Need Help Choosing Your Medicare Options?

This blog is for the procrastinators. The last day of Medicare open enrollment for people who want to switch their Medicare Advantage or Part D insurance plans is Dec. 7. The hoopla around this open enrollment period can be confusing, because Medigap supplemental plans are on a different schedule. The optimal time to buy a Medigap plan is during a six-month window after your 65th birthday, which is the only time insurers are required under federal law to sell you a Medigap policy. Switching to a different Medigap plan during the current open enrollment is trickier, because you can be denied coverage, though several states have made it easier to enroll or switch from Medigap or Advantage to a new…

November 23, 2021

The Economy, Minimum Wage, and Disability

The federal minimum wage is $7.25 an hour and hasn’t budged since 2009. But many states and some municipalities have raised their minimum wages. Today, more than half of the state minimums exceed the federal minimum. Now a new trend has emerged: 19 states have enacted or approved automatic yearly increases in their minimum wages to protect their residents from inflation. These adjustments just went into effect this year in Arizona, Colorado, Maine, and Washington D.C. How might higher minimum wages affect applications for disability insurance? On the one hand, the higher pay could prevent some people with mild disabilities from resorting to the fallback option: applying for disability benefits. But if small employers lay people off to cut costs…

November 18, 2021

Lifting SALT Deduction Would Help the Rich

Manhattan residents who itemize their federal tax returns pay an average $102,000 in state and local taxes – more than anywhere else. The second highest tax tabs, nearly $50,000, are in Marin County, the home of musicians and movie stars across the Golden Gate Bridge from San Francisco. Other enclaves with large bills for property, sales, and income taxes include Falls Church, Virginia, a high-income community outside Washington, D.C., and Teton County, Wyoming, where the super-wealthy buy property on the open range surrounding Yellowstone and Grand Teton National Park. In 2017, Congress put a $10,000 cap on the amount of state and local taxes – or SALT – that all homeowners could deduct on their federal income tax filings. T…

November 16, 2021

Parent PLUS Debt Relief: the Good and Bad

Some 3.6 million parents are paying off more than $100 billion in debt used to fund their children’s college education. For many parents, the federal Parent Loan for Undergraduate Students (PLUS) was the only way they could afford college, but many are now struggling to make the monthly payments. In a Harris poll in July, nearly one in three said they regret the decision to borrow. If these parents need relief, they have two basic options: enter into the government’s repayment plan for PLUS loans or refinance their federal student loans through a private lender such as a bank. Both options have significant downsides. Anna Helhoski Anna Helhoski, a student loan expert with the financial website, NerdWallet, explained the good…

November 11, 2021

Social Security Stabilizes Local Economies

Social Security’s great achievement for retirees is a guarantee that they’ll get a check every month, without fail. Less appreciated is the stability the program brings to local economies and businesses. Retirees use their Social Security benefits to patronize establishments that sell goods and services locally such as restaurants, car repair shops, banks, and hospitals. That steady supply of spending in good times and bad helps to stabilize economies, according to research conducted by the Center for Retirement Research and funded by the U.S. Social Security Administration. Between 2000 and 2018, working-age adults’ employment levels and earnings were less affected by the ups and downs in the state unemployment rate in counties where Social Security provides a higher percentage of…

November 9, 2021

How to Pick (or Be) a Retiree’s Financial Ally

If you need help managing your finances in old age, it’s a lot of work to find someone – and not a very pleasant task to think about. But it’s crucial that retirees plan for this. As to when or whether you might need help, it really depends on your individual circumstance. Attorney and researcher Naomi Karp cites a variety of studies that provide some clues to the different ways this process can play out. People who develop dementia obviously need what she calls a financial advocate. This might be a trusted friend, family member, lawyer or professional financial adviser. But roughly a third of aging Americans who are experiencing natural cognitive decline are prone to making poor decisions about…

November 4, 2021

Opioids: Cause or Consequence of Disability?

Opioid painkillers are a double-edged sword for older workers. The medications allow them to keep working through their joint or back pain. But a slide into addiction would interfere with doing their jobs. A new RAND study of workers over age 50 has identified some of the negative consequences of relying on opioids. Rather than promoting work, the researchers found that opioids can cause or exacerbate disabling health conditions, hindering users’ ability to work and making them increasingly dependent on federal disability benefits over time. Bad results from opioid overuse may seem predictable, given that doctors prescribe them to people who are in worse physical condition in the first place. But older workers’ health is already in decline, just by…

November 2, 2021

Boomers Will Struggle with Care in Old Age

The bulk of care for the nation’s elderly is informally provided by spouses, adult children, and other family members. But if family can’t fill the need, will retirees be able to hire an in-home caregiver or pay for a nursing home in the future? Just one in five 65-year-olds has enough family and financial resources combined to provide the support they would require in the event they develop the most severe care needs as they age, according to new research by the Center for Retirement Research. At the other extreme, more than one in three will have insufficient resources to cover even a minimal amount of care. The study builds on previous report showing that most retirees will eventually need…

October 28, 2021

Low-income Spend Tax Credit on Food, Rent

The fate of the recent expansion of the federal child tax credit is uncertain in the ongoing budget negotiations in Congress. What is clear is that poor and low-income families are putting the increased assistance to good use. Nine out of 10 families earning less than $35,000 are spending the money on one or more essential living expenses, which include food, utilities, housing, clothing or education needs like books and after-school programs, according to an analysis of U.S. Census data by the Center on Budget and Policy Priorities. The American Rescue Plan passed in March temporarily increased the credit from $2,000 to $3,600 per year per child for kids under age 6 and to $3,000 for older kids and teenagers…

October 26, 2021

The Problem with Low-Income Tax Credits

The federal tax code offers a nifty tax credit to low-income workers who save for retirement. If only it reached more people. The Saver’s Credit offers what appears on its face to be a strong incentive: the IRS will return up to 50 percent of the amount low-income workers and married couples put into a retirement plan. But Barbara Wollan, an 18-year volunteer in Iowa with the Volunteer Income Tax Assistance program, or VITA, which provides free tax preparation to low-income workers, said her clients often don’t qualify. The reason: the tax credit is not what the IRS calls “fully refundable.” For example, a single person earning $19,750 or less is eligible for a tax credit equal to 50 percent…

October 21, 2021

Attorneys Secure Disability Benefits Faster

Hiring an attorney or other representative seems to be helping workers who apply for federal disability insurance. Legal representation dramatically increases the chances that individuals with disabilities will be awarded benefits at the initial level of review of their applications filed with the U.S. Social Security Administration (SSA), new research finds. Hiring an attorney has been common when applicants appeal an initial denial to an administrative law judge. What’s new is that they are increasingly getting help earlier – when they first file the application – from an attorney or, in some cases, another representative who has passed an SSA test on the agency’s administrative procedures. But disability experts have debated the value of representatives amid concerns about unscrupulous practices,…

October 19, 2021

Caregivers Lament Elderly’s COVID Isolation

The magnitude of the tragedy is unfathomable: Americans have lost nearly 187,000 family members living in nursing homes to COVID-19. Even when residents survive outbreaks in the facilities, their family caregivers experience trauma. Barred from visiting residents during the lockdowns, caregivers observed – on Zoom, over the phone, or from the other side of a nursing home window – loved ones suffering from the devastating impact of isolation. “To think in her final year[s] when she is most vulnerable and most in need of love and support from her children and was denied this for 6 months is in my opinion devastating,” one caregiver said in a survey of 518 caregivers, the vast majority of them women and mainly daughters…

October 14, 2021