livelux in Money & Power—
It’s no secret that people are living better due to better health care, exercise, etc… In the U.S., the average life was just 47 years back in 1900. That has steadily increased to 78 years in 2010. As our population continues to grow, it’s also quickly aging. The main reason is the “Baby Boomer” generation. Each day in the U.S., about 10,000 people turn the golden age of 65 years old.
Living longer gives us more time to enjoy life, but can also put add a lot of stress worrying about how to keep the money flowing during retirement. By the year 2030, almost one in five Americans will be at the retirement age of 65 or older.Unfortunately, money during retirement will be a huge problem for many of them, but there is still time to change that.
Chris Orestis is the CEO of Life Care Funding and senior health-care advocate. He was quoted, “With 30 percent of the Medicaid population consuming 87 percent of Medicaid dollars on long-term care services, we can see that’s not going to be sustainable. More individuals will be forced to find their own resources to pay for those needs.”
Several states including California, Texas, Florida and New York are welcoming legislation that requires seniors to be notified when they can convert their life insurance policy for 30 to 60 percent of its death benefit value. The money received via this manner can then be placed into an irrevocable fund that can be specifically designated for any form of care they choose.
This method offers the policy owner the option to use their own policy while still alive to help pay for their choice of any form of senior care services.
Orestis provides three additional ways for seniors to better cope with long-term care and other budgetary issues during retirement:
• Long-term care is a matter of survival, so use your best options. The practice of converting a life insurance policy into a Life Care Benefit has been an accepted method of payment for private duty in-home care, assisted living, skilled nursing, memory care and hospice care for years. Instead of abandoning a policy when they can no longer afford the premiums, policy owners have the option to take the present-day value of the policy while they are still alive and convert it into a Long Term Care Benefit Plan. By converting the policy, a senior in retirement will remain in private pay longer and be able to choose the form of care that they want but will be Medicaid-eligible when the benefit is spent down.
• Senior discounts really add up! Restaurants, supermarkets, department stores, travel deals and other merchants give various senior discounts with minimum age requirements ranging from 55 to 62. Some of these places are worth making habits, and don’t forget your free cup of coffee at Dunkin’ Donuts if you’re 55 or older, and don’t be shy – at many of these places you’ll have to ask for the discount.
• Your “last act” may be decades away, so plan accordingly. It makes sense to finally enjoy your money after a lifetime of savings, but be smart about it. Take time to organize your paperwork even before retirement and create a master file that holds things such as insurance policies, investments, property, wills and trusts, etc. so you have your financial picture in one place. Also, live smart today and hold off on that new car if you don’t need a new one. If your current car is paid off and you sit tight for an additional two years, you’ll save $7,200 on a new car with $300 monthly payments. Refinancing your home may also be a very good idea, since rates are still hovering around their all-time lows. Get at least three quotes, compare rates, terms and potential penalties to make sure you’re getting the best deal. Also, live healthy and buy more fruits and vegetables and less junk food to lessen the chance you’ll need long-term care in the future.
Posted November 21, 2013