plans, your Medigap plan does not change its benefits from year to year.

You can actually change your Medigap plan at any time of year, though in most states it will require you to answer health questions and go through medical underwriting to do so.

The graphic along the sidebar will help you understand the Medicare Open Enrollment period.

About the author:

Danielle Kunkle is the co-founder of Boomer Benefits, an insurance agency specializing in Medicare-related insurance products.  They help baby boomers new to Medicare learn about their benefits and coverage options across 47 states.

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

Watch for my book, Retirement Awareness: 10 Steps to a Comfortable Retirement, which is being published by Griffin Publishing in 2018.

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

Photo credit:  Google Images

Infographic credit:  Danielle Kunkle

Wednesday, November 22, 2017

Health Benefits of Helping Others

As the holidays approach, many of us have a strong desire to reach out and help others.  Often, we are overcome by feelings of gratitude for the good things in our own lives and we want to make life a little easier for others.  However, did you know there are actual health benefits you receive when you help someone else?  It really does appear to be more blessed to give than receive.

Health Benefits You Receive by Helping Others

You May Live Longer - No one is quite sure why this is true, but several studies indicate that helping others increases your longevity.  In one study, reported in the Huffington Post article "19 Healthy Reasons to Help Others," 423 married couples over age 65 in Detroit were asked if they helped anyone other than each other in the previous year with tasks such as transportation, errands, shopping, housework, or childcare. The people who helped others were approximately half as likely to die over the next five years than those who didn't.

Helping Others Reduces Your Stress - When you reach out to help others, your body releases oxytocin, which lowers stress and increases your sense of trust and tranquility.  Oxytocin is also known as the compassion hormone.  It helps in cell repair, in the storage of nutrients, and in growth.  No wonder helping others helps us live longer!

Caring About Others Improves Your Immune Function - In an 1988 experiment, Harvard researchers discovered that immunoglobulin A levels increased when subjects were shown a video about Mother Teresa.  They didn't even have to actually help someone else; they just had to watch someone else helping people.  

You Will Feel Great About What You are Doing - One of the best reasons for helping others is that you simply feel good.  There are chemical reasons why we feel better, including the fact that our body releases dopamine, which soothes us, and sometimes serotonin, which is a brain chemical often used to treat depression.

Volunteering Can Help Ward off Loneliness and Depression - In fact, just helping someone else could be therapeutic for someone with mild to moderate depression.  One group which has seen this first hand is Alcoholics Anonymous.  Members who help others stay sober are less likely to be depressed themselves.  The same principal holds true in other organizations where people who suffer from a medical condition, for example, help others who suffer from the same health problem.

Helping Others Can Improve Your Physical Health -  In an article from Harvard titled "Volunteering may be Good for Body and Mind,"  they discovered that helping others can lower your blood pressure and improve your longevity.

You Can Keep it in the Family -  According to the Huffington Post article, parents who teach their children to be caring and compassionate also receive the health benefits of volunteering.  While I have no research to prove it is also true for grandparents, as well, there have been studies which have shown that grandparents who spend a few hours a week taking care of their grandchildren tend to be happier.  In other words, anytime you reach out to help others, no matter who it is, it benefits you, as well.  There is something else you should feel good about.  If you help your grandchildren be more caring and compassionate, you may be improving their lifelong health, too.

Tips for Getting the Most Benefit from Helping Others

Just a Few Hours of Volunteering is all You Need -  According to the Huffington Post article, it doesn't take a lot of time to reap the health benefits.  Just two hours of volunteering a week is enough to reap the maximum benefit.  Of course, you can do more if you want, but two hours is all you need to benefit.

Find Something You Care About - It will not benefit you if you force yourself to commit to a volunteer opportunity which you do not care about.  In other words, make sure you actually want to help this particular person or group of people and you are not doing it because you think it will improve your health.  Help people who mean something to you, either because they are related to you, they share a common health problem with you, or they are someone whose welfare you truly care about.

Do Not Overdo It - If you put so much effort into volunteering that you burn yourself out, you will lose all the health benefits.  Do what you can, but do not let yourself be talked into doing so much that you hurt yourself financially, emotionally or physically.

Realize You Cannot Solve Someone Else's Problems - Although you may begin to truly care about the people you help, you need to realize that you cannot solve all their problems.  Keep some emotional distance.  You cannot fix everything that is broken.  It is enough that you occasionally make life a litter easier for someone else.  You do not have to try to carry all their burdens.


"19 Healthy Reasons to Help Others"

"Volunteering May be Good for Body and Mind"

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

Watch for my book, "Retirement Awareness: 10 Steps to a Comfortable Retirement," which is scheduled to be released by Griffin Publishing in 2018.

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

Photo credit:  Photo of volunteers fighting human trafficking taken by author

Monday, November 13, 2017

Should you Retire with a Mortgage?

While the majority of homeowners manage to pay off their mortgages before retirement, more people than ever before are retiring while they still owe money on a mortgage.  According to a 2013 survey done by the Federal Reserve, in 2001 approximately 74 percent of homeowners had managed to pay off their mortgages prior to retirement.  By 2013, that number had dropped to only 61 percent.  The median mortgage loan still had 17 years left before it would be paid off.  For some senior citizens, a large, lengthy mortgage could put their retirement at risk. Others, however, will be able to handle the expense.  What should people consider before beginning retirement with a mortgage?

Can Your Retirement Budget Handle a Mortgage?

People who retire with a large investment income in addition to Social Security and/or a pension will often be capable of handling a mortgage, especially if they are able to maintain an income which is nearly the same as their pre-retirement income.  They may even find that the mortgage deduction they get on their taxes benefits them enough to make it wise to have a mortgage.

Homeowners with a modest retirement income will need to look at the numbers more carefully.  If they have owned the home a long time and can afford the payments, it may be wise to continue to live in the home until it is paid off, especially if they only have a few years left on their mortgage.  By that time, it would feel as if they were getting a raise in their retirement income, since their expenses would drop.  On the other hand, they need to realize that they may not get a tax benefit, since they may only be using the standard deduction when they file their taxes.  They need to look at their long-term financial situation.

What If You Cannot Afford Your Mortgage?

If you decide your retirement budget will not be able to handle your current mortgage, you have a few options.

You could try to pay off the mortgage prior to retirement, while you are still employed.  You could make extra house payments or refinance your loan into a 15 year mortgage, as long as you do it ten or fifteen years prior to retiring.  However, you do not want to take money out of your retirement savings accounts or add to other debts in order to pay off your home faster.  Those moves would either reduce your future retirement income or increase your other expenses, which would not actually solve the problems caused by having a mortgage you cannot afford.

A popular choice is to sell your current home and use the equity to buy another one which is less expensive.  You might even be able to pay cash for the new home.  If not, you will at least end up with a much less expensive mortgage which will better fit into your retirement plans.  You could look for a smaller home in your current neighborhood or consider moving into an active adult retirement community.  Many retirement communities have homes which are modestly priced and well designed for people who are aging.  This could also save you from spending money to modify your current home so it is accessible for someone using a wheelchair or walker, which could be an issue for you or your spouse in your later years.

Should You Consider a Reverse Mortgage?

Reverse mortgages can be very helpful for retirees who want to remain in their home until they die.  However, it is not a good idea to get a reverse mortgage too early in your retirement, especially if you hope to retain some equity in your home so you can leave to your children, or if you hope to use your equity to cover the cost of a nursing home or memory care facility at the end of your life.  Before getting a reverse mortgage, you need to weigh the pros and cons very carefully.

You do not need to pay back a reverse mortgage as long as you remain in your home.  However, the debt and interest continue to accrue and, eventually, you may no longer have any equity left in your home.  When you die or move into a nursing home, the mortgage company can sell your house and pay themselves back the amount of the loan, plus the interest and selling costs.  You or your heirs will only receive whatever is left.  If you have had the loan a long time, there may be nothing left.  That is why it is best to wait as long as possible before you turn to a reverse mortgage.

Whether or not you decide to retire with a mortgage depends on your personal financial situation.  However, it is important for you to weigh your decision carefully.

If you are interested in learning more about retirement planning, where to retire, common medical problems, 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.

Watch for my book, Retirement Awareness: 10 Steps to a Comfortable Retirement, which will be published by Griffin Publishing in 2018.

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

Photo credit:  morguefile.com

Tuesday, November 7, 2017

Vacation Timeshare Risks and Benefits

There are over 9.2 million timeshare owners in the United States, and many of them are retirees.  Timeshares can be an affordable way to own a portion of a vacation home and many people love the time they spend in them.  They make it possible for owners to budget and pay for their annual vacation over time.  Millions of people look forward to spending a week or more each year in a luxurious condo in a beautiful resort.  Many timeshares give owners the ability to trade their week in one resort for a week in a different one, which means owners can travel to a wide variety of vacation destinations over the years.  Some of them even give owners the option to trade their week for a trip on a cruise ship.

Timeshare Costs

Prices range from about $10,000 to $40,000 and give the owner the right to stay in a resort for one week a year, for as long as you own the timeshare.  Used timeshares can sell for significantly less.  While some owners purchase the timeshares for cash, others make monthly payments for a set number of years, until the purchase price has been paid off.

In addition to the purchase price, the annual maintenance fee averages from about $500 to $1000 a year and owners must also share in paying the annual property taxes.  Owners should expect both of these expenses to rise with inflation.  The maintenance fee may go up faster than the inflation rate, because the property will age and need more attention.  There may also be special assessments whenever a major upgrade needs to be made.  Some timeshares bill the owners for the utilities for one week of usage a year.  For those owners who want to trade their week at one resort for a week at a different one, there may be an additional fee to make the trade.

If you own your timeshare for many years, you may come to see that purchase price as a real bargain.  The longer you own it, the less you will have spent per year on your vacations.  However, if you decide you do not want it after a few years, it can be nearly impossible to recoup your costs.

Risks of Owning a Timeshare

While timeshares may be a great deal of fun and used by your entire family, there are risks to this type of property ownership.   While buying a timeshare may seem like a great idea during the prime years of your career, it can become a burden if you lose your job, suffer a financial setback, or become too ill to use it any longer, which is a common problem for older owners.

Common Problems with Timeshares

Although most owners are very happy with their decision to own a timeshare, there are potential problems you need to consider before you make the purchase.

1.  If you are making payments on the purchase price, plus paying the annual maintenance fee, property taxes and other costs, your timeshare may be more expensive than you expected.  In addition, you have to consider other vacation related expenses you will have when you use it,  such as the cost of traveling to the location and spending money on restaurant meals and local attractions.

2.  Owning a timeshare could limit your choice in vacation destinations.  While many timeshare operators such as Marriott and Hilton have multiple locations, there may be times when you would like to take a vacation somewhere exotic, or stay someplace other than one of the resorts owned by your timeshare operator.  If your annual vacation time is limited, you may have to choose between letting your timeshare week go to waste, gifting it to a friend, or using it when you would rather have stayed somewhere else. 

3.  Timeshares can be very difficult to resell.  Once you own it, it is your property.  In addition, if you or your heirs are not able to resell it, your adult children might inherit it, depending on the terms of your contract, and it can become their responsibility to keep up with the annual maintenance fees and other costs.  If your children look forward to using the timeshare, this may not be a problem for them.  However, if they are not in a position to use it regularly and the mortgage payments and maintenance fees become unaffordable for them, they may consider it an expensive liability which they do not want.

4.  Sellers may try to resell their condo back to the company, but the resort owners may decline to repurchase it.  The owners can also try listing it on a site like Redweek.com, for a fee, but there is no guarantee it will sell.  If anything, by announcing that you want to sell your condo, you could put yourself out there for scammers to find.

5.  Scammers frequently target owners who want to get rid of their timeshare.  In the June/July 2017 AARP Magazine, they published an article called "Time-Share Bandits."  It described how people who advertise their timeshares for sale are often called by scammers who tell the sellers there is a buyer who is interested in their timeshare.  The seller just has to put up a few thousand dollars in advance to cover escrow and title services.  Financially strapped sellers often jump at the chance to get rid of their timeshare, only to be told after a few months that the buyers "backed out."  Often the same sellers have been targeted repeatedly, paying fake escrow fees over and over again.

6.  You may decide to keep your timeshare, and donate the use of it to a charity during those years when you are unable to use it yourself.  Donateforacause.org has a list of charities which would like timeshare donations.  The downside of this choice is that you cannot get a tax deduction for your donation.  According to a U.S. News and World Report article titled, "Should You Invest in a Timeshare," the IRS ruled there is no value for the time used during a donated week.  As a result, you have to keep making your payments, even on the years when you cannot use the timeshare, and you cannot get a charitable deduction, even if you donate it.

For More Information About Timeshares

Despite the risks of timeshare ownership, you may still want to own one.  If you are interested in buying a timeshare, you can learn much more from ARDA, the American Resort Development Association.  With approximately 1,000 members, they represent vacation ownership and resort development companies, in both the U.S. and other countries.  They can help you find legitimate timeshare operators to help you.

American Resort Development Association
1201 15th Street N.W., Suite 400
Washington, D.C. 2005
(202) 371-6700

Get More Information from the Federal Trade Commission:


If you are interested in learning more about financial planning for retirement, travel, where to retire, common medical issues as we age, 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.

Watch for my book, Retirement Awareness:  10 Steps to a Comfortable Retirement, which will be published by Griffin Publishing in 2018.

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

Photo credit:  images.search.yahoo.com/search - Marriott Grande Vista