RetirementRevised: Recent Episodes
Mark Miller
Journalist and author Mark Miller on getting retirement right - featuring downloadable guides and podcast interviews with nationally-recognized experts.
retirementrevised.substack.com
The podcast is back this week with the first new episode since February.
I’m breaking my radio silence with a special guest. Jill Schlesinger reports on personal finance for CBS television and radio, and she’s the host of the very popular radio show Jill on Money. She has just published The Great Money Reset - Change your Work, Change your Wealth, Change Your Life, a book about how to re-think - well, everything in the wake of the pandemic.
I interviewed Jill for a recent New York Times story about starting a business later in life. That story was about how solo entrepreneurship can improve your retirement, by helping you delay a Social Security claim and saving and investing. These strategies are a central theme of Retirement Reboot.
Jill offered some wonderful insights about how to engineer a transition like that from a financial standpoint. But her book goes much wider than that. In this podcast interview, we discussed some of the transitions that have been meaningful in Jill’s own life, and I made sure to get some good financial tips that I hope you’ll find helpful.
I’ll be back with more podcast episodes later in the summer, and the newsletter will be arriving in your inbox periodically between now and Labor Day. Meanwhile, I hope you enjoy my conversation with Jill Schlesinger.
Click the player icon at the top of the newsletter to listen to our conversation.
Retirement Reboot: The podcast
Earlier this year, I produced a series of six podcast episodes focusing on the key themes of Retirement Reboot. It includes episodes on Social Security optimization, navigating Medicare, saving for retirement and more. You can find all six episodes here, or Apple Podcasts, Spotify or IHeart Radio.
What I’m reading
Social Security COLA for 2024 is estimated at 3.1% . . . Moving is a big task for many older Americans - these organizers can help . . . Thoughts from Steve Vernon on how to recession-proof your retirement.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
This week, the newsletter features the last episode of the Retirement Rebootcast - the special podcast series on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track.
Retirement Reboot is chock full of practical strategies for your retirement plan. But in the last chapter of the book, I argue that we also must pay attention to public policy on our key social insurance programs. And, I lay out my vision for expanding Social Security and pushing back against the growing privatization of Medicare - something I regard as antithetical to the very concept of social insurance.
My guests for this episode are two top experts on Social Security and Medicare who have a terrific sense of the historical trajectory of both programs. Judith Stein is the executive director and founder of the Center for Medicare Advocacy, one of the nation’s most important consumer protection and policy organizations working on Medicare. Nancy Altman is president of Social Security Works, which advocates for protection and expansion of Social Security. Nancy is one of the most knowledgeable people in the United States on Social Security. She is the author of several authoritative books on Social Security, and she serves on the Social Security Advisory Board, a nonpartisan federal agency that advises the President, Congress, and the Commissioner of Social Security.
I invited Judy and Nancy to join me for a discussion of social insurance - past, present and future. Click the player icon at the top of the newsletter to listen to the episode. You also can find the RetirementRevised.com podcast on Apple Podcasts or Spotify.
The entire six-part podcast series is now online. I hope you’ve enjoyed all of these conversations with experts on key retirement topics, but in case you missed any of them, here are links to earlier episodes.
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Introduction: An overview of the book featuring a conversation with Chris Farrell, senior economics contributor for Marketplace, the public radio program. Chris wrote the foreward to Retirement Reboot.
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Let’s Make a Plan. Far too many people don’t take the time to make an actual financial plan for retirement – and that’s a real misstep.
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Optimizing Social Security. For most of us, Social Security will be the most important retirement benefit – full stop. Decisions about when to claim can make a big difference in your lifetime income.
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Navigating Medicare. Along with Social Security, there’s nothing that will have a more important impact on your retirement security than making smart choices about navigating Medicare. The centrist thinking on social insurance reform that really isn’t
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Building Savings. Starting as early as possible is the name of the game when it comes to saving for retirement. But if you’re getting close to retirement and haven’t been able to save much, don’t despair: it is still possible to build significant savings late in the game.
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Toward a New Social Insurance Era. The argument for expanding Social Security, and for pushing back against the growing privatization of Medicare (today’s episode).
Beware the centrist arguments on Social Security reform
The Washington Post published an editorial this week laying out an approach to reforming Social Security and Medicare that typifies what passes for “centrist” thinking about these programs in Washington these days. It’s wrong in so many ways, but here are the most egregious elements that caught my eye:
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The Post seems to favor a behind-closed-doors "super-committee" tasked with proposing solutions for up or down vote. That’s just a way for lawmakers to avoid accountability - we need transparent, open debate on these issues so we know where each and every politician stands. The "super-committee" idea allows lawmakers to "hold hands and jump off the cliff together," as they like to say, making unpopular and unwarranted cuts to social insurance programs. Let's debate the issues in the open and see who wants to cut benefits, and who does not.
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The editorial conflates the financial issues facing these two programs - but they are very different. Social Security is funded mostly from payroll tax contributions, while Medicare funding is a hybrid of payroll taxes (Part A), and general revenue and premiums (Part B and Part D). The financial pressures affecting these two programs differ, and need to be thought about and addressed separately.
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The Post seems to think that raising the Medicare age is a reasonable idea, suggesting that this would simply mirror the Social Security full retirement age (67 for those born after 1960.). But unifying the retirement ages for the two programs really makes no sense. Workers could still file for Social Security anytime from 62 to 70, and that wouldn't change.
There will be a push at some point to increase the Social Security full retirement age further, to age 70. Any change of that type most likely will affect younger workers, not people nearing retirement or already retired. And younger workers really need to pay attention this. The 1983 reforms that boosted the Social Security retirement age to 67 from 65 already has cut benefits by 13% for everyone born 1960 or later. GenX, Millenial and younger generations should realize they're already on track to get less out of the program than previous generations did. And younger workers certainly should oppose a higher Medicare age, which would push millions into higher-cost and less robust ACA policies after they retire while waiting for Medicare at 67.
The underlying idea that "everyone is living longer" and therefore "we all will be working longer" is false. Yes, higher-educated, more affluent people are living and working longer. But that's not true across the board. Vast majority of workers have filed for Social Security by their full retirement age.
Retirement Reboot in the news
There are no miracles, quick fixes for retirement saving. Chris Farrell reviews Retirement Reboot in his Minneapolis Star-Tribune column.
What I’m reading
The next retirement communities won’t just be for seniors . . . Target date funds had a rocky 2022 . . . Fed's interest-rate hikes make T-bills an attractive, safer investment . . . GoodRx leaked health data to Facebook and Google . . . Why states need master plans for aging . . . Government lets health plans that ripped off Medicare keep the money . . . Short on cash, more Americans tap 401(k) savings for emergencies . . . The market tanked, but Americans kept piling money into their 401(k)s . . . Mark Cuban and Amazon are shaking up generic drugs . . . Green funds cost three times more than you think . . . SEC puts dual-registered advisors on notice in risk alert . . . Retirees lost millions to romance scams during the pandemic . . . Navigating the first year of retirement, a couple hops on a tandem bike . . . The medicine is a miracle, but only if you can afford it.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Hello, and welcome to the Retirement Reboot-cast. That’s what I’m calling this special podcast series on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. The book was just published in January , so I invited some of my favorite experts on retirement to join me on the show to talk about some of its key ideas.
I wrote Retirement Reboot with a very particular group of readers in mind: people getting close to retirement who are not financially prepared. In other words, people who have not been able to save much -or anything - for retirement. They’re headed toward a retirement living only on Social Security, which typically replaces about 40% of their working income. Meanwhile, the rule of thumb is that most of us will need to replace at least 70% of our wage income when we retire.
The book offers a series of strategies for improving on that math. The key chapters discuss the importance of making a plan, timing your retirement and how to get the most from Social Security and Medicare.
But on this episode, let’s talk about investing for retirement - even if you’re getting a late start. The chapter of Retirement Reboot that addresses this topic walks through a simple approach to saving for retirement, focused on very-low-cost passive index funds. And, it illustrates that it’s possible to accumulate a meaningful nest egg even if you’re playing catch-up. That’s because the goal line is not the day you retire - your investing and returns from it continue well into retirement. My guest is Christine Benz, director of personal finance at Morningstar, one of the premier companies for analysis and research on investing.
I chatted with Christine about investing basics like the importance of diversification and balance and keeping fees low. We also get into a few of the more advanced topics, such as asset location and safe withdrawal strategies.
Click on the player icon at the top of the newsletter to listen to the podcast. You can also find the program on Apple Podcasts or Spotify (search for “Retirement Revised”).
Listen to the Rebootcast series
Next week, I’ll be airing the last episode in this limited-edition series about my new book, Retirement Reboot. I hope you’ve enjoyed all of these conversations with experts on key retirement topics, but in case you missed any of them, here are links to earlier episodes.
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Introduction: An overview of the book featuring a conversation with Chris Farrell, senior economics contributor for Marketplace, the public radio program. Chris wrote the foreward to Retirement Reboot.
-
Let’s Make a Plan. Far too many people don’t take the time to make an actual financial plan for retirement – and that’s a real misstep. If you don’t have a plan, it’s impossible to know whether you are on track to meet your goals. My guests are Steve Chen, the founder of New Retirement, and Steve Vernon, the well-known retirement educator and author.
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Optimizing Social Security. For most of us, Social Security will be the most important retirement benefit – full stop. Decisions about when to claim can make a big difference in your lifetime income. For this episode, I invited two of the most knowledgeable people I know on the topic of Social Security claiming. Mary Beth Franklin is a contributing editor at Investment News magazine, specializing in Social Security, Medicare and Retirement income. Bill Reichenstein is a professor of investment management at Baylor University, a co-founder of Social Security Solutions – a company that has developed a terrific set of online software tools that help individuals and financial professionals sort through claiming decisions. He is the co-author of a book titled Social Security Strategies: How to Optimize Retirement Benefits.
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Navigating Medicare. Along with Social Security, there’s nothing that will have a more important impact on your retirement security than making smart choices about navigating Medicare. Joining me are two top Medicare experts: Tricia Neuman, executive director of the Medicare program at the Kaiser Family Foundation, and Fred Riccardi, president of the Medicare Rights Center.
Retirement Reboot in the news
I was a guest on the terrific Friends Talk Money podcast, which is hosted by Rich Eisenberg, Terry Savage and Pam Krueger. The video is below, or listen here. Rich also interviewed me about my six core ideas for improving your retirement outcome for his MarketWatch column.
I also joined Chuck Jaffe on his Money Life radio show to talk about the book. Here’s the episode, our conversation starts around the 17-minute mark. Or listen to it below:
Checked your Social Security statement lately?
If you have not yet claimed Social Security, and haven’t downloaded your Social Security statement lately, this would be a good time to do it. The statements have been updated to reflect the historic 8.7% cost-of-living adjustment, so your projected benefit just got significantly larger. The new number should be plugged into whatever retirement planning software you (or your financial planner) are using.
If you are 62 or older, your future benefit is adjusted to reflect the annual COLA.
If you haven’t set up your free online account with the Social Security Administration, go ahead and do that. This is where you can access your statement, claim benefits and transact other business with the SSA.
What I’m reading
The art of asset location . . . Senior housing that seniors actually like . . . An alternative, optimistic take on population decline . . .Politicians want to keep money out of ESG funds, but it might backfire . . . Did your health plan rip off Medicare?
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Welcome to the Retirement Rebootcast. That’s what I’m calling this special podcast series on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. The book is out this month, so I invited some of my favorite experts on retirement to join me on the show to talk about some of its key ideas.
I wrote Retirement Reboot with a very particular group of readers in mind: people getting close to retirement who are not financially prepared. In other words, people who have not been able to save much -or anything - for retirement. They’re headed toward a retirement living only on Social Security, which typically replaces about 40% of their working income. Meanwhile, the rule of thumb is that most of us will need to replace at least 70% of our wage income when we retire.
The book offers a series of strategies for improving on that math. The key chapters discuss the importance of making a plan, timing your retirement and how to get the most from Social Security and Medicare. I also discuss strategies for building savings, even late in the game, and tapping home equity. From there, I go on to discuss managing your career late in the game, the value of professional advice, how to manage long-term care risk and how to approach the idea of aging in place.
For this episode, let’s have a conversation about Medicare. Along with Social Security, there’s nothing that will have a more important impact on your retirement security than making smart choices about navigating Medicare. And this actually is a more complicated challenge than claiming Social Security. Medicare is a great program, and most seniors love it once they enroll. But the program has evolved over the last couple decades in ways I think are unfortunate. There has been an enormous amount of needless privatization of coverage, whether that’s the Part D prescription drug program, or Medicare Advantage, the commercial managed care alternative to traditional Medicare.
In Retirement Reboot, I walk readers through my somewhat counterintuitive argument about the choice between traditional Medicare and Advantage. The Advantage program has been growing quickly in recent years, but I lay out reasons why you’re much better off in the traditional program - assuming you can afford the somewhat higher upfront premium costs.
For this episode, I invited two of the most knowledgeable Medicare experts I know to join me. Both played a critical role in helping to review and comment on the Medicare chapter of Retirement Reboot. My guests are Tricia Neuman, executive director of the Medicare program at the Kaiser Family Foundation, and Fred Riccardi, president of the Medicare Rights Center. Kaiser is one of the most important, authoritative sources of research and information on health care in the U.S. And the Medicare Rights Center is a leading advocacy and consumer assistance organization.
This episode of the podcast runs a little longer than usual - around an hour. But I hope you’ll stick around for the entire conversation, because Tricia and Fred offer some terrific insights. We talked about the pitfalls to avoid when you first sign up for Medicare, the key differences between traditional Medicare and Advantage, how to pick a Medigap policy, where to get expert help with Medicare choices - and a whole lot more.
Click the player icon at the top of the newsletter to listen to the podcast. You can also find it on Apple Podcasts or Spotify (search for Retirement Revised).
Liked the book? Do me a favor - please review it!
If you’ve already read Retirement Reboot, please do me a small favor and review it on Amazon. You need not have purchased your copy at Amazon to leave a review there - and positive reviews are one of the most important factors driving in book sales. You can find the button to leave a review in the lower third of the Amazon page for Retirement Reboot.
A new Retirement Reboot excerpt
Morningstar published an excerpt from the chapter of Retirement Reboot that examines strategies for optimizing Social Security. In this excerpt, I explain why Social Security benefits are so valuable, the annual cost-of-living adjustment, how benefits are calculated and how to time your claim of benefits. If you missed last week’s podcast on this topic, you can find here. The episode featured a conversation with two of the country’s best experts on Social Security - Mary Beth Franklin of Investment News and William Reichenstein of Social Security Solutions.
What I’m writing
2022 was a consequential year in Washington, D.C. for changing retirement systems in the United States. But the changes are a mixed bag—some are very good, while others nibble around the edge of root problems. And some reforms will assist only the most affluent households who need help least.
What I’m reading
Medicare will begin penalizing nursing homes that give residents a false label of schizophrenia, a practice that many facilities have used to skirt restrictions on antipsychotic drugs, which can be especially dangerous for older people . . . Nurses are burned out and fed up, with good reason . . . How to make a caregiving plan . . . Older And disabled Americans are languishing for years on waiting lists for home-based care.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Welcome to the third edition of theRetirement Rebootcast! This is a special limited-edition podcast series focused on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. The book is out this month, so I invited some of my favorite experts on retirement to join me on the program to talk about some of its key ideas.
I wrote Retirement Reboot with a very particular group of readers in mind: people getting close to retirement who are not financially prepared. In other words, people who have not been able to save much -or anything - for retirement. They’re headed toward a retirement living only on Social Security, which typically replaces about 40% of their working income. Meanwhile, the rule of thumb is that most of us will need to replace at least 70% of our wage income when we retire.
The book offers a series of strategies for improving on that math. The key chapters discuss the importance of making a plan, timing your retirement and how to get the most from Social Security and Medicare. I also discuss strategies for building savings, even late in the game, and tapping home equity. From there, I go on to discuss managing your career late in the game, the value of professional advice, how to manage long-term care risk and how to approach the idea of aging in place.
For this third episode of the series, let’s have a conversation about how to get the most from Social Security. For most of us, Social Security will be the most important retirement benefit - full stop. Decisions about when to claim can make a big difference in your lifetime income. Especially for couples, there can be some interesting choices. Making smart choices has never been more important, especially because Social Security benefits are less generous than in the past. The gradual increases in the full retirement age put in motion by the reforms of 1983 are close to being fully phased in - and that effectively raises the bar on what it takes to generate income from the program.
For this episode, I invited two of the most knowledgeable people I know on the topic of Social Security claiming.
Mary Beth Franklin is a contributing editor at Investment News magazine, specializing in Social Security, Medicare and Retirement income. She’s been a financial journalist for more than 40 years, covering everything from federal budget and tax policies as a Capitol Hill reporter to consumer finances at Kiplinger’s Personal Finance magazine. One unusual twist for Mary Beth as a journalist - in 2015, she became a Certified Financial Planner in 2015. She is the author of “Maximizing Your Social Security Retirement Benefits.”
William Reichenstein is a professor of investment management at Baylor University, a co-founder of Social Security Solutions - a company that has developed a terrific set of online software tools that help individuals and financial professionals sort through claiming decisions. He is the co-author of a book titled Social Security Strategies: How to Optimize Retirement Benefits.
Along with claiming strategies, I asked Mary Beth and Bill to talk about Social Security's financial challenges and public worries about the program's future. We also talked about how Social Security might change in the years ahead.
Click the player icon at the top of the newsletter to listen to the podcast - or find it on Apple Podcasts or Spotify (search for “Retirement Revised”).
The Retirement Rebootcast will have six episodes. Next week we’ll take a deep dive into navigating Medicare. My guests will be Tricia Neuman of the Kaiser Family Foundation, and Fred Riccardi of the Medicare Rights Center.
Retirement Reboot in the news
In a new essay for Newsweek, I explain the possible cuts facing Social Security - and why we need to move in the opposite direction by expanding the program and shoring up its finances. This is adapted from the chapter of Retirement Reboot titled “Toward a New Social Insurance Era.” I also spoke with Kerry Hannon of Yahoo! Finance about the need to make Social Security bigger - not smaller - to improve retirement security.
Join me for an interactive workshop on retirement planning
I’ll be discussing Retirement during an interactive, online workshop on January 24th. I hope you’ll join me!
The 90-minute workshop, hosted by Bookends University, will offer practical strategies for improving your retirement prospects, even if your savings are meager and retirement is looming! It will draw from material in Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track.
We’ll walk through core decisions to make now to improve retirement outcomes, including
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Timing Your Retirement
-
Optimizing Social Security
-
Navigating Medicare
-
Tapping Home Equity
-
Building Savings
-
Financing long-term care needs
Tuition for the event is $45, which includes a copy of Retirement Reboot. Bookends University is sponsored by Bookends & Beginnings, my favorite independent bookstore. You can pick up your copy at the store if you’re local, or have it mailed to you.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Welcome to the second edition of theRetirement Rebootcast! This is a special limited-edition podcast series focused on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. On this podcast series, I invited some of my favorite experts on retirement to join me on the program to talk about some of its key ideas.
The book’s official publication date is today - January 10th!
I wrote Retirement Reboot with a very particular group of readers in mind: people getting close to retirement who are not financially prepared. In other words, people who have not been able to save much -or anything - for retirement. They’re headed toward a retirement living only on Social Security, which typically replaces about 40% of their working income. Meanwhile, the rule of thumb is that most of us will need to replace at least 70% of our wage income when we retire.
The book offers a series of strategies for improving on that math. The key chapters discuss the importance of making a plan, timing your retirement and how to get the most from Social Security and Medicare. I also discuss strategies for building savings, even late in the game, and tapping home equity. From there, I go on to discuss managing your career late in the game, the value of professional advice, how to manage long-term care risk and how to approach the idea of aging in place.
On this second episode, let’s talk about the importance of making a plan for retirement. It’s something far too many people don’t take the time to do - and that’s a real misstep. If you don’t have a plan, it’s impossible to know whether you are on track to meet your goals. A plan is not a crystal ball, but it provides a context, and a set of tools for decision-making. And it’s very important to approach the plan holistically - it’s about much more than saving and investing.
For this episode, I invited two experts to join me to help illustrate two important points from Retirement Reboot that I want to get across about planning. Steve Chen is the founder of New Retirement, an innovative low-cost online service that has developed a terrific set of planning tools. Steve’s company illustrates how planning isn’t just for the wealthy anymore. I also invited Steve Vernon to join me. Steve is an actuary, and a retirement educator and author. He’s a leader in developing holistic approaches to planning - he’s joining us here to explain why too many people confuse investing and planning, and why a holistic focus is essential.
Click the player icon the hear the podcast - or listen to it on Apple Podcasts or Spotify.
The Retirement Rebootcast will have six episodes. Next week we’ll take a deep dive into getting the most out of Social Security. My guests will be two of the most knowledgeable Social Security experts in the United States - Mary Beth Franklin of Investment News, and Bill Reichenstein, cofounder of Social Security Solutions and an emeritus professor of finance at Baylor University.
Retirement Reboot in the news
The New York Times ran an excerpt from Retirement Reboot last weekend. It was adapted from the chapter on the value of financial planning advice . . . I joined Christine Benz and Jeff Ptak for a conversation about the book on the Morningstar podcast The Long View . . . And, I chatted with Marc Miller, host of the Career Pivot podcast, about broad themes of Retirement Reboot.
Join me for an interactive workshop on retirement planning
I’ll be discussing Retirement during an interactive, online workshop on January 24th. I hope you’ll join me!
The 90-minute workshop, hosted by Bookends University, will offer practical strategies for improving your retirement prospects, even if your savings are meager and retirement is looming! It will draw from material in Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track.
We’ll walk through core decisions to make now to improve retirement outcomes, including
-
Timing Your Retirement
-
Optimizing Social Security
-
Navigating Medicare
-
Tapping Home Equity
-
Building Savings
-
Financing long-term care needs
Tuition for the event is $45, which includes a copy of Retirement Reboot. Bookends University is sponsored by Bookends & Beginnings, my favorite independent bookstore. You can pick up your copy at the store if you’re local, or have it mailed to you.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Happy New Year - and welcome to the first edition of theRetirement Rebootcast!
That’s the slightly tongue-in-cheek name I’ve given to this special limited-edition podcast series focused on my new book - Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. The official publication date is January 10th, and I invited some of my favorite experts on retirement to join me on the program over the coming weeks to discuss some of the key ideas explored in the book’s chapters.
I wrote Retirement Reboot with a very particular group of readers in mind: people getting close to retirement who are not financially prepared. In other words, people who have not been able to save much -or anything - for retirement. They’re headed toward a retirement living only on Social Security, which typically replaces about 40% of their working income. Meanwhile, the rule of thumb is that most of us will need to replace at least 70% of our wage income when we retire.
The book offers a series of strategies for improving on that math. The key chapters discuss the importance of making a plan, timing your retirement and how to get the most from Social Security and Medicare. I also discuss strategies for building savings, even late in the game, and tapping home equity. From there, I go on to discuss managing your career late in the game, the value of professional advice, how to manage long-term care risk and how to approach the idea of aging in place.
For this first episode, I wanted to provide an overview of the key themes of the book. So, I decided to turn the tables - and invite another journalist on the show to interview me.
Chris Farrell is the senior economics contributor for the national radio program Marketplace. He seemed like the ideal choice to do the interview - since he wrote the forward to the book. Listen to our conversation by clicking the player icon at the top of the newsletter. Or, subscribe to the program on Apple Podcasts or Spotify - just search for “Retirement Revised.”
The Retirement Rebootcast will have six episodes, released weekly through January and early February. Next week, we’ll consider the importance of making a plan for retirement. My guests will be Steve Chen, founder of New Retirement, and Steve Vernon, an actuary, author and retirement educator.
Retirement Reboot in the news
WealthManagement.com published an excerpt from one of my favorite chapters in Retirement Reboot - Toward a new social insurance era. The chapter traces the history of social insurance in America, arguing that we have strayed too far from the roots of these signature policy achievements for the United States. And Mitch Tuchman of Rebalance reviewed the book for Marketwatch, writing: "Any complete retirement planning bookshelf needs a copy of Retirement Reboot. If you’re just beginning your journey, it’s a great place to start.”
Join me for an interactive workshop on retirement planning
I’ll be discussing my new book during an interactive, online workshop on January 24th. I hope you’ll join me!
The 90-minute workshop, hosted by Bookends University, will offer practical strategies for improving your retirement prospects, even if your savings are meager and retirement is looming! It will draw from material in Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track.
We’ll walk through core decisions to make now to improve retirement outcomes, including
-
Timing Your Retirement
-
Optimizing Social Security
-
Navigating Medicare
-
Tapping Home Equity
-
Building Savings
-
Financing long-term care needs
Tuition for the event is $45, which includes a copy of Retirement Reboot. Bookends University is sponsored by Bookends & Beginnings, my favorite independent bookstore. You can pick up your copy at the store if you’re local, or have it mailed to you.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
I get questions from time to time about retirement strategies from my own children. They’re all young working adults, and they are starting to navigate the world of saving and investing - and they have plenty of questions about Social Security. So on this edition of the podcast, I invited my kids to send in their questions about retirement - and a couple that came in from my nieces.
The questions:
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How should I balance my saving in retirement accounts and other savings that can be accessed for emergencies or other spending needs?
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How can I save for retirement if I don’t have access to a 401(k) plan?
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How can I save for retirement while also making socially-responsible investments?
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Should I worry about the future of Social Security?
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How will my Social Security benefit be calculated?
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When does it make sense to accelerate mortgage payments?
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Looking back, what do you wish you had known about retirement when you were in your twenties or thirties?
One thing I’ve noticed about young people is that they really are thinking ahead about retirement. That’s more than I can say for myself at that age. And there’s nothing more powerful than getting an early start on saving.
This will be the last newsletter and podcast of 2022 - I’ll be back right after New Year’s with the first installment of a six-part series on the key ideas in my new book, Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track. The book goes on sale January 10th, and it’s already available for pre-order everywhere.
Click the player icon at the top of the newsletter to listen to the podcast. You also can subscribe on Apple Podcasts or Spotify - just search for “Retirement Revised.”
Background reading for this podcast
Blackrock’s pitch for sustainable investing antagonizes all sides . . . The hidden cost of IRA rollovers . . . Seven tips for young retirement savers . . . Towards a new social insurance era . . . Should you pay off your mortgage?
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
The podcast is back this week with a look at the historic cost-of-living adjustment in Social Security benefits announced this morning.
The Social Security Administration announced that benefits will rise by 8.7% in 2023. That’s a big raise for more than 52 million retired Americans, and another 18 million who are survivors of covered workers or recipients of disability benefits or Supplemental Security Income. The maximum amount of earnings subject to the Social Security tax will increase to $160,200 from $147,000.
I published an in-depth story about the Social Security COLA in the New York Times this week that’s been drawing a lot of traffic, comments and questions. It answers a variety of questions about the COLA. The story explains why the 2023 COLA will be so high, and it discusses the accuracy of the COLA in tracking inflation for seniors. I even get into how the inflation hike might impact your taxes.
For the podcast, I invited a panel of experts on Social Security to join me to talk about the COLA. We took a dive into the history of the COLA and why it is so important to the well-being of seniors. We also got into the question of adequacy of benefits. With such a big headline COLA figure, it’s tempting to think that seniors are living on easy street. But keep in mind that the COLA does no more than keep seniors even with inflation. The reality is that about half of seniors struggle to meet their basic living expenses.
Joining me are three guests.
Nancy Altman is president of Social Security Works, one of the most important advocacy groups working to protect and expand Social Security. Nancy also is an appointed member of the Social Security Advisory Board - a bipartisan, independent federal government agency that advises the President, Congress, and the Commissioner of Social Security on Social Security programs.
Ramsey Alwin is president and CEO of the National Coalition on Aging, one of the key organizations that advocates on behalf of seniors. Much of Ramsey’s work has focused on economic security and seniors, with a special focus on poverty.
Bill Arnone is the CEO of the National Academy of Social Insurance. NASI is a non-profit, non-partisan organization made up of the nation’s leading experts on social insurance. Bill’s professional background also includes expertise in taxes and employee benefits.
Listen to the podcast by clicking the player icon at the top of the newsletter, or check it out wherever you get your podcasts.
Also see this Times story on how the COLA will bring relief to millions of seniors.
Medicare open enrollment gets underway this weekend
Open enrollment runs from October 15th through December 7th, and my Morningstar column this month examines the barrage of marketing seniors face each fall for Medicare Advantage plans. Some of that advertising has sparked a surge in consumer complaints about deceptive claims, and new rules from Medicare aimed at curbing deceptive advertising practices by third-party marketers of Medicare Advantage and Medicare Part D plans.
An update on vaccination
I found this update on vaccination in the U.S. from the PBS NewsHour especially helpful.
The number of confirmed and reported COVID cases in the U.S. is at its lowest point since last spring. But the average number of deaths associated with COVID remains at more than 350 a day. Public health experts are increasingly concerned that too many Americans are missing out on a chance to get new boosters and avoid a worse winter.
The Kaiser Family Foundation reports that awareness of the updated boosters is relatively modest, with about half of adults saying they’ve heard “a lot” (17%) or “some” (33%) about the new shots. About a third of all adults (32%) say they’ve already gotten a new booster dose or intend to get one “as soon as possible.”
What I’m reading
Congress may boost catch-up contribution limits . . . A new frontier for hearing aids . . . In-depth guide to over-the-counter hearing aids . . . Older storm victims face an uncertain future . . . Work remotely from anywhere.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
This week on the podcast, we take a wide-ranging look at important changes going on in Medicare. My guest is a top expert on the program - Phillip Moeller. Phil is an award-winning financial journalist and author who has studied both Medicare and Social Security very closely. He’s the co-author of one of the best books on Social Security, called Get What's Yours - The Secrets to Maxing Out Your Social Security. And he is the sole author of two other volumes in the Get What’s Yours series, including Get What's Yours for Medicare: Maximize Your Coverage, Minimize Your Costs. Phil also writes an excellent newsletter on Substack, the same platform that I use to bring you my newsletter and podcast.
I talked with Phil about an important set of changes to the Medicare Part D prescription drug program that Congress seems about ready to approve. We should have news about the legislation by the end of this week, or perhaps over the weekend, and if it does become law, I’ll be writing more about it.
The bill would allow Medicare - for the first time - to negotiate the prices of the most expensive brand-name prescription drugs with pharmaceutical companies. That’s a big deal, and it could save quite a bit of money for enrollees and taxpayers over time - Medicaid and the Department of Veterans’ Affairs have been negotiating drug prices for years, and they generally pay about 30% less for drugs than Medicare does.
The legislation would also place a $2,000 cap on enrollees’ annual out-of-pocket costs. And it incents drug makers to avoid large price increases by penalizing them for increases that exceed the general inflation rate in the economy.
Here’s an overview of what the legislation would do, and when, courtesy of the Kaiser Family Foundation.
I also spoke with Phil about the ongoing privatization of Medicare through the Medicare Advantage program - and the next big potential privatization wave which is coming in the form of Accountable Care Organizations for people enrolled in traditional Medicare.
Finally, we speculated a bit about what the Part B premium and Social Security COLA will look like in 2023.
Click the player icon at the top of the newsletter to listen to my conversation with Philip Moeller.
What I’m reading
The mental health benefits of doing nothing . . . The benefits of paying off a mortgage . . . Pope Francis, slowed by aging, finds lessons in frailty . . . Factoring the costs of climate change resilience into retirement planning.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
This week on the podcast, let’s talk about the value of time.
Time has value to us - both in personal and economic terms. It’s something we often fail to consider when making decisions about how long to work and when to retire. These decisions often focus only on the financial aspects of retirement planning. But as we get older, time becomes a more limited commodity - it’s just that we don’t know exactly how much of it we have left. And, deciding how to use the time available to us involves much more than money.
My guest on the podcast this week has had hundreds of conversations with people nearing the end of their lives. They often talk about the things they wish they had spent more time on, and what they wish they had worried about less.
Jordan Grumet has an unusual career profile. He’s a physician who specializes in hospice care. And, he is a personal finance blogger and host of the Earn & Invest podcast - and the author of a new book, Taking Stock: A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life.
In his medical practice, Jordan often talks with patients who may have only weeks or months to live. And the lesson he draws from these conversations is that most of us spend too much time thinking about money, and not about our purpose in living, our identity and personal connections. In his book, Jordan draws out the lessons from those conversations in a way that we can all start using now.
I think there are some really useful points here that can be especially helpful for people thinking through the issue of retirement timing - when to do it, how to manage it financially and how to do it in a way that is personally meaningful.
Click the player icon at the top of the newsletter to listen to my conversation with Jordan Grumet.
How Medicare reforms could help retirees facing high inflation
Seniors tell pollsters that high inflation is one of their top worries - and that makes sense. Aside from Social Security, which is adjusted annually to reflect consumer prices, retiree income is fixed.
Policymakers have talked over the years about making the Social Security cost-of-living formula more generous, but that would just be a tweak. If we really want to help seniors cope with inflation, we need to tackle the rising cost of health care, which historically has increased more quickly than general inflation.
Congress is considering an important step in this direction with a proposal aimed at containing prescription drug prices. The proposed legislation would empower Medicare for the first time to negotiate the price of some high-cost drugs with their manufacturers. That approach has been in place for a long time in the Medicaid program, and at the Department of Veterans Affairs, and it has proven effective.
Just as important, the bill would place a hard cap of $2,000 on out-of-pocket costs for Part D enrollees. And it would require pharmaceutical makers to pay rebates if drug price increases exceed general inflation.
But we need to do more. I offer some further suggestions in my latest Reuters Money column.
What I’m reading
How being an older worker pushed me out of my comfort zone . . . Multi-generational housing arrangements are taking root . . . Social Security data show pandemic’s toll — and a path forward . . . A neurologist’s tips to protect your memory . . . Endemic COVID-19 looks pretty brutal . . . Promoting climate change activism among older people.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
My guest on the podcast this week is Kerry Hannon, an expert on the future of work and careers. Kerry is a columnist for Yahoo! Finance - and the author of an excellent and timely new book that considers ways that older workers can succeed in the pandemic labor market. It’s called In Control At 50 - How to Succeed in the New World of Work.
If you are struggling to determine your late-career moves in the pandemic labor market, Kerry’s book is for you. In this conversation, we focused on the five key themes of In Control at 50+:
Remote work is no longer a perk
Contract positions are swelling
Midlife entrepreneurship is increasingly viable
Older workers are making “dream” career changes
Lifelong learning remains valuable
Click the player icon at the top of the newsletter to listen to my conversation with Kerry Hannon.
The financial health of Medicare and Social Security: A closer look
Forecasting the financial health of Social Security and Medicare brings to mind that old saying: “It’s tough to make predictions, especially about the future.”
The quip usually is attributed to baseball legend Yogi Berra, although it actually seems to originate with a Danish politician circa 1948. No matter the source, it’s a suitable comment when considering forecasts about our two most important retirement programs.
Two years ago, plenty of pundits were warning that the pandemic-induced economic plunge would blow huge holes in these critical social insurance programs. But reports issued this month by the Medicare and Social Security trustees show that the strong economic rebound last year contributed to slight improvements in their health.
More people were working and paying Federal Insurance Contributions Act, (FICA) taxes last year. As a result, Social Security’s trustees forecast that the combined retirement and disability trust funds will be depleted in 2035—one year later than last year’s forecast. The Medicare trustees report that the Hospital Insurance trust fund will be emptied in 2028—two years later than forecast last year.
Still, both of those dates are too close for comfort—and long-term problems loom for both trust funds.
Learn more in my Morningstar column.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit retirementrevised.substack.com
Tax day is coming up, so this episode of the podcast focuses on how taxation changes when you retire. I wrote about this topic recently for The New York Times, and one of my sources for that story joins me this week - Ed Slott.
Ed is a CPA and a very well-known author and host of educational seminars on public television.
Ed likes to say that taxes don’t stop in retirement - they’re really just getting started. I’d say he’s right about that insofar as higher income retirees go - you’ll be paying taxes on part of your Social Security, and probably surcharges on Medicare premiums. Those aren’t technically taxes, but they sure feel like it when you’re paying them. Drawdowns from tax-deferred IRAs and 401ks are taxed as ordinary income…and possibly at high rates.
In the Times story, I reported on a study using IRS data that shows the tax burden for the majority of households actually falls in retirement. That means most middle and lower-income households. One reason taxes fall is that you’re not making payroll tax contributions. But income taxes tend to fall because total income is lower, and only part of Social Security is taxable.
I asked Ed to walk us through how taxes change in retirement. We also talked about the latest retirement legislation making its way through Congress - the Secure Act 2.0. This is legislation that has some implications for taxes in retirement, since it revises the rules for required minimum distributions and the way that Roth contributions can be made within a workplace retirement plan.
Click the player icon above to listen to the podcast. The program also can be found on Apple Podcasts and Stitcher.
Medicare now covers over-the-counter COVID-19 tests
Medicare is now providing up to eight free COVID-19 rapid tests for free. If you’re enrolled in Medicare Part B, just bring your Medicare card to a participating local pharmacy; tell the pharmacist you’re there for your free tests. It takes a minute to run through the paperwork, but it’s worth the wait. You can find more details on the Medicare website.
What I’m reading
Many of us want to age at home, but that option is fading fast . . . Inside a campaign to get Medicare to reverse course on a controversial new Alzheimer’s drug . . . How to tell if your financial adviser is overcharging you . . . How declining immigration hurts the nursing home labor force.
Subscribe at retirementrevised.substack.com
A couple weeks ago, this newsletter featured a PBS NewsHour story on the Great Retirement - the impact that early retirement forced by the pandemic has had on millions of older workers.
The story caught the eye of my friend Marc Miller - yes, you got that right, Marc Miller, although he spells his name with a C, not a K. Marc is a career coach who specializes in advising older workers, and he works with clients often who are struggling with unexpected job loss late in their careers. Since this is a topic I write about frequently, Marc invited me to join him on his podcast for a discussion.
I’m posting the resulting conversation today. Among the questions and issues we discussed:
Will older people who left the workforce early due to COVID-19 want to return after the pandemic? And, will they be able to do that?
What are the economic risks of premature retirement?
What the risks in relying on the recent booming stock market to fund extra years of retirement?
If you’re dealing with these issues, check out Marc’s work at Career Pivot. He moderates a very interesting online forum there for older workers, and you can find all of his podcasts and other online resources.
Click the player icon at the top of this post to listen to our conversation. The podcast also can be found on Apple Podcasts and Stitcher.
What I’m reading
A two-year experiment in changing how we work . . . Her husband wanted to die, and she heard his wishes . . . The Labor Department wants to investigate crypto in retirement plans . . . As President Biden proposed, Medicare needs the ability to negotiate drug prices . . . More employers are moving retirees to Medicare Advantage as they seek to reduce costs . . . New IRS rules on inherited IRAs force paster payouts . . . Generation X volunteers want to help you, and one day themselves, age at home . . . Meet the underdog of senior care . . . Corporate employers show a bit more interest in phased retirement programs.
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On this edition of the podcast, we’re going to talk about Medigap - one of the most important types of Medicare insurance, and perhaps one of the least understood.
For people enrolled in traditional Medicare, Medigap is used to cover out-of-pocket costs, and caps your total out-of-pocket liability.
Traditional Medicare offers much more flexibility in how you access care when compared with Medicare Advantage plans, which typically use managed-care provider networks. However, Advantage plans come with a built-in cap on out-of-pocket costs--a feature that you won’t find in traditional Medicare.
Some traditional Medicare enrollees receive supplemental gap insurance as a retirement benefit from their former employers to cover some of those out-of-pocket costs. And low-income seniors get help from Medicaid. But for everyone else, it's important to understand the ins and outs of Medigap--when to buy it, the plan options, and how to go about selecting a plan.
I spoke recently about Medigap plans with Bethany Cissell. Bethany is an expert on Medigap at Allsup, a company that provides fee-based assistance with Medicare plan selections. Fee-based help is one way you can get guidance on Medicare plan selections of all types. The most common choice is your State Health Insurance Assistance Program, or SHIP. These are free counseling services that you’ll find in every state, and I’ll provide a link alongside the podcast that can help you find yours.
I spoke with Bethany about the choice between traditional Medicare with a Medigap, versus Medicare Advantage. We also discussed all those notorious Medigap letter options you can choose, and how plans are priced.
Click on the player icon at the top of this post to listen to the interview. The podcast also can be found on Apple Podcasts and Stitcher.
More Medigap resources
How to evaluate Medigap coverage - my latest column for Morningstar.com.
Overview of Medigap plan options- a table created by the Medicare Rights Center.
Financial advisors step it up on Social Security tech
Financial advisors have long understood the importance of Social Security in their clients’ retirement plans. Now, an increasing number are using sophisticated strategies for optimizing those benefits and turning to software for help.
The trend is evident in the substantial increase in market penetration of Social Security optimization software, which jumped to 45% of advisors last year, up from 17% in 2020, according to the T3/Inside Information Advisory Software Survey. Some of that growth reflects Social Security features bundled into mainstream financial planning software, but use of stand-alone solutions is growing as well.
Learn more in my latest column for WealthManagement.com.
What I’m reading
Senior communities add tech assistance as a perk . . . The system still fails small 401(k) plans . . . Young women are saving for retirement sooner than previous generations.
Subscribe at retirementrevised.substack.com
Last week, Medicare announced the next phase of its plan to transform traditional Medicare. Critics argue that the planned transformation of the fee-for-service program will amount to a dramatic expansion of privatization.
And, if you are enrolled in traditional Medicare, or expect that you will be in the future know this: no matter if you want it or not, Medicare plans to enroll you in this new model by the end of this decade, as early as next year in some cases.
Millions of retirees have opted out of traditional Medicare over the past two decades. Instead, they have joined Medicare Advantage, which is a privatized, managed-care version of the program. But the choice between those two options might not be in their hands much longer.
Medicare has been quietly testing a new model for traditional fee-for-service Medicare. Medicare enters into contracts with healthcare provider groups that receive a flat annual payment to provide care for enrollees in the traditional program.
Up until this point, Medicare called the health care contractors involved in this experiment “Direct Contracting Entities,” but starting next year they will be known as Accountable Care Organizations, or ACOs.
The concept of ACOs is not new - many health care experts say they have the potential to improve health care by incenting healthcare providers to work together as teams. But this particular version of ACOs is drawing criticism from some health policy experts, who view it as unwarranted - and unwise - further privatization of Medicare.
The new model launching next year is called ACO REACH. The word REACH is an acronym, standing for Realizing Equity, Access, and Community Health. Medicare is pitching the program as a way to advance health equity for underserved communities. And that’s a very laudable goal. But ACO Reach providers actually will have much in common with Medicare Advantage, Like Advantage plans - which usually are HMOs or PPO plans - ACO Reach plans will create networks of preferred healthcare providers, and they can retain as profit the portion of the annual per-patient payments that are not spent on healthcare.
A big worry here is the rush of private equity firms and other investment groups into the business, which points to even more privatization of Medicare than we’ve seen already.
And here’s something important to know if you are enrolled in traditional Medicare, or expect that you will be in the future. Medicare plans to enroll everyone who uses traditional Medicare in an ACO by 2030. And starting next year, if you live in an area where a REACH ACO operates, you can be assigned to one without your consent.
This week on the podcast: Joining me on the program this week to talk about the REACH ACO model is Dr. Ed Weisbart. Ed is a family medicine practitioner. And he chairs the Missouri chapter of Physicians for a National Health Program, a national group of 21,000 physicians and other health professionals who support single-payer national health insurance. PNHP has taken a leading role in opposing Medicare’s ACO plans.
I’ve been really surprised that this topic hasn’t surfaced much in general media yet, considering its importance to millions of seniors. After Medicare announced its plans for ACOs last week, it seemed like a good idea to turn up the volume a bit.
Click the player icon at the top of this post to listen to the podcast. The podcast also can be found on Apple Podcasts and Stitcher.
Further reading on Medicare ACOs
A quiet experiment is testing further privatization of Medicare
Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 1: The Risk-Score Game.
Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 2: Building On The ACO Model
Biden Pursues Trump Plan That Creates Big Profits by Denying Health Care
Trump-era Medicare program under increased scrutiny
Physicians for a National Health Program - page of resources on ACO Reach.
What I’m reading
IRS releases long-awaited Secure Act RMD regulations . . . Medicare’s finances and the saga of the Alzheimer’s drug Aduhelm . . . The pandemic pummeled long-term care – it may not recover quickly.
Subscribe at retirementrevised.substack.com
If you’re wondering whatever happened to my podcast - wonder no more.
I put the program on hold last spring while I worked on the manuscript for my new book about retirement, which will be published in January 2022. I finished up the book just before Thanksgiving, - and this week the program is back. You can expect new episodes every so often this year.
Let’s kick it off with a conversation about career reinvention and retirement. My guest is Beverly Jones, author of the new book, Find Your Happy at Work: 50 Ways to Get Unstuck, Move Past Boredom and Discover Fulfillment.
Bev is an author, speaker, podcaster and career coach. She’s a master of career reinvention herself - she started out working in television in radio, and went on to earn and MBA and a law degree. You can catch her program, Jazzed About Work, wherever you get your podcasts.
Bev’s book explores ways to find meaning in your work. That’s a theme I’ve written about often, because I think it’s so important as a component of a successful retirement plan. The research tells us that many people wind up retiring earlier than they expected, either due to a job loss or health problem - but sometimes it’s just plain burnout.
I asked Bev to connect the dots between her findings about happiness on the job - and in retirement. Click the player icon above to listen to our conversation; you also can find it on Apple Podcasts and Stitcher.
Note: The show had been available on Spotify, but the Joe Rogan controversy prompted me to rethink that. Pulling my little podcast won’t matter even a bit to Spotify, but I’ll sleep better. By the way, anyone looking for a new streaming platform should consider Tidal’s Hi-Fi service. Your ears will thank you.
What I’m reading
43% of Americans over age 65 have not received a vaccine booster, far less than other developed countries . . . The 4% drawdown rule might not work . . . Use the Social Security mailing list to promote vaccines . . . Old age and creativity.
Subscribe at retirementrevised.substack.com
My guest on the podcast this week is a prominent exponent of a simple, straightforward approach to investing that emphasizes balance, diversification, discipline, low-costs, and a long-term orientation.
No surprise there - Jack Brennan is a former chief executive and board chair at Vanguard, which has come to dominate the world of consumer investing with its emphasis on those principals. Brennan remains involved at the company as chairman emeritus, and he is the author of a terrific new book, More Straight Talk on Investing.
Jack’s book offers excellent advice for investors of all ages, but I quizzed him about parts of the book most relevant to people nearing retirement or already retired. We discussed asset allocation, how to stay on track when things get rough, and why he believes strongly that retirees should have professional financial advice.
Listen to the podcast by clicking the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Guest post: Putting your investments in their place
This week I'm featuring a guest post on asset location from Bob French, CFA, the director of investment analysis at Retirement Researcher and McLean Asset Management. Bob will be holding a webinar covering the portfolio management process on Tuesday May 4th, and Wednesday May 5th. He'll be showing you how to keep your portfolio doing what you want it to do. You can sign up here.
Most people are leaving money on the table. For all the different ways that we try to optimize our investments, most people ignore their asset location – because they simply don’t know that it’s something they should be thinking about. But asset location is essentially free money just for being organized. Vanguard’s 2019 Advisor Alpha study found that asset location can add up to three quarters of a percent per year – again, just for being organized.
Asset location is about choosing which account you put your investments in to make the most out of the tax treatment of your different accounts. There are three different types of accounts: taxable, tax deferred, and tax exempt. We can use the differences in how they’re taxed to maximize our after tax returns.
Taxable accounts are things like your brokerage account, where you owe taxes on everything that happens in that year. Tax deferred accounts are your traditional IRAs and 401(k)s. These accounts don’t have the ongoing tax drag of a taxable account, but when you pull money out, you owe ordinary income taxes on that money. Tax exempt accounts, like your Roth IRA and 401(k) are, well, tax exempt. You don’t pay any ongoing taxes, and you don’t owe anything when you take your money out.
Your asset location should not drive your asset allocation. Your asset allocation is a strategic decision about how much risk (and return) you want to take. Your asset location is simply a tactical decision about how to implement your portfolio.
It’s also important to recognize that the benefits of asset location are dependent on the structure of your portfolio. If all of your money is in your traditional 401(k), there’s not much to do here – your money is where it is.
In practice, there are two general guidelines for your asset location. The first is that you want your tax inefficient investments – the ones that kick off a lot of distributions – in your tax deferred or tax exempt accounts. Those distributions would be a serious tax drag in your taxable account. The second is that you want your highest growth assets in your tax exempt account. You can think of the IRS as a silent partner in your taxable and tax deferred accounts, so they get some of the gains in those accounts. By keeping your highest return assets in your tax exempt accounts, you get to keep all of those gains.
The biggest upshot of implementing your asset location strategy is that you should try and get your bonds (especially TIPS – they have some nasty tax issues) into your tax deferred accounts, and then work from there.
If you want to find out more about asset location, or the other things you should be considering as you maintain your portfolio, sign up from my upcoming webinar, Managing Your Portfolio: the 6 Step Process to Maintaining the Portfolio You Designed on Tuesday May 4th, and Wednesday May 5th. You can register using this link.
Webinar: Tips for succeeding in the new world of work
“Businesses are planning for a future of less business travel, more automation and more people working from home," says a recent article in theWashington Post. What do changes like these mean for people over 50? According to Kerry Hannon and Marci Alboher, two of the nation's foremost authorities on opportunities for older workers, there are steps we can take to make this market work for us. In her upcoming book, Kerry says that people over 50 can "take control of their professional and economic future with hope, confidence and optimism."
In a May 20th fireside chat sponsored by the Encore Boston Network, Kerry and Marci will offer trends, tips and tactics about freelance and remote jobs, job search advice, self-employment and entrepreneurship and finding work you love. They will also discuss how to find your place in the increasingly diverse and multi-generational workforce and the role that mentoring plays in this next stage of encore work.
There’s a small fee to attend ($20 for non-members).
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Covid-19 had taken the lives of 182,000 people in nursing homes, assisted living and other long-term care facilities . . . one-third of the national total. The troubles have intensified a spotlight on long-running questions about how communities can do a better job supporting people who need care but want to live outside an institutional setting. That question generates a big list of challenges for communities, health care systems and policymakers.
I wrote about this topic in a story for the New York Times several weeks ago, and I’ve been following it up with a series of conversations on the podcast.
My guest this week is Peter Fitzgerald. Peter is executive vice president for policy and strategy at the National PACE Association. PACE stands for Programs of All-Inclusive Care for the Elderly. This is a unique, innovative program that recipes its funding from both Medicaid and Medicare.
PACE provides medical and social services that allow frail seniors to live independently. It serves about 55,000 people in 30 states around the country. Most are low income and eligible for both Medicare and Medicaid. PACE is available only in states that decide to offer it. But the program is poised for a possible dramatic expansion.
The American Rescue Act, passed by Congress in March, raises the federal share of states’ spending on home and community-based services by $12.7 billion over the coming year, and PACE is among the eligible programs. More recently, Senator Casey (D-PA) introduced legislation that aims specifically to expand PACE.
And the Biden administration’s proposed infrastructure plan includes a $400 billion expansion in Medicaid funding for home-based care. Some of that money could find its way to PACE programs. That would allow it to expand . . . not only in terms of the number of seniors served, but also beyond the primarily low-income population PACE serves now.
I asked Peter to explain how PACE works, and why it often is a superior option to institutional care. We also talked about the prospects for expansion.
If you’re interested in finding a PACE program where you live, check out the association’s online guide to programs around the country.
Listen to the podcast by clicking the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Medicare Out-of-Pocket Costs: How Do Enrollees Get Protection?
Medicare smooths out much of the variation in the healthcare expenses that seniors incur -- but out-of-pocket costs can be high if you’re not careful.
Most Medicare enrollees blunt out-of-pocket risk one way or another. According to new research by the Kaiser Family Foundation, 39% were enrolled in Medicare Advantage plans in 2018; these managed-care commercial alternatives to Original Medicare have built-in caps on out-of-pocket outlays. The rest are enrolled in traditional Medicare, which does not have a built-in out-of-pocket cap. Most of these enrollees get out-of-pocket protection from Medigap, retiree coverage or Medicaid.
But 10% of Medicare enrollees have no protection from this risk. They’re in traditional Medicare but have no supplemental coverage.
That is a worrisome finding. This year, an Original Medicare beneficiary without supplemental coverage is subject to a deductible of $1,484 for an inpatient hospitalization plus daily copayments for extended hospital and skilled nursing facility stays. There’s also a separate deductible of $203 plus 20% coinsurance for most physician and other outpatient services, including for drugs administered by physicians for cancer and other serious medical conditions.
Advantage plans, meanwhile, are required by law to cap annual out-of-pocket expenses: In 2020, the average cap was $4,925 for in-network services, according to Kaiser, while the cap for out-of-network services is much higher, at $8,828. In Original Medicare, the average out of pocket spending among traditional Medicare beneficiaries in 2018 was $6,150, according to unpublished Kaiser data. That figure includes premiums and out-of-pocket outlays for uncovered services (such as dental, vision, and hearing care).
Here’s a summary I put together summarizing Medicare’s out-of-pocket structure. As you can see, it’s quite a patchwork:
I explore the implications of this patchwork of out-of-pocket protections in my latest Morningstar column.
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This week on the podcast we take a look at the prospect of higher inflation, and how retirees would be impacted.
In March, the consumer price index recorded its largest 12-month increase since the summer of 2018, rising at a 2.6 percent annual pace. Some analysts think we might be entering a period of sustained higher inflation after many years when consumer prices stayed very steady. It’s not at all clear yet that this actually will happen. But if it does, that would mark a real change for retirees, who live on fixed incomes. Higher inflation would threaten to erode their standard of living.
My guest is Christine Benz, director of personal finance at Morningstar. Christine has posted two excellent articles on inflation and retirement in the past couple weeks. One focuses on implications for your portfolio withdrawal rate in the event of higher inflation; the other discusses inflation-fighting investment strategies.
I asked Christine to explain why concern about inflation is rising. We also discussed the major risks inflation poses for retirees, and some strategies that retirees can use to protect themselves from inflation risk.
Listen to the podcast by clicking the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
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Covid-19 had taken the lives of 181,000 people in nursing homes, assisted living and other long-term care facilities ….. one-third of the national total. The troubles have intensified a spotlight on long-running questions about how communities can do a better job supporting people who need care but want to live outside an institutional setting.
I explore these questions in a new New York Times Retiring column posted this weekend. I interviewed a couple dozen experts for the story in areas ranging from health care to housing, urban planning and health care. I’m planning a series of podcast follow-ups to dive deeper into different aspects of the story.
My podcast guest this week is one of those experts. Anne Tumlinson is one of the nation’s top authorities in public policy on caregiving, having worked for years on Capitol Hill and in the private sector as an analyst, researcher and consultant. She is the founder of ATI Advisory, a Washington, D.C.-based research and advisory services firm that works to reform health and long-term care delivery and financing for the nation’s frail and vulnerable older adults.
But she also is the founder of Daughterhood.org, a fascinating national network of support circles for caregivers. Earlier in her career, Anne worked as a healthcare advisor to the late Congressman John Lewis (D-GA), and then as the lead for Medicaid program oversight at the Office of Management and Budget.
I asked Anne for her thoughts on the challenges people face when they need to make caregiving decisions for loved ones, most often on short timelines and without adequate preparation or knowledge — and, how that affects the choices that need to be made between institutional and home-based care.
Listen to the podcast by clicking the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Biden’s big bet on expansion of home-based care
My New York Times column notes that the recently-approved American Rescue Act contains a very large ($12.7 billion) increase in federal spending on home and community-based services through the Medicaid program. Moreover, the $2 trillion infrastructure plan proposed by the Administration this week includes an addition $400 billion over eight years to bolster long-term care outside of institutional settings.
Howard Gleckman notes in a Forbes.com post that this latest proposal is an important step forward - but that it does nott address the nation’s broader long-term care problems:
It focuses on only one piece the puzzle—Medicaid HCBS. And it still won’t provide sufficient services for many older adults and younger people with disabilities who rely on Medicaid for their care. It doesn’t boost funding for a long list of non-Medicaid federal programs that are critical to those living at home. And it does nothing at all for middle-income Americans who are unable to pay for long-term care insurance but are not poor enough to qualify for Medicaid.
The rest of the Washington agenda on retirement
Congress recently rescued the retirements of more than 1 million workers who faced the prospect that the pensions they earned and had been promised might evaporate. The American Rescue Act allocated $86 billion for grants to struggling multiemployer pension funds that would allow them to continue paying full benefits. The law authorizes the Pension Benefit Guaranty Corporation (PBGC) to make the grants, which do not need to be repaid.
The generosity of the move came as a surprise. Previously, Democrats had been pushing a package of low-interest loans to aid the multiemployer funds, while Republicans wanted to boost insurance premiums paid by employers, add new premiums paid by plan participants, and force more conservative accounting assumptions.
But the Democratic majority is looking at things a bit differently this year. And so long as Congress is casting a benign eye on the well-being of these pensioners, I have a short list of other “must-do” retirement items for the consideration of lawmakers. And these are reforms that will impact a much larger - and more demographically diverse - group of retirees now and in the years ahead than the multiemployer plan fix.
My list includes:
Expansion of Social Security
Reduction of the Medicare eligibility age
Fixing long-term care insurance
Building affordable senior housing
Learn more in my Reuters column this week.
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This week on the podcast, we consider the most urgent retirement-related issue facing the new Biden administration and Congress: Medicare’s solvency problem.
The problem has to do with just one part of Medicare - Part A. That’s the Hospital Insurance Trust Fund, which pays for hospital bills. Unlike other parts of Medicare, Part A is funded mainly through the Medicare payroll tax; parts B and D are financed through a combination of general government revenue and premiums paid by beneficiaries.
The Medicare trustees projected last year that Part A will become insolvent in 2024 — less than three years from now. Just last week, the Congressional Budget Office forecast a somewhat longer insolvency date due to an improving economic outlook - 2026. But we’ll have to wait to see what the Medicare trustees have to say a bit later this year - they don’t always agree with the CBO projections.
Joining me on the podcast to talk about Medicare solvency is Dr. Gretchen Jacobson. Gretchen is vice president for Medicare at The Commonwealth Fund, a foundation that focuses on health care. She’s a top expert on Medicare, holding a Ph.D. in health economics, and having also worked for a number of years on Medicare policy at the Kaiser Family Foundation before joining Commonwealth.
Commonwealth recently published a really interesting series of blog posts by Medicare experts outlining proposals to solve the Part A problem, which I recommend. For this conversation, I asked Gretchen to walk us through all the options for fixing Medicare’s finances.
And a note for listeners: I taped this interview before the CBO projection was issued - so the context of our conversation is a 2024 insolvency date.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Here’s my recent Reuters column on Part A solvency.
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When it comes to “getting what’s yours,” Philip Moeller is the man.
Phil is the principal author of the Get What’s Yours series of consumer guides, which already includes best-sellers on Social Security and Medicare. His latest book was published this week, titled Get What’s Yours for Health Care: How to Get the Best Care at the Right Price. The theme of this volume: consumers have the power to fight back when it comes to health insurance and the health care system.
Close readers know that I’m a skeptic when it comes to the value of consumerism in health care. But I respect Phil’s work tremendously and he is among the most knowledgeable writers I know on Social Security and Medicare - so a podcast chat about the new book seemed in order.
On this week’s program, Phil and I discuss the concept of consumerism in health care, and the key barriers people face navigating the system. We also explore related issues in Medicare, including the challenges of shopping insurance marketplaces and the complexities of transitioning to Medicare from other forms of health insurance.
Along with his books, Phil has written about Social Security, Medicare and other retirement issues for the PBS NewsHour in his “Ask Phil” column. He also has been a research fellow for the Center on Aging & Work at Boston College. Phil is a former contributor to Money magazine and U.S. News & World Report. His blog can be found here.
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This is the last newsletter and podcast of the year, and with the holidays upon us, I thought it would be fun to wrap up with something a little different and uplifting, after the awful year that was 2020.
So - how about a little holiday music from the country’s largest choral group for singers over age 55?
Encore Creativity is the nation's largest choral organization for older adults. Based in Maryland, Encore has 15 chorales and six rock and roll choruses in the metropolitan Baltimore-Washington area, as well as a chorale in New York City.
The organization is led by Jeanne Kelly, a professional vocalist, performer, teacher, conductor and music administrator who started the group in 2001. Encore got its start when Jeanne was approached by Dr. Gene Cohen, the well-known pioneer researcher on creativity and older adults. Cohen, who died in 2009, was a founder of the national movement around positive aging, and he argued against the old stereotypes that aging leads to an inevitable decline in physical and mental capacity.
Cohen wanted Jeanne to start a choral group for older people as part of a landmark research project he was conducting. It would examine how older adults would be affected if they had the chance to study choral music under a professional conductor. So Jeane agreed to start a group.
The study found a wide array of positive effects - better physical health, fewer doctor visits, less use of medication and fewer falls. And the singers reported better morale and less loneliness.
One thing led to another, and Jeanne Kelly is still at it today. Encore Creativity has grown tremendously over the years, with around 800 singers participating in more than 20 programs. Most of them are up and down the east coast, but there are some affiliated programs elsewhere. These are no-audition groups - everyone is welcome - which is amazing considering the quality you will hear in the music on the podcast.
This year, of course, the pandemic forced Encore to adapt - all of its programs went virtual, which presented some challenges. But their work is coming to fruition with the group’s first virtual holiday concert, which Encore produced along with AARP. That debuts this evening - December 17th at Encore’s website. But it will be available on demand throughout the holidays at that web address.
On the podcast, you’ll hear excerpts from Encore’s 2019 Kennedy Center performance. I hope you’ll give it a listen - and tune in to the entire program tonight or during the holidays.
Listen to the podcast by clicking the player icon above; the podcast also can be found on Apple Podcasts, Spotify and Stitcher.
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Six Social Security fixes that should be on Biden’s agenda
President-elect Joe Biden will be plenty busy battling the pandemic when he takes office next month, and Social Security will likely not be on top of his agenda. But nudging higher reforms for Social Security, our most important retirement program, would be a very smart move.
The role of this safety net program has never been more important as the country attempts to dig out from the COVID-19 disaster. In my new Reuters column, I list six Social Security moves the new president and Congress should make.
The vaccines
Medicare will cover the cost of all FDA-approved vaccines. All Americans — whether they get their health care from Medicare, Medicaid or private insurance, or they do not have coverage — will be able to get a COVID-19 vaccine at no cost, under federal rules.
Vaccine rollout in nursing homes faces obstacles and confusion. Walgreens and CVS staff will soon begin vaccinations at tens of thousands of long-term care facilities. Some staff and residents are wary, and there are thorny issues of consent.
Trials went well, but reassuring older adults remains a challenge. The two leading coronavirus vaccines seemed to work well in elderly trial volunteers. “I just can’t understand why people are afraid,” one 95-year-old said.
Should you be worried about allergy problems? British health officials recommended that people with severe allergy reactions not be given the vaccine. Such reactions to vaccines are rare, even in people who have allergies to food or bee stings.
Facebook has overhauled its approach to harmful Covid-19 health misinformation, announcing major changes that would send a much stronger message to users who have interacted with harmful falsehoods about the virus.
Retirement security, women and COVID
Researching my recent story for The New York Times on how retirement security for women is impacted by COVID, I discovered MomsTown, a very interesting network for women that has launched a series of daily podcasts. The latest episode features RISE, a scholarship program committed to accelerating equity for moms of color. Check it out here.
Recommended reading
The Labor Department completed the Trump administration’s fiduciary rule for retirement accounts, but it likely will be revised by the new administration . . . Trump’s $200 Medicare discount card may soon be in the mail . . . How Biden could help older workers . . . Nobel laureate Robert Merton on annuities, reverse mortgages and the key design principles of good retirement . . . Scientists reassess the need for routine medical care . . . 2020 was especially deadly, and COVID wasn’t the only culprit . . . Pandemic delays regulations regarding cheaper hearing aids . . . Improving your balance to prevent falls . . . To get a good night’s sleep, you may need to make different dietary choices . . . Six predictions for retirement planning in 2021 . . . Who is to blame for the 100,000 COVID deaths in nursing homes?
Next newsletter on January 7th
The newsletter heads off now for some winter quarrantined R&R. I’ll be back with you on January 7th. Until then, I hope you have peaceful, COVID-safe holidays.
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Listen now (33 min) | This week on the podcast, we consider the sorry state of affairs in the world of long-term care. The U.S. has never had good answers when it comes to insuring against the risk of a long-term care need. And now, the pandemic is raising the stakes. Costs are rising for everything from assisted living to skilled nursing facilities and home-based care. Meanwhile, the pandemic has taken the lives of more than 100,000 residents and staff of long-term care facilities.
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Healthcare costs are rising at several times the rate of general inflation, and it’s one of the major financial challenges that retirees face as they struggle to maintain their standard of living. Nowhere is this more clear than in the annual interplay between the Social Security cost-of-living adjustment (COLA) and Medicare Part B premiums.
Last month, Social Security announced a 1.3% COLA for 2021. That’s a very meager increase, but it looks worse following Medicare’s announcement last week that the monthly standard Part B premium will rise $3.90, to $148.50. If you’re enrolled in both Social Security and Medicare, the Part B premium is deducted from your benefit, so its interplay with the COLA is important.
The impact varies depending on your Social Security benefit amount, as the chart below shows. For people with very low benefits, Medicare eats up most or all of the COLA; in cases where the Part B hike would be larger than the COLA, the Social Security benefit is unchanged due to the “hold harmless” provision in federal law, which prohibits any decrease in benefits.
This year’s Part B premium was on track to rise much more than $3.90 per month, but a COVID relief measure passed by Congress recently capped the increase at 25% of whatever it would have been if Medicare simply followed the usual formula.
Joining me on the podcast this week to walk through the changes for 2021 is Mary Johnson. Mary is the Social Security and Medicare policy analyst for The Senior Citizens League; she’s been tracking the COLA for more than 25 years, and knows this topic inside and out.
Mary points out that we’re really in an unprecedented situation with regard to COLAs. Over the past decade, we’ve had zero COLAs three times, and one year where the increase was just three-tenths of a percentage points. Over a 12-year period, the COLA has averaged just 1.4%. “Twelve years is about one-third of the length of time a person spend in retirement,” she says, “So that is having a significant impact on the lifetime retirement benefits you receive from Social Security.”
Listen to the podcast by clicking the player icon above. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
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Medicare marketplaces really don’t work very well
Every fall, you get the barrage of messages. It starts with the Annual Notice of Change document that Medicare sends, listing the changes in your current Part D or Advantage plan coverage. Then there’s the “Medicare & You” handbook containing detailed information about plan options. A flurry of email alerts urging you to shop your coverage using the Medicare Plan Finder website also go out each fall.
Insurance companies flood the airwaves and mailboxes with advertisements and brochures. Journalists like me nag you about this with our columns and newsletters!
None of it is working very well. A new study by the Kaiser Family Foundation finds that 57 percent of Medicare enrollees don’t review or compare their coverage options annually, including 46 percent who “never” or “rarely” revisited their plans. Strikingly, two-thirds of beneficiaries 85 or older don’t review their coverage annually, and up to 33 percent of this age group say they never do. People in poor health, or with low income or education levels, are also much less likely to shop.
Why? Tricia Neuman, a co-author of the Kaiser report, sums it up:
“A large share of the Medicare population finds this whole task pretty unappealing, and they just don’t do it. That raises questions about how well the system is working.”
If you’re enrolled only in Original Medicare with a Medigap supplemental plan, and don’t use a drug plan, there’s no need to re-evaluate your coverage. But Part D drug plans should be reviewed annually. The same applies to Advantage plans, which often wrap in prescription coverage and can make changes to their rosters of in-network health care providers. Plans can change the monthly premium as well as the list of covered drugs - and they can change the rules around your access to drugs, or impose quantity limits or require prior authorizations.
The findings call into question just how well privatization of Medicare is working - if you don’t have willing, tuned-in buyers, how well can a marketplace really work?
I explore that question in my latest Retiring column for The New York Times, which was published today.
Along with the column, here are a few more thoughts on this topic:
Medicare has not always been this way: At its creation in 1965, Medicare was envisioned as a pure social insurance program, with everyone paying in the same amounts and receiving the same coverage. But with the expansion of drug coverage in 2003 and the rapid growth of Medicare Advantage, we’re headed toward a system of marketplaces with the original program increasingly looking like a public option. Advantage is projected to account for 64% of enrollment by 2028, according to Avalere Health:
A different approach is possible: A standard benefit in Medicare, funded through premiums and payroll taxes, would work just fine - especially if we change the law to permit the federal government to negotiate drug prices, just as the VA and Medicaid can do. That’s prohibited under the law that created Part D. What sense does that make?
Human behaviorand choice: The Medicare marketplace is a key example of the choice-driven ideology that has driven so much of our retirement system over the past four decades. We have shifted decision making and risk from the sponsors of benefit plans to participants - the poster child being the move from defined benefit pensions to defined contribution 401(k) plans. We know how well that is working - 401(k) account balances are concentrated among the wealthiest households, participation is flat and the decline of DB pensions has taken a huge bite from overall retirement security (see my write-up of the latest Federal Reserve data on retirement saving accounts in this recent newsletter edition).
All of these systems are wrapped up in ideology about competition and consumer choice. When will we wise up? It’s been proven over and over again that the best way to deliver retirement security to the majority of households is through our social insurance programs, so let’s beef them up, make them less complicated and as universal as possible.
Still time to shop this year
Here’s my last reminder of the year to revisit your Part D or Advantage coverage this fall. There’s still time - enrollment runs until December 7th.
Get assistance from your local State Health Insurance Assistance Program, the federally funded counseling service that provides free one-on-one assistance in every state; (use this link to find yours.)
The Medicare Rights Center offers a free consumer help line: (800-333-4114.)
You can browse plans on the Medicare Plan Finder, the official government website that posts stand-alone prescription drug and Medicare Advantage plan offerings. The plan finder now allows users to sort plans not only by premiums but for total costs, including premiums, deductibles, co-pays and coinsurance payments.
When it comes time to enroll, call Medicare to sign up at 800-MEDICARE (800-633-4227) and to ensure that your enrollment has been processed.
Social Security and retirement timing in the age of COVID: My discussion with Jean Chatzky on Facebook Live
Personal finance guru Jean Chatzky invited me to join her this week on Facebook Live to talk about Social Security, retirement timing and the pandemic. Jean conducts a great interview, and we spoke at length about how COVID-19 has impacted retirement planning, and altered Social Security claiming - you can listen to a replay here.
Join me for a panel discussion on the future of retirement
I’ll be joining a panel discussion next week on the pandemic’s impact on the outlook for retirement within workplace plans a bit later this month, moderated by my Reuters colleague Lauren Young. Also on the panel are Christine Benz of Morningstar, economist Teresa Ghilarducci, Kedra Newsom Reeves of Boston Consulting and Harry Dalessio from Prudential Retirement.
The session will be convened on Monday November 16th at 1pm eastern time. Registration is free, and the conversation will be provocative, so please join us (register here).
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This week on the podcast, we take a look at how financial planning for retirement may change as a result of the pandemic. I invited Christine Benz of Morningstar to join me for this discussion after she published a thought-provoking essay on this question on the Morningstar website.
Christine is Morningstar’s director of personal finance, and she is one of the country’s top researchers and writers on personal finance and planning. From her vantage point at Morningstar, she has access to a wealth of top-notch analysis, research and data on investing, saving and other aspects of planning.
Christine thinks the pandemic has produced a sudden - and significant - shift in how individuals think about spending and saving goals, the possibility of an unplanned early retirement, setting aside liquid emergency funds, paying for health care and dealing with the current low yield environment for fixed income investments.
Listen to the podcast by clicking the player icon at the top of the page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
This week on the podcast, we take a look at how financial planning for retirement may change as a result of the pandemic. I invited Christine Benz of Morningstar to join me for this discussion after she published a thought-provoking essay on this question on the Morningstar website.
Christine is Morningstar’s director of personal finance, and she is one of the country’s top researchers and writers on personal finance and planning. From her vantage point at Morningstar, she has access to a wealth of top-notch analysis, research and data on investing, saving and other aspects of planning.
Christine thinks the pandemic has produced a sudden - and significant - shift in how individuals think about spending and saving goals, the possibility of an unplanned early retirement, setting aside liquid emergency funds, paying for health care and dealing with the current low yield environment for fixed income investments.
Listen to the podcast by clicking the player icon at the top of the page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers receive the full edition of the newsletter (the free version is abridged), and they have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Older volunteers forge new pathways in the pandemic
Volunteers are the lifeblood of nonprofit organizations, but the pandemic has created major barriers to participation, especially for older people, who face a higher risk of serious illness or death if they contract the coronavirus. As a result, nonprofit organizations and volunteers are grappling with the challenge of finding new, safe ways to engage with older volunteers. Learn more in my latest story for The New York Times. Be sure to check out the comments on the story, available via a link at the bottom of the article if you are viewing it in a web browser and logged on to the site.
The story is part of a broader section on retirement that the Times published online this month - you'll find several other interesting stories on topics like entrepreneurship in retirement, where retirement is headed in the pandemic and more.
Open enrollment: Original Medicare or Advantage?
Medicare’s open enrollment season is underway, and a key decision point is whether to use Original Medicare or Medicare Advantage. Premium newsletter subscribers can review my guide to choosing between Original Medicare and Medicare Advantage here.
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Every fall, you have an opportunity to review your Medicare coverage during the open enrollment season that runs from Oct. 15 through Dec. 7.
This is the only chance most enrollees get to switch between original fee-for-service Medicare and Medicare Advantage, the all-in-one managed care alternative to the traditional program. You also can re-evaluate your prescription drug coverage — whether that is a stand-alone Part D plan, or wrapped into an Advantage plan. It’s a good opportunity to make sure you’re getting the coverage best suited to your health care needs, and perhaps to save some money on premiums and other out-of-pocket costs.
Joining me this week on the podcast this week to discuss fall enrollment is one of the nation’s top Medicare consumer advocates - Frederic Riccardi, president of the Medicare Rights Center. I asked Fred to talk about why the fall enrollment is so important for Medicare enrollees, how to reevaluate your prescription drug or Medicare Advantage coverage and the recent trends in plan offerings. I also got Fred’s tip on the smartest way to select coverage.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Also check out my Morningstar column this week on fall enrollment.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
How fees impact your retirement savings over time
Investment fees often don’t sound like much - what’s a 1% annual fee, after all, considering all the great returns you’ll be earning. Butthis thinking is dangerous. Compound interest works in your favor on the investment side of the equation - and works just as powerfully on the expense side. Fees compound over time, hindering growth and accumulated saving.
Pew Trusts built this nifty calculator that allows you to run scenarios on your own accounts. Get your most recent statement out and give it a whirl - and consider whether you could do better by slashing your fees (translation: low-cost passive index funds or ETFs).
Open enrollment: Original Medicare or Advantage?
Medicare’s open enrollment season is underway, and a key decision point is whether to use Original Medicare or Medicare Advantage. Premium newsletter subscribers can review my guide to choosing between Original Medicare and Medicare Advantage here.
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This week on the podcast, I examine Democratic presidential candidate Joe Biden’s plan to reform Social Security, with the help of economist Richard Johnson of the Urban Institute.
Rich is the co-author of a new Urban Institute report on Biden’s plans for both Social Security and Supplemental Security Income, which provides cash benefits to low-income older adults and people with disabilities. The report relies on DYNASIM, a sophisticated economic model that the Urban Institute has been using since the 1970s to projects the size and characteristics of the U.S. population 75 years into the future.
Why focus only on the Biden plan, and not President Trump’s? You could well ask that about Johnson’s analysis - or about this podcast. And the answer is simple - there is no Trump campaign plan for Social Security. So before we get into the Biden plan, I want to offer a few thoughts on what it’s been like to cover retirement policy in what I think it’s fair to call a very asymmetrical election year.
The Trump campaign hasn’t offered up detailed policy ideas on Social Security, or really, much of anything else. There’s no GOP platform either - something that typically comes out of a political party’s convention. We do know the history of Republican legislative proposals on Social Security. They typically call for restoring the program’s long-range financial balance by cutting benefits via higher retirement ages, less generous cost of living adjustments. But there’s nothing on the table right now to consider.
Frankly, I find any effort to make side-by-side comparisons of these two candidates to be a disservice to readers, because it implies that we’re dealing with two normal candidates who can be covered using traditional journalistic methods and tools. But there’s nothing normal about this situation - only one of the two major party candidates does normal stuff - like, proposing ideas and policies. So, on Social Security, I’m just telling you - there’s only one actual plan to cover, and it’s the Biden plan.
And Social Security does need reform. The combined retirement and disability trust funds are on track to be exhausted in 2035 - and probably a bit sooner than that due to the pandemic. Exhaustion means there would be sufficient revenue coming in to pay only about 80 percent of promised benefits. At the same time, most Democrats and all progressives believe benefits should be expanded to improve their adequacy - that is, replace more pre-retirement income to help low and middle class retirees maintain their standard of living in retirement.
Biden has offered up a balanced plan that addresses both of these challenges. In a typical Biden approach, his plan is moderate. It doesn’t go as far as the party’s left wing would like, but it marks a shift from where Biden - and most other centrist Democrats - have stood on Social Security over the last decade. Notably, Biden’s plan is much more detailed than the typical policy offerings from presidential candidates - as you’ll learn from my conversation with Rich Johnson.
Listen to the podcast by clicking the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Social Security awards a 1.3% COLA for 2021
Seniors will receive a 1.3% cost-of-living adjustment (COLA) in their Social Security benefit next year, the Social Security Administration announced. That’s a $20 monthly raise for the typical beneficiary, to about nearly $1,540.
That’s a small increase by historical standards, and it may be smaller still for many after Medicare’s Part B premium hike is netted out. We won’t have a final Part B increase amount until sometime in November, and each enrollee’s final Social Security adjustment will vary accordingly. Social Security will mail COLA notices in December that spells out your net increase. Let’s hope those arrive in a timely manner, since, you know - the Postal Service.
This year, Congress has capped the Part B increase at 25% of whatever the increase would have been - so that should help somewhat.
The maximum income subject to FICA taxes will increase to $142,800 in 2021 (from $137,700 this year).
I’ll have full analysis of this next month, after the Medicare figures become available.
Open enrollment: Original Medicare or Advantage?
Medicare’s open enrollment season begins today, and runs through December 7th. I’ll have analysis soon on the market for prescription drug and Medicare Advantage offerings for next year soon, but just a couple quick points for now:
Review your options. Consider how you will receive Medicare benefits in the year ahead, because fall enrollment is the time when most people will be able to make changes.
If you have Original Medicare and a Medigap and are happy with your coverage, there’s no need to makea change.
If you have a Medicare Advantage or Part D plan, review your coverage options even if you are happy with your current coverage; plans change their pricing and benefits every year.
Read the Annual Notice of Change (ANOC) that Medicare sent to you in September (via mail or email). This lists the changes in your current plan, such as the premium and copays, and will compare the benefits in 2021 with those in 2020.
Premium newsletter subscribers can review my guide to choosing between Original Medicare and Medicare Advantage here.
Timing your retirement
Roughly one-third of workers retire earlier than plan, research shows. The most common causes for unexpected early retirement are health problems and job loss. More Americans are planning to work longer to improve their retirement outlook; in this guide we consider those benefits, and ways to manage late-career work in ways that will help you stay in control of your retirement timeline.
Click here to download my guide to timing your retirement (subscribers only).
Choosing your Medicare coverage
Original Medicare, or Medicare Advantage?
This is the most basic decision you’ll make about health insurance at the point of retirement.
If you opt not to join Original Medicare at that time, you forego the preexisting condition protections offered in Medigap supplemental policies. Medicare Advantage can save you money on premiums, but Original Medicare remains the gold standard for its flexible access to providers and predictability of total costs over your lifetime.
Click here to download my guide to choosing Medicare coverage (subscribers only).
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This week, the podcast revisits a topic I wrote about for The New York Times last month - race and retirement. I’ve written before about how the inequities people of color experience during their working lives spill over into retirement. But during this time of racial reckoning, I wanted to take a deeper dive into the topic.
For the Times story, I took special care to seek out the voices of Black Americans who also are expert on this topic. That’s how I found my way to economist Darrick Hamilton. Professor Hamilton is one of the nation’s leading voices on the causes and consequences of racial and ethnic economic disparities. He recently left Ohio State University to rejoin The New School in New York City, where he is teaching and starting up a new Institute for the Study of Race, Stratification and Political Economy.
Darrick is a leading proponent of one of the most creative ideas for addressing the racial wealth gap - “baby bonds.” The idea is to provide every American child with a government-funded trust account at birth, starting with a $1,000 contribution. Kids born into lower-wealth families would receive more contributions over time, and the accounts would benefit from compound interest growth.
The premise is that much of the wealth in the U.S. is transferred from generation to generation, and there’s a powerful compound effect that starts with our legacy of racist laws and policies and ends with today’s white households able to access far more capital for wealth-building activities - attending college, buying a home or starting a business. Baby bonds could serve as a proactive remedy for that injustice, and in many cases could impact the wealth available at retirement for people of color.
In the Times story, I outline the basic numbers on race and retirement. They may not be surprising, but they certainly are appalling.
In 2016, the typical Black household approaching retirement had 46 percent of the retirement wealth of the typical white household. For a Latino family, it was 49 percent. Two-thirds of single black retirees have incomes too low to meet basic living expenses.
And that was before the pandemic. Since COVID19 struck, unemployment rates for older Black and Latino workers have been much higher than for their white counterparts. And mounting evidence suggestions that millions are being forced into premature retirement. That’s going to translate into sharp cuts in Social Security income and savings, and expensive disruptions in health insurance.
The baby bonds concept has caught on in the Democratic party - Senator Cory Booker advocated for it during his presidential campaign and he has sponsored baby bond legislation in the Senate. The idea also has found its way into the Biden presidential campaign.
Listen to my conversation with Darrick Hamilton by clicking on the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Will FICA revenue deferral open the door to privatization of Social Security? Here’s how it could play out
I've been writing over the summer about the threat posed to Social Security by President Trump’s threat to continue deferring FICA tax collections should he win reelection. This has been a chaotic episode, with shifting indications from the White House on how a FICA revenue gap might be plugged. And most employers seem to be ignoring the deferral altogether as not worth the bother, and are continuing to collect FICA. Even the U.S. Chamber of Commerce - a staunch Trump ally - has expressed disapproval.
Trump signed a presidential memorandum in August ordering the deferral through year-end of FICA revenue, and he also said that he would push for termination altogether of the tax if he wins a second term. It’s not at all clear that he could push this through Congress, but some experts think that the IRS code might permit him to defer FICA collections for an additional year.
If we do stop funding Social Security through FICA, just about anything can happen. The concept of an earned benefit can go out the window pretty quick, and people will start thinking of Social Security as welfare.
In the political back and forth over FICA, the Trump administration has stated that any deferred FICA revenue would be replaced by general revenue funds. But that suggests a transfer of more than $1 trillion annually - a tall order for a Congress already grappling with the demands of economic support for a flagging economy.
It also would mark a turning point in Social Security’s funding structure. The program has always been funded mainly by FICA (it also receives relatively small amounts of revenue from taxes on benefits and interest on trust fund bonds.). Self-funding has been one of the program’s political strengths, as it gives workers and beneficiaries a sense of ownership - as per this oft-quoted 1941 quip from President Franklin Roosevelt:
“We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”
Some Republicans have not given up on the dream of converting Social Security into a system of personal saving accounts - an anchoring idea of the reforms proposed by President George W. Bush. The plan was a political and policy flop, but some on the right continue to push it, including the Heritage Foundation.
If you doubt this, check out this recent op-ed on FICA by Andrew Biggs of the American Enterprise Institute (emphasis added at the conclusion of this passage):
. . . President Trump made clear in an Aug. 12 news conference that his real goal is to replace the Social Security payroll tax with revenues drawn from the general tax fund, the vast majority of which is income taxes. This idea faces both practical and philosophical hurdles, but could help the political parties finally come together to fix Social Security.
The first problem with funding Social Security via income taxes is obvious: the federal budget is already in deficit, which means there isn’t room to fund Social Security with general revenues without significantly cutting other programs or raising income taxes. And that tax increase wouldn’t be tiny. In 2019, the federal government collected about $1.7 trillion in individual income taxes, versus nearly $1 trillion in Social Security payroll taxes. Even if the President’s plan would replace only the employees’ 6.2% payroll tax, that would mean about an additional $500 billion in general tax revenues needed.
Moreover, funding Social Security with income taxes is also contrary to the program’s history, in which benefit were funded with a flatrate tax that applied to all earnings up to a maximum, which is currently $137,700 per year. The payroll tax contributed to the view that Social Security is an “earned benefit” rather than a welfare plan.
But most Democrats have already given up on the idea of truly earned benefits, since their Social Security proposals focus on lifting the payroll tax cap and making the rich carry more of the load.
Income-tax financing would simply take that idea in a more progressive direction. While about 15% of earnings accrue to employees with salaries above the $137,700 payroll tax ceiling, almost half of total income taxes are paid by households with incomes above that level. More than one-third of income taxes are paid by the top 1% alone.
But what is in it for Republicans? The answer is that an income-tax-financed safety retirement net need not be nearly as expensive as the current Social Security program. For instance, Australia’s Age Pension costs around one-fifth of what Social Security does, because it merely supplements households’ own savings to ensure a minimum standard of living in retirement. Canada and New Zealand also use income tax-financed programs to provide a strong base of retirement income.
For this idea to work, though, the U.S. would need to follow Australia’s lead by signing up every worker for a retirement savings account with automatic contributions. Those contributions could be funded using the payroll taxes that no longer would be needed to fund Social Security.
Biggs was a deputy commissioner of Social Security during the Bush administration and he was involved in the aforementioned failed effort to convert Social Security into a system of private savings accounts. He hasn’t talked much about privatization in recent years - until now, that is:
Once transitioned into place — which admittedly would take years — the result would be higher private savings, particularly for lower-income households, which reduces wealth inequality and boosts the economy. And while income taxes would be higher, total government spending on Social Security would be lower.
To be clear, this is my plan, not President Trump’s. But for income tax-funding of Social Security to work, for it to overcome 30 years of Congressional inaction on Social Security, it needs to think creatively and offer something to both sides. Because the traditional menu of reforms — payroll tax rate increases, higher retirement ages, lower cost-of-living adjustments and so forth — haven’t motivated Congress to action.
Joe Biden has been hammering Trump on the FICA issue in television ads running in swing states. We are living in a very weird world, indeed, when the chief actuary of Social Security is quoted in a political ad.
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The recession is likely to prompt more people to claim Social Security early if they are forced to retire sooner than expected. But what else influences claiming decisions?
My guest on the podcast this week is Shai Akabas, director of economic policy at the the Bipartisan Policy Center (BPC). He is the co-author of a new study that examines the broader environment in which claiming decisions are made - and it finds that better information, descriptive language and policy incentives could all nudge people toward making more optimal Social Security strategies.
One thing I appreciate about this study is the way it defines “optimal.” It moves beyond the question of the total lifetime benefit a claimant will receive from Social Security, or “break-even” point analysis. That approach tends to push people toward earlier claiming, research has found, because it frames later claiming as a gamble on living longer than average - in other words, beating the longevity odds. Most people have trouble imagining themselves living longer than average lives, especially at younger ages. But the mortality data tells us that many will, and that for married couples chances are good that one spouse will survive to very old age.
Rather, BPC considered a range of holistic questions claimants should consider:
Does your decision provide enough longevity insurance in case you outlive the rest of your savings?
What is the need for money right now, instead of later?
Will my decision impact my surviving spouse?
Click on the player icon at the top of the newsletter to listen to my conversation with Shai. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Disclose wrongdoing? Not all financial planners are complying with the new SEC rules
Millions of investors are now receiving a new government-mandated disclosure form from their financial planners that requires them to list any past misdeeds that have led to regulatory fines or worse. But a terrific Wall Street Journal investigation finds that a sizeable number are not complying.
The Securities and Exchange Commission’s new “Regulation Best Interest” relies heavily on a disclosure form that aims to give investors an easy way to evaluate financial advisers. The form provides information on fees, misconduct and conflicts of interest. It’s called a “customer or client relationship summary” or Form CRS. The disclosures are important, since there is a long and ugly history of abuse of investors by brokers with unethical track records.
The WSJ examined disclosures from thousands of firms, comparing them with the disclosure information on the SEC website:
At least 1,300 brokerage and financial-advisory firms incorrectly stated on the new document that neither they nor their financial professionals had legal or disciplinary histories, the Journal’s analysis showed. That is about 20% of the roughly 6,200 firms in the analysis that reported they had no past blemishes.
Reg BI is a weak rule, plain and simple. We are living in a buyer-beware environment where it is absolutely critical to do your homework before hiring an advisor (or perhaps, firing one). Don’t work with anyone who is not a fiduciary. And, you can look up any adviser’s record on the SEC website.
Recommended reading this week
Bill Bengen revisits the famous 4% drawdown rule . . . How to factor in climate change into a retirement relocation decision . . . Time to get comfortable with the idea of professional decline . . . AARP thinks the 2021 Social Security COLA will be somewhere between 0.5 percent and 1% for 2021 . . . How Social Security could come to a screeching halt . . . Why postal service disruptions can be life-threatening . . . Why dizziness can be a big problem as we age.
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Not going broke in retirement - that sounds like a good plan to me! So this week on the podcast, we’ll hear from the author of a new book outlining the instructions for meeting that goal.
Steve Vernon is an actuary by background, and he worked for years as a consultant to large corporate retirement plans before starting his own consumer retirement education firm. He is the author of six books on retirement planning, and also spends part of his time doing research at the Stanford Center on Longevity.
Steve’s latest book is Don’t Go Broke in Retirement - A Simple Plan to Build Lifetime Retirement Income.
Steve writes that there are five essential decisions to make about your retirement plan:
When to retire
Whether to work part time after you do retire
When to start your Social Security benefits
How to deploy your savings in retirement
How to protect retirement income from a financial crisis.
These decisions are essential now, as we move through the severe recession induced by the pandemic, and I quizzed Steve about how to think about these five guideposts during the current emergency.
Listen to the podcast by clicking the player icon above. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Does Social Security still rely on the postal service?
Top Democrats have been warning that the problems afflicting the United States Postal Service pose will hurt seniors who rely on letter carriers for Social Security checks, medications and other critical mail. There is some evidence already of problems with prescription drug deliveries - but how about Social Security? Should beneficiaries be concerned about a slowdown in mail service?
I took a dive into this for my latest New York Times Retiring column, because my recollection was that most Social Security benefits are delivered electronically these days. Sure enough - 99 percent of all benefits these days are delivered via direct deposit to a checking or savings account, or to a government-sponsored debit card. The Social Security Administration has required electronic delivery since 2013, although some exceptions are made.
But in a system as massive as Social Security, one percent translates to a significant number of people still receiving paper checks - 850,000.
Just as important, Social Security sends and receives millions of pieces of mail every year, including notifications, requests for information, Medicare enrollment forms and replacement Social Security cards. More isolated, rural parts of the country are particularly vulnerable to problems within the postal system. And the shutdown since March of Social Security’s national network of field offices because of the pandemic means that more business is being transacted through the Postal Service that normally would be handled through in-person visits.
Learn more in my Retiring column.
Another chat about the pandemic and retirement timing
Before the coronavirus pandemic, at least one retirement trend was headed in the right direction: More workers were staying on the job longer, and that was good news for retirement security.
But COVID-19 has stopped that trend in its tracks. An accumulating body of data reflects an acceleration of early retirement as jobless older workers give up on the labor market due to the unique health barriers posed by the coronavirus. This trend will be bad news for the retirement prospects of millions of Americans.
I joined career coach Marc Miller (yes, he uses an incorrect spelling for his name) on his podcast this week to discuss implications of the pandemic for careers and retirement timing. You can catch our conversation here. Or, read my latest Morningstar column, here.
Recommended reading this week
The U.S. Department of Labor’s social investing rule is likely to advance despite massive opposition . . . And DoL will hold a hearing on its new fiduciary rule after all . . . Millions of unemployed older workers are struggling to keep their health coverage . . .More than 40 percent of COVID19 deaths are linked to nursing homes . . .Trump sends fast, cheap COVID19 test to nursing homes, but there’s a catch . . .Is it time to abolish nursing homes?
Subscribe at retirementrevised.substack.com
Before the pandemic, at least one retirement trend was headed in the right direction: more workers were staying on the job longer - and that was good news for retirement security.
But COVID-19 has stopped that trend in its tracks. Early retirement is accelerating as jobless older workers give up on the labor market due tothe unique health barriers posed by the coronavirus.
What can you do if you find yourself in this situation? This week on the podcast, I talk with Kerry Hannon. Kerry is an expert on career transitions, entrepreneurship and retirement. And she has a new book that couldn’t be more timely - Great Pajama Jobs: Your Complete Guide to Working from Home.
I invited Kerry on the program to talk about how part-time work can help fill income gaps in the event of early retirement . . . and practical strategies for finding part time gigs. We talked about the types of jobs out there, companies doing the hiring, how to make sure your skills are a good fit and where to search.
Click the player icon at the top of the newsletter to listen to the podcast - it also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Retirement abroad: A new calculator helps you figure it out
If you’ve ever toyed with the idea of retirement abroad but have no clue where to go, a new calculator could give you a first-cut look at some ideas.
International Living magazine has launched an Overseas Retirement Calculator to generate a list of places where you budget may provide good value. You input data about your age, savings, and projected retirement budget, and the calculator generates overseas options to consider in Latin America, Southeast Asia, and Europe. All of the locations appear on International Living annual Global Retirement Index, which details the world’s top retirement locales.
If you do give this calculator a whirl, keep in mind that it is no more than a starting point -do your research carefully before heading off somewhere!
I interviewed one of the magazine’s editors last year on how to do this.
What a shock - people are throwing away thick packets of disclosure forms
A key criticism of the Securities and Exchange Commission’s new Regulation Best Interest is that it relies too heavily on disclosure - so long as brokers tell you about all their conflicts of interest, all is well. Now, advisors report that clients are ignoring the disclosure forms. Shocking!
ICYMI: Race and retirement
In last weekend’s New York Times, I examined how structural racism impacts people of color in retirement, and ideas that have surfaced to address the problem. Racial gaps in retirement security were large before the coronavirus struck, and the economic disruptions caused by the pandemic could worsen the problem.
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Source: AARP
This week on the podcast, we consider this startling question: What would happen to Social Security if we eliminate its funding?
That’s the question I’m asking myself following Donald Trump’s presidential memorandum last weekend ordering the deferral through year-end of revenue collected under the Federal Insurance Contributions Act - better known as the payroll tax - that funds Social Security.
FICA is the more appropriate name, because it more accurately describes the purpose of these payroll deductions. This is the main way that Social Security is funded - a 12.4% tax split evenly by workers and employers. The program also earns some revenue from interest on trust fund bonds and taxation of benefits, but that’s trivial compared with the $1 trillion in FICA that comes in to the Social Security trust fund every year.
And FICA is the more appropriate name, because it more accurately describes the purpose of these payroll deductions - they are insurance premiums that we pay for Social Security. Which is a social insurance program. That’s a term that used to mean something in our country, but it is hardly used anymore. So, just to review the bidding:
Social Security and Medicare provide benefits we all earn through a lifetime of premiums - that we pay via FICA. The idea of an earned benefit is the core concept of social insurance, alongside the idea that these programs efficiently protect us all against risks - namely, the loss of income in old age in the case of Social Security, or healthcare costs in the case of Medicare.
But here’s the real stunner: in an election year, Trump threatened last weekend to push for termination of FICA altogether if he wins a second term. One of his top campaign lieutenants doubled down on that pledge in a tweet. White House officials have been scrambling all week to walk this back, but . . . who knows.
I wrote about this for Reuters this week. But I also covered a fascinating webinar yesterday on Social Security reform where this came up. It was sponsored by the American Academy of Actuaries, and it featured a panel of Social Security experts from different perspectives and areas of expertise. Social Security’s chief actuary was on the call - and when you hear Steve Goss talk about Social Security, you really are hearing from the authoritative source on the finances of the program. The panel also included panelists with three different ideological perspectives - Rachel Greszler, an economist with the Heritage Foundation, Bill Hoaglund of the Bipartisan Policy Center, and Nancy Altman of Social Security Works.
If we stop funding Social Security through FICA, just about anything can happen. The concept of an earned benefit can go out the window pretty quick, and people will start thinking of Social Security as welfare.
The podcast includes comments from all the webinar guests, and there’s an especially valuable overview from Goss on the current state of Social Security’s finances. Steve references some of his presentation slides in that clip, so if you want to follow along with him, here’s a link to a downloadable PDF that includes the relevant slides. The whole thing gets a little wonky, so you may prefer to just listen.
Ironically, all this is up for discussion on the 85th birthday of Social Security. FDR signed Social Security’s enabling legislation on this date in 1935 - and it has has never missed payment of a dime’s worth of benefits. For most of its history, Social Security has been our most important retirement program. And for most of its history it has been the subject of controversy and unwarranted attacks.
Defunding Social Security is a surprising proposal to hear in an election year - just take a look at the chart at the top of the newsletter showing responses to a new public survey on Social Security issued today by AARP to commemorate the anniversary - this question shows the overwhelming support for Social Security by Democrats, Republicans and independents alike as they respond to this question: How important is Social Security relative to other government programs?
This is a year to pay attention to what politicians say about the future of the program.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
America’s racial retirement gap, and how to close it
In this weekend’s New York Times, I examine how structural racism impacts people of color in retirement, and ideas that have surfaced to address the problem.
Racial gaps in retirement security were large before the coronavirus struck, and the economic disruptions caused by the pandemic could worsen the problem.
Since the pandemic hit, unemployment rates for older Black and Latino workers have been much higher than for their white counterparts, and evidence is mounting that millions of older workers will retire prematurely. That will mean sharp reductions in Social Security income, savings and costly disruptions in employer-provided health care that will hit nonwhite workers especially hard.
But the gaps in resources for retirement were large before the pandemic. In 2016, the typical Black household approaching retirement had 46 percent of the retirement wealth of the typical white household, while the typical Hispanic household had 49 percent, according to a study by the Center for Retirement Research at Boston College.
A bit of good news: Social Security closes the racial gap significantly. The Center for Retirement Research at Boston College compared wealth ratios for white, Black and Latino near-retirement households, including Social Security and pensions, retirement and non-retirement saving accounts and home equity. But the researchers then compared wealth with and without Social Security. This first table shows what the wealth gap would look like if we didn’t have Social Security - you can see the gaps are quite large.
This second table compares wealth including Social Security. Inequality is still large, but not quite as staggering.
This is due in part to Social Security’s progressive benefit formula — it returns a higher percentage of pre-retirement income to lower-income than higher-income workers. And unlike private pensions and homeownership, nearly all Americans participate in Social Security. The universal nature of Social Security also is an important factor.
My Times story discusses ways that Social Security could be changed to close the gap further, and an intriguing concept for jump-starting wealth for people of color at birth.
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This week on the podcast, we examine proposed Senate legislation to create Congressional “rescue committees” that could propose cutbacks to Social Security and Medicare benefits.
My guest is Nancy Altman, the president of Social Security Works, one of the leading progressive advocacy organizations for Social Security. Nancy also brings a unique vantage point as a scholar and historian of Social Security. And she also served on the staff of the Greenspan Commission, which succeeded in passing significant reforms to Social Security back in 1983.
Senator Mitt Romney of Utah is the sponsor of the TRUST Act, a bill I consider to be ironically named, because it could lead to benefit cuts for these programs through a secretive closed-door committee process. The TRUST Act has been rattling around Congress for a while, but now it may be included in whatever pandemic relief bill the Senate Republicans wind up proposing. Yes, you heard that right - in the middle of a pandemic, Senate Republicans may propose a review of Social Security and Medicare that could lead to cutting these vital programs.
The TRUST Act would require the U.S. Department of the Treasury to report to Congress on the health of the Social Security and Medicare trust funds within 45 days of passage. Congress would then appoint bipartisan committees to come up with recommendations by June of 2021. Then, lawmakers would be required to take an up or down vote on the proposals, with no amendments allowed.
Ok, first - let’s stipulate that these trust funds have problems that need to be addressed.
The Social Security trust fund is on track to be exhausted in about 15 years - at that point, it would have sufficient revenue coming in the door to pay roughly 80 percent of promised benefits. The Medicare hospital trust fund - which pays for Part A - is on track to be exhausted in 2026 - and it could be sooner than that due to the pandemic.
But we don’t need reports from Treasury to know these things - the Social Security and Medicare trustees issue exhaustive, authoritative financial health reports annually. And we don’t need new analysis of ways to reform the programs - numerous studies, reports and Congressional hearings have been held in recent years, featuring testimony from experts representing all political and policy perspectives.
But there’s a good reason why Republicans want this debated away from the public eye, especially where Social Security is concerned. Simply put, they want to advance ideas that the public doesn’t support, like higher retirement ages, means testing and a stingier annual cost of living increase. That is clear from their own legislative proposals in recent years, and the ideas they push in bipartisan policy settings, such as the 2016 report issued on retirement policy by the Bipartisan Policy Center. But public poll after public poll has shown that given the choice, the public would prefer higher taxes over benefit cuts.
Sometimes, the Republicans come right out in the open and tell you why they want the debate to occur in private. Here’s Iowa Senator Joni Ernst at a town hall meeting last year:
Click the player icon at the top of this page to listen to the podcast. And here’s my Reuters column this week, which discusses the TRUST Act.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Why it’s time to fire your broker
Jay Abolofia thinks it’s time to get rid of your broker.
Jay is a fiduciary CFP, founder of his own planning firm, Lyon Financial Planning and an economist. You may recall that he joined me on the podcast back in March to talk about how to deal with fear of stock market volatility.
Jay recently got back in touch with me about an article he posted on the high cost and financial conflicts involved in working with a stock broker - a timely topic, since the Security and Exchange Commission’s new (and toothless) “Regulation Best Interest” took effect recently.
Jay’s post is titled Why it’s time to break up with your broker, and it details the numerous conflicts of interest and high fees that pose major barriers to your financial success. I’ve been highlighting this topic for years, but Jay did some great digging into the disclosure forms of the major brokerage firms, so I asked his permission to cross-post his article here:
In his book The Four Pillars of Investing, financial theorist and author William Bernstein puts it bluntly:
“Under no circumstances should you have anything to do with a full-service brokerage firm . . . Severing that professional relationship is necessary to your financial survival.”
This is often easier said than done, as your broker may be your neighbor, friend or even family. In what follows, I shed light on the conflicts of interest and excessive fees that are commonplace in the brokerage industry today. (Please proceed with caution. What I’m about to share may shock you.)
Your Broker is Not Your Buddy
A stockbroker is a person in the business of buying and selling financial securities on behalf of customers. Long story short, a stockbroker is a professional salesperson. Brokers need trades to make money. Unlike investment advisors, who must register with the SEC or state securities regulator, brokers are not fiduciaries. Rather than being required by law to act in their clients’ best interest (like doctors, lawyers, bankers and accountants), brokers are instead subject to a “suitability” standard upheld by a private-sector organization. This standard says that brokers should “have a reasonable basis to believe a recommended transaction or investment strategy is suitable for the customer.” Yes, you read that correctly! As the old adage goes, a broker’s job is to slowly transfer his client’s assets to his own name.
There are no educational requirements to be a broker. No courses in finance, economics or law. Not even a high-school diploma. Earn a 72% on the simple multiple choice Series 7 exam and you’re ready to manage other peoples’ life savings. Spend five minutes reading my Four Steps to Successful Long-term Investing and you’ll know far more than the average broker.
Brokers have one incentive, and that is to earn their commission. This creates a minefield of conflicts. In their so-called Important Account Information booklet, a disclosure document hidden deeply within their website, Morgan Stanley beautifully summarizes many of these conflicts of interest. I count over twenty major conflicts (see pages 7-12). These read like a coup de grâce. Here are five I find particularly egregious.
“A Financial Advisor has an incentive to recommend more transactions or to break transactions into smaller increments that might generate higher and more frequent commissions.”
“A Financial Advisor has an incentive to recommend that you add more assets to your account, as it will generate a higher asset-based fee . . . [and earn them more] compensation based on certain milestones.”
“Financial Advisors may receive more or less compensation if, for example, clients select certain products over others.”
“Financial Advisors, could engage in outside business activities and investments or have outside or pre-existing relationships with product or service providers that conflict with their job responsibilities."
"Financial Advisors are also compensated when their clients borrow funds."
In short, you can’t trust much of anything your broker says. It’s not because they are inherently bad. It’s because they are trained and incentivized to sell, not to deliver objective advice.
Your Broker Charges Exorbitant Asset-Based Fees
Brokers are typically paid an investment management fee based on the amount of assets they manage in your accounts. These are called asset-based or assets under management (AUM) fees. These fees may or may not include any financial planning your broker provides and may be in addition to other fees, commissions, fund expenses, taxes, and investment-related costs. For example, a 2% AUM fee means you’ll pay $20K in fees this year on a $1M account. As the account grows, the fee grows proportionately.
Below is a summary of AUM fees charged by some of the largest brokerage firms for their most common investment management service for retail customers. Morgan Stanley, Ameriprise and Wells Fargo take the cake for highest fees. Although publicly available, this information is a bear to uncover.[1] These fees are typically assessed on at least the first $1-5M in the account, depending on the broker and service, with slightly lower fees assessed on higher account balances.
Two percent might not sound like much, until you consider that it’s ¼ to ½ of the gross annual return you may expect to earn in your accounts. Over years of investing, this can add up to hundreds of thousands of dollars lost, both to fees and lost investment growth—every dollar paid in fees is one less dollar earning compound interest in your account. With a 2% AUM fee, a $1M account growing at 6% a year will result in cumulative fees over 20 years of $623K and $443K in lost investment growth. This amounts to a loss of over $1M, or 48% of the account’s cumulative growth!
Break Up With Your Broker
Given these major conflicts of interest and exorbitant asset-based fees, Bernstein’s advice to break up with your broker really adds up. You’ll likely get much better financial advice and save hundreds of thousands of dollars by working with an independent, fee-only fiduciary. One with solid credentials and experience, who provides comprehensive financial planning, not just investment advice or management. Better yet, find an advisor who does all of this for a straightforward fixed-fee and your future self will thank you!
[1] Fee information can often be found in the firm’s disclosure documents. For example, read the section on “fees and compensation” in the firm’s “wrap fee” program brochure or ADV Part 2A. Here are source links I used for each firm: Morgan Stanley, Ameriprise, Wells Fargo, Merrill Lynch, Edward Jones, UBS, Fidelity, Charles Schwab.
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This week on the podcast, we take a look at the challenges facing couples as they navigate decisions about timing their retirement in the time of pandemic. This podcast stems from a column I wrote last month for the New York Times. That story examined how the pandemic is affecting all aspects of retirement timing for older workers - everything from the job losses happening due to the recession to age discrimination issues related to health risks.
Retirement timing is one of the most important factors affecting retirement plans. When you are able to work longer, those additional years of wage income make it easier to delay your Social Security filing, earning delayed filing credits. Working longer also can mean saving more and living off those savings for fewer years. It also could get you more years of employer-subsidized health insurance. (For more on this see my recent guide for subscribers on retirement timing.)
About one-third of baby boomers and Genxers tell pollsters that they plan to work longer because of the economic crisis. But that may be easier said than done. Even before the pandemic, about half of all workers who retired between age 55 and 64 did so involuntarily because of ill health, family responsibilities or job loss.
And the pandemic is going to make things much tougher. For the first time since World War II, the rate of unemployment and underemployment has been running higher for workers over age 65 than it for other adults. There’s also mounting evidence of a large spike in people taking early retirement, as I note in the Times story.
The virus creates a sort of double jeopardy for older workers - if they go back to work, they face a risk of serious illness. If they stay home, they stand to lose income and may be forced to file for Social Security earlier than planned. That will have lifetime financial consequences.
One of the topics I covered in the column is how couples are approaching these complicated questions. A decision to return to the workplace may not only create infection risk for that person but put a spouse at risk as well. I wanted to pursue that further on the podcast this week.
Joining me are two guests:
Katherine Carman is a senior economist at the RAND Corporation. Currently she is studying health insurance decisions and retirement decisions. And she is the co-author of a Rand study (pre-pandemic) on retirement patterns among couples. The research found a fluid pattern of decision making, often involving phased retirement, short-term jobs, and periods of non-employment and returns to work. She found that for most couples, there is a “discordant” phase, when one spouse works longer than the other.
Dorian Mintzer is an experienced therapist; retirement transition, money, relationship, and executive coach; consultant; speaker; and writer. She hosts the monthly Revolutionize your Retirement Interview with Experts series; she also is co-author of the award winning book The Couple's Retirement Puzzle: 10 Must-Have Conversations For Creating An Amazing New Life Together. And at age 74, Dori finds herself at a personal crossroads and she and her husband try to sort out their own retirement timing issues.
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Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Widespread unemployment and retirement risk
Widespread unemployment due to the pandemic would increase the number of older households at risk of being unable to maintain their pre-retirement standard of living. That’s not a big surprise.
But the latest update of the National Retirement Risk Index (NRRI) finds something else quite interesting. Low-income households face greater job risk, but their retirement security risk is similar to that of higher income groups.
The NRRI is produced by the Center for Retirement Research at Boston College. The latest update finds that widespread unemployment would increase the NRRI from 50.2 percent to 54.9 percent of all working-age households, resulting in an additional 4.7 percent of households at risk in retirement. The results for the 30 percent of households that experience the job loss are much more dramatic. The NRRI for this group increases from 54.4 percent to 75.4 percent, a 21-percentage-point jump.
But a closer look by income groups and age shows that while low-income households have a greater chance of losing their job than those in the upper two groups, their risk does not increase proportionately.
What’s going on? According to CRR:
One reason for this pattern is the progressivity of the Social Security benefit formula. Reduced lifetime earnings due to the employment shock increase the Social Security replacement rates for the unemployed in all income groups, but this effect is particularly important for the bottom third, which relies almost entirely on Social Security for retirement income.
I’m starting work now on a new story about the role Social Security plays in this very difficult economic climate in smoothing out retirement inequality, with a particular focus on race. Stay tuned.
Nursing home death rates exposes cracks in the system
The high death rates from COVID-19 in nursing homes and long term care facilities was a catastrophe waiting to happen. As Trudy Lieberman notes in this article for the USC Annenberg Center for Health Journalism:
The coronavirus pandemic has exposed the chasms, the fissures, the cracks in many American institutions. Nowhere, though, are they more apparent than in the nation’s arrangements for long-term care — specifically, in its nursing homes, where some 1.4 million people, mostly women, live out the rest of their days.
The virus has exposed what advocates for better treatment and families of loved ones in nursing facilities have known for years. Care is often substandard, infection control sometimes non-existent, living space overly crowded, staff members too few to keep residents safe, and a regulatory system that looks good on paper but too often looks the other way when politics and lobbying trump good enforcement and resident safety.
In May, the Government Accountability Office released a damning report showing that only 18% of the country’s nursing homes had no deficiencies for infection control and prevention in one or more of the years from 2013 through 2017, before the virus hit. That’s a grim indictment of how America cares for its most vulnerable elders. “It is a policy failure based on moral negligence,” said Larry Polivka, executive director of the Claude Pepper Center at Florida State University. “We need to understand more clearly this moral failure that is responsible for the crappy long-term care system we have built over the decades. It comes from not caring enough about older people when they need help.”
Lieberman goes on to cite several examples of exemplary reporting on the pandemic and nursing homes from outlets including Reuters, the Boston Globe and PBS NewsHour; you'll find links to those stories in Trudy's story.
Meanwhile, Paul Kleyman offers an excellent round-up on this topic in his Generations Beat Online newsletter that includes links to more worthwhile coverage. And Howard Gleckman of the Urban Institute asks this provocative question:
We’re having a national conversation about race and Policing - why aren’t we having one about race and long-term care?
Recommended reading this week
Covid-19 sickens seniors differently -here’s why . . . How a Covid-19 vaccine could cost Americans dearly . . . What seniors should know before going ahead with elective procedures . . . Planning to work beyond retirement age? Consider entrepreneurship . . . New internet radio station helps seniors share their favorite music.
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For this week’s podcast, I called up financial planner and author Allan Roth to ask one simple question: “What the hell is going on with the stock market?”
I’ve long believed that it is folly to forecast the market’s direction, and this podcast serves as a nice reminder of why I’m right about that! When I first invited Allan to talk about the market earlier this week, the backdrop was the gravity-defying rally of the last couple months. The day after we talked, the S&P 500 racked up its worst day since March, falling nearly 6 percent. I’m writing this on Friday morning; how will the market do today? I haven’t got a clue.
The rally since March made no sense to me in the first place. Jeff Sommer summarized this sentiment nicely in a column for The New York Times last weekend:
Towns and cities across the United States have been convulsed in protest against police killings of black people. The president has declared that he is prepared to deploy the United States military to “dominate” the streets — while his secretary of defense says he opposes using military force against American civilians.
Teetering on a constitutional precipice, the country faces catastrophic unemployment, grave trade tensions and a deep recession. And no one needs reminding that the world has been stricken by a coronavirus pandemic that has already killed more than 380,000 people, more than 106,000 of them in the United States.
You may want to place these items in a different order, add some or subtract others. But it would seem that at least we can all agree that we are looking at an ugly picture.
Yet there is a glaring exception to all this gloom: the stock market. It has been absolutely fabulous! In fact, by some measures, the American market has never been better.
On Thursday, the stock market seemed to be facing reality after a fresh Federal Reserve projection that the economy faces a long, multi-year slog back to health, and that much uncertainty remains. But we might recover from the drop quickly. Or not.
Allan Roth joined me for a podcast back in March to talk about how average retirement investors should think about market volatility. He was back on my radar screen this week following an excellent column for Adviser Perspectives titled The Question Every Advisor Must Answer. This piece runs through the panicky questions and assertions many financial planners are fielding from clients these days:
An economic depression is possible, if not likely.
There will be at least a 50% market decline.
The chance of a rally, much less getting anything close to historical stock returns, is near zero.
A state-issued general obligation (GO) muni bond held to maturity is safe – no defaults since 1932 – and yields 5% on a taxable equivalent basis.
Take everything out of stocks for at least six months or until after a big correction.
In our conversation, Allan and I considered those questions and more. Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
RetirementRevised.com guide: Timing your Retirement
Speaking of working longer - if you’re a subscriber, check out my recent guide on Timing your Retirement. This guide gets into the details on how timing impacts your retirement security. You can find it on the newsletter guide page for paid subscribers.
If you haven’t subscribed yet, give it a try - $60 annually or $5 per month, no obligation and feel free to cancel at any time. You’ll have access to all of my newsletter content and podcasts, plus all of the retirement guides, including:
Claiming Social Security
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Aging in Place
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These economists want to lock down everyone over age 65
Here’s a truly outrageous plan for getting the economy back up and running: simply force everyone over age 65 into lock down.
That’s one of the ideas floated in a frightening research paper by three economists from the Massachusetts Institute of Technology. Their argument: since older people are at greater risk of serious illness and death, let’s just force them all to stay home and let everyone else get back to work. Here’s how they summarize it in an article for Time magazine:
As is well documented, the mortality risk from COVID-19 is highly correlated to age. Because those over 65 years of age have around 60 times the mortality rate of those ages 20 to 49, lock downs on the elderly as a protective measure can be very effective in reducing deaths. They also have lower economic costs than lock downs for younger adults, as only around 20% of those over 65 are still working.
The choice between protecting lives and economic recovery is complex and difficult–not least because politicians and the public alike disagree on the trade-off between excess deaths from the pandemic and the economic damages. But our study shows, no matter what the priorities are, targeted policies bring both public-health and economic benefits.
Ok, first of all - comorbidity risk is not high only for the elderly. It is very high for people who are obese, have diabetes or asthma, for example. Do we place all of them in a mandatory lock down, too?
Just to be clear - I think older people should be isolating themselves to protect against risk. That only makes sense, on a voluntary basis. But a mandatory, discriminatory policy based on age does not.
The article doesn’t explore the implications of such a policy from an age discrimination standpoint - that is, what about older workers who are still on the job? This probably is because their paper they classify everyone over age 65 as “old.” (They didn’t have the nerve to use that description in the Time article - only in their research paper, which is here).
This study underscores why it is so important to rely on guidance on COVID19 from real experts - who just happen to be epidemiologists. Not economists.
Speaking of epidemiologists . . .
The New York Times asked more than 500 epidemiologists when they personally expect to resume 20 activities of daily life, assuming that the pandemic and the public health response to it unfold as they expect. The results offer a telling snapshot of what the real experts on the pandemic expect, from a “vote with your feet” perspective. This is well worth a glance - the charts alone are worth a thousand words.
The upshot: for most of them, resumption of daily activities is anywhere from three months away to more than a year.
Recommended reading this week
The latest on prescription drug reform proposals from the presidential campaigns and Congress . . . 30 companies that hire for part-time, remote work-from-home jobs . . . Policy ideas for strengthening the Medicare Hospital Insurance trust fund . . .Nearly half of workers expect to withdraw savings because of the COVID-19 crisis.
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This week on the podcast, we take a look at what the pandemic is teaching us about ways to improve Medicare. The crisis has put a bright spotlight on weaknesses in many of the systems designed to protect Americans from risks. But older people are more susceptible to serious illness and death from the virus. The problems in Medicare were evident before the pandemic, and now they are becoming even more clear.
My guest is attorney Judith Stein, the founder and executive director of the Center for Medicare Advocacy, which provides education, advocacy and legal assistance to help seniors and disabled people get access to Medicare. Judy is a pioneer in this work and one of the most knowledgeable people in the country on Medicare.
I expect Medicare reform will be on the agenda in Washington after the pandemic recedes. If nothing else, the looming exhaustion of the Part A Hospital Insurance trust fund in 2026 must be dealt with, as discussed in last week’s newsletter. But the pandemic underscores problems in the way that Medicare oversees nursing homes and the rising privatization of the program. We also should deal with the gap in dental, vision and hearing coverage, enrollment simplification and more.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
I also addressed this question in my column this week for Reuters.
How will the pandemic impact the finances of Social Security and Medicare?
When it comes to the financial health of retired Americans, nothing is more important than Social Security and Medicare--hands down.
The programs are nearly universal among senior citizens: Last year 64 million Americans received Social Security benefits and 62 million were on Medicare.
Without Social Security benefits, about four in 10 Americans aged 65 and older would have incomes below the poverty line; for about half of seniors, Social Security provides at least 50% of their income. And Medicare is the only health insurance game in town for seniors.
But how is the financial health of these critical social insurance programs holding up during the pandemic--and how will they fare after the emergency recedes? I took at look at the financial outlook for both programs in my latest Morningstar column.
The number of family caregivers is soaring, and their social isolation is growing
A new study from the National Alliance for Caregiving and AARP concludes that the number of unpaid family caregivers increased by 9.5 million from 2015 to 2020 to 53 million people. The report, Caregiving in the U.S. 2020, also reveals that family caregivers are facing growing social isolation.
And - that was before the pandemic. This compelling video report from the PBS NewsHour makes clear how the pandemic has made the job of caregiving more difficult, further isolating people who already faced steep challenges. Hundreds of caregivers reached out to the NewsHour to tell their personal stories; this story features six of them.
Insulin price cap for 2021 leaves experts befuddled
President Trump announced a plan to give Medicare Part D enrollees access to plans next year featuring a maximum $35 out-of-pocket charge. But the move left drug pricing reform advocates disappointed and experts scratching their heads. As STAT reports:
President Trump used a glitzy Rose Garden address, flanked by pharmaceutical company CEOs and patient advocates, to boast of his administration’s successes lowering drug prices and to detract from his political rivals’ efforts on the same issue.
But the news he was touting was modest at best: Drug makers agreed to participate in a minor, voluntary Medicare program that will likely only provide a limited discount on insulin for a small subset of the 60 million seniors with Medicare coverage.
The average diabetic spends nearly $5,000 a year on drugs, according to Merrill Goozner, a journalist and author with deep knowledge of the pharmaceutical industry, who wrote this fascinating essay last winter on why insulin should be free.
Recommended reading this week
To fight COVID19, don’t neglect immunity and inflammation . . . Outbreaks force a harder look at nursing homes . . . Podcast interview with famed investor Charley Ellis on why active investing is still a loser’s game . . .
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
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This week, the podcast takes a look at what to do with a 401(k) account left behind with a former employer - should you leave it there, or roll it over to an Individual Retirement Account (IRA)?
I wrote about this topic last weekend for The New York Times - the context being the stunning job losses the country is experiencing now due to the coronavirus crisis.
People stuck in this situation will be looking for emergency lifelines to meet living expenses. And retirement accounts will be a tempting option, as the emergency CARES Act passed in March provides flexible hardship withdrawal options for 401(k) and individual retirement accounts.
For jobless workers who don’t need to tap retirement accounts right now, the choice is to leave the money where it is, or roll it over to an IRA. This is an important decision whenever you leave a job.
Joining me on the podcast this week to talk about IRA rollovers is Scott Puritz. Scott is the managing director of Rebalance, an investment firm that helps clients manage retirement assets. Rebalance argues that rollovers usually are the best move - and especially so when you’re shifting out of a high cost 401k plans into an IRA invested in very low cost passive mutual funds.
Listen to the podcast by clicking the player icon at the top of the page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Not a subscriber yet? Take advantage of a special offer
Sign up now for the free or subscriber edition of the newsletter, and I’ll email a copy of my latest retirement guide to you. This one looks at dealing with the Social Security Administration during the COVID19 crisis.
Customer service at the Social Security Administration has changed during the coronavirus crisis - the agency closed its network of more than 1,200 field offices to the public in March.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
House Democrats propose multi-employer pension rescue
House Democrats will take another run at rescuing multi-employer pension plans in the next round of coronavirus relief.
Roughly 10.6 million workers and retirees are relying on pensions from multi-employer plans, which are created under collective bargaining agreements and jointly funded by groups of employers in industries like construction, trucking, mining, and food retailing. There are about 1,400 multiemployer pension plans today.
Before the virus crisis, multiemployer plans covering 1.3 million workers and retirees were considered badly underfunded. Lawmakers have considered a variety of fixes, but had not reached agreement.
The $3 trillion House coronavirus relief bill, coming up for a vote by the end of this week, would require the federal government to set up a fund to rescue financially troubled multiemployer plans. Stay tuned.
Elsewhere, public pension plans had the worst first quarter on record due to the stock market’s volatility.
How Medicare’s new telehealth reimbursement is working
For years, advocates and researchers have urged greater use of telemedicine — delivered by video or phone, through online patient portals or remote monitoring devices — particularly for older adults. But Medicare has been slow to adapt, keeping tight barriers in place that prevented reimbursement to healthcare providers in most cases.
The barriers have come down during the coronavirus pandemic - Medicare is now providing full reimbursement for video and phone visits. Paula Span reports on how that is going in The New Old Age:
Still, by mid-April more than 20 percent of people over 70 had experienced a telehealth appointment since the start of the pandemic, a nationwide survey by NORC at the University of Chicago found. Almost half said they found the experience equivalent to an in-person visit; about 40 percent said it was worse.
In interviews, patients told me of similarly mixed reactions.
Learn more in Paula’s column for The New York Times.
Born in 1960? Your Social Security benefit could be lower
An odd coronavirus-related technical problem threatens a sizeable cut in Social Security benefits for people born in 1960. The issue stems from the way Social Security calculates a worker’s career earnings - a calculation that is critical to determining benefit levels. If the problem isn’t addressed - and I think it will be - these workers could see a permanent reduction in Social Security retirement benefits of around 13.8 percent, according to a research paper by Andrew Biggs, a resident scholar at the American Enterprise Institute and a former deputy commissioner of the Social Security Administration during the George W. Bush administration.
The issue here is falling national average wages this year due to the coronavirus recession. Before averaging past earnings, Social Security indexes your earnings to the growth of national average wages up to the year in which you turn 60. Nominal earnings in any past year are multiplied by the ratio of the national average wage in the year the worker turns 60 to the national average wage in the year the earnings took place. Right now, that is the 1960 birth cohort.
A decline in national average wages in that year reduces Social Security’s indexed measure of all your past earnings - and that leads to the lower Social Security benefit.
Biggs suggests fixing the problem by shifting the entire Social Security system from wage indexing to a formula that calculates benefits as a percentage of inflation-adjusted career-average earnings. Biggs and other conservative policy folks have been arguing for that change for quite a while. But the goal of any pension plan - including Social Security - is wage replacement. And generally, wage indexing produces stable replacement rates over time. Consumer price indexing would lead to declining replacement rates, e.g. benefit cuts.
Instead, Congress should simply add a hold harmless provision to the wage indexing provision. We already do that with the annual cost-of-living adjustment (something I’ll have more to say about soon, because the 2021 COLA is shaping up to be one of those weird years).
A hold-harmless clause for wage indexing would protect workers against the occasional black swan event, like the one we are experiencing now.
Learn more about this issue in Andrew’s paper, or an op-ed he penned on the topic this week for The Wall Street Journal.
Recommended reading this week
McDonald’s workers in Denmark pity us . . . The housing market faces its next crisis . . . How to earn a great risk-free return by paying down debt . . . Fearing covid-19, older people alter their living wills . . .Will COVID-19 make the decline narrative of aging worse . . . How I’m finding purpose in a pandemic.
Subscribe at retirementrevised.substack.com
This week on the podcast, we check in with labor economist Teresa Ghilarducci on the unemployment situation for older workers, as reflected in the April jobless report that was released this morning.
Teresa is a professor at the New School for Social Research in New York, where she directs the school’s Schwartz Center for Economic Policy Analysis, and its Retirement Equity Lab (ReLab). She specializes in the labor situation for older workers.
The federal government’s April jobs report market was as grim as expected. The total jobless rate soared to 14.7 percent, which meant that 20.5 million fewer Americans were employed than during March.
The worst numbers were for younger people - 26 percent of workers age 25 to 29 were out of work last month. But I wanted to talk with Teresa about the figures for older workers. The official rate for people over age 55 more than quadrupled to 12 percent, but that understates the real damage. She calculates that the true rate is around 20 percent.
We also talked about how the COVID19 crisis is rewriting the labor force dynamic for older workers. Age discrimination already was a big deal before the crisis, and many employers likely will now treat older workers differently post-crisis, since they are more vulnerable to the virus. Here’s what Teresa told me on this point:
“Since we won't have a vaccine, probably, for about two years, this means that older workers will very sensibly not want to go back to work unless their employers can make it a safe environment. And employers will not will not be able to make it that safe for older workers even if they wanted to. It'll be much more expensive.”
Listen to the podcast by clicking on the player icon at the top of the newsletter. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
New guide: Social Security in the age of pandemic
Last week, I released the latest in my retirement guide series. This one explains how to deal with the Social Security Administration during the COVID19 crisis.
The downloadable guide looks at how customer service at the Social Security Administration has changed during the coronavirus crisis, and how to get business done there. Social Security closed its network of more than 1,200 field offices to the public in March, 2020. Staff members are seeing people in person at the field offices for a very limited number of transactions. Social Security is handling most routine business via its toll-free line (800-772-1213) and its website. The guide also spells out what Medicare covers that is related to COVID19 - and the changes the program has been making to respond to the emergency.
Click here to download your copy of the Social Security COVID19 guide.
Just a reminder- subscribers, have access to the entire series of guides at any time. Click on the little green button to subscribe, or go here to learn more.
Recommended reading and listening this week
PBS NewsHour interviewed one of the nation’s leading infectious disease specialists on the likely long-range path of the virus . . . I clung to the middle class as I aged - the pandemic pulled me under . . . Covid-19 vulnerabilities were a predictable outgrowth of our market-based health care system . . . The push for profits left nursing homes struggling to provide care . . .The idea that boomers were blase about the coronavirus is nonsense. . Beware buying a Medicare plan from Joe Namath . . .Broker-dealers will have to be careful when calling themselves advisors starting on June 30th . . . Health Savings Accounts add new options during the coronavirus crisis . . . The pandemic has amplified ageism . . . Americans without retirement savings are increasingly moving in with their millennial children . . . What parts of the economy are still humming along in the crisis?
Subscribe at retirementrevised.substack.com
This week, I’m releasing the latest in the retirement guide series. This one explains how to deal with the Social Security Administration during the COVID19 crisis.
The guides usually are available only to paid newsletter subscribers, but I’m making this one available free to anyone who signs up for the paid or free versions of the newsletter.
The guide looks at how customer service at the Social Security Administration has changed during the coronavirus crisis, and how to get business done there. Social Security closed its network of more than 1,200 field offices to the public in March, 2020. Staff members are seeing people in person at the field offices for a very limited number of transactions. Social Security is handling most routine business via its toll-free line (800-772-1213) and its website. The guide also spells out what Medicare covers that is related to COVID19 - and the changes the program has been making to respond to the emergency.
Finally, the new guide also looks at how the crisis has added a new dimension to strategies for smart Social Security benefit timing decisions. And that’s the focus of this week’s podcast - click on the player icon above to listen. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Other guides in the retirement series cover topics like Medicare enrollment, the cost of healthcare in retirement and how to hire a financial planner. Click here if you’d like to learn more about becoming a subscriber to the free or paid editions of the newsletter.
When you sign up, I’ll email a copy of the new Social Security guide to you as a downloadable PDF.
Pension plans and the downturn
Investing guru Bill Bernstein has compared investors in defined-contribution plans to airline passengers sent to the cockpit to fly the plane. Bernstein would much prefer a retirement system that relies on defined-benefit pensions, with their professional management and automatic participation.
The unfolding coronavirus crisis underscores the value of professional pension pilots -- and the structure of defined-benefit plans, which don't rely on short-term market performance to meet near-term obligations. The same claim cannot be made for the 401(k) or IRA accounts of investors who are retired or close to retirement. Such investors are facing tough questions now about the reliability of their portfolios.
While there's no immediate danger that defined-benefit pension plans will fall short of resources to meet obligations during the pandemic crisis, many are taking their lumps as financial markets tumble. And the knock-on effects of the economic downturn could pose long-term challenges for pension plan sponsors as they try to meet their obligations to participants.
The situations vary among the key pension sectors--corporate, multiemployer, and public. Learn more in my latest Morningstar column.
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If you haven’t subscribed to the newsletter give it a try if your finances permit in this tough economy. You’ll be supporting independent journalism dedicated to covering what matters for older Americans. Subscriptions cost $5 per month or $60 year, and you can cancel at any time.
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This week, the podcast features Part Two of our discussion about ways to expand Medicare to more Americans.
Last week, we spoke with Marilyn Moon, a top expert on Medicare who co-chaired the recent report on expanding Medicare from the National Academy of Social Insurance. That report looked at three different ways to expand Medicare - lowering the eligibility age, establishing Medicare-for-all, and creating a Medicare buy-in.
This week, we get a minority report from one of the NASI panel’s dissenting members. Peter Arno is an economist at the University of Massachusetts-Amherst. Peter specializes in social insurance and he’s a strong critic of the for-profit health insurance industry. I spoke this week with Peter to get his perspective on why we need a government-run Medicare for All program as we come out of the coronavirus crisis.
Our conversation was based in part on a recent article on this topic that Peter co-authored, which makes this key point:
There is a large elephant in the room in the national discussion of Medicare for All: the transformation of the US health care system’s core mission from the prevention, diagnosis, and treatment of illness—and the promotion of healing—to an approach dominated by large, publicly traded corporate entities dedicated to growing profitability and share price, that is, the business of medicine.
The problem is not that these corporate entities are doing something they shouldn’t. They are simply doing too much of what they were created to do—generate wealth for their owners. Unlike any other wealthy country, we let them do it. The dilemma of the US health care system is due not to a failure of capitalism or corporatism per se, but a failure to implement a public policy that adequately constrains their excesses.
The problem of employer-based health insurance looms large at a time of mass joblessness, of course. Economist Geoff Sanzenbacher weighs in on this point here, while noting that employer coverate is unequal:
The first reason employer-sponsored health insurance is unequal is because not everyone works. In 2018, about 78 percent of adults age 25 to 64 (the age before Medicare kicks in), were in the labor force. And 2018 was a good economic year. 2020 is not a good economic year. While people who don’t work might be able to get health insurance through a spouse but, as I’ve talked about before, marriage is declining especially for the poor.
Instead, Medicaid sometimes fills the gap for people who are very poor and don’t work. Of course, in some states, this option isn’t available for people without kids. For those who are less poor, the Obamacare Individual Marketplaces might offer an option. Then again, the Trump Administration hasn’t made it a priority to improve those markets. And, the administration hasn’t exactly made enrolling any easier, even for people who have lost their jobs due to the Coronavirus.
OK, but what if we only care about people with jobs? At least these people get insurance. Right? Nope. The figure below shows that health insurance access is much higher for people in high paying jobs. So, the people that can most afford to pay for healthcare even without insurance, are also the most likely to have it. Yikes.
Listen to the podcast interview with Peter Arno by clicking the player icon above; the podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Social Security claiming in the pandemic
Over the past decade, far more workers who are eligible for Social Security have been waiting to file, often substantially increasing their lifetime annual benefits.
But the stunning job losses in the pandemic-induced economic crisis could bring this trend to a crashing halt, as suddenly unemployed older workers without substantial savings scramble to meet living expenses.
In my Retiring column for The New York Times last weekend, I reviewed the pros and cons of different strategies for claiming benefits during the coronavirus pandemic.
Making COVID-19 advance care directive decisions
“I am alarmed that we are not yet thinking ahead.”
So writes Dr. Joanne Lynne in a Health Affairs post, Getting Ahead Of COVID-19 Issues: Dying From Respiratory Failure Out Of The Hospital.
Dr. Lynne, a respected physician on end-of-life care, writes that much more attention needs to be paid to issues such as:
Determining care preferences for people at high risk of dying from COVID-19, so we know whether they want to endure hospitalization and life on a ventilator if they get a bad case;
Getting ready to support peaceful course to death in homes and nursing homes for those who otherwise face suffocation.
There’s much more here if you care to take a deeper dive.
Other articles I’m reading this week
The fight against the coronavirus won’t be over when the U.S. reopens . . . Expert advice on fitness when you’re stuck at home . . . All the places coronavirus lurks (or doesn’t) . . . the Older Americans Act reauthorization was signed into law . . . The late songwriter John Prine always knew loneliness was a public health crisis . . .Medicare Advantage enrollment has grown rapidly over the past decade, and Medicare Advantage plans have taken on a larger role in the Medicare program.
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This week on the podcast, we’re going to talk about Medicare, and how it can be expanded.
The news peg for this edition was Joe Biden’s announcement last week that he will support lowering the age of Medicare eligibility to 60. This brought to mind a recent study on ways to expand Medicare eligibility from the National Academy of Social Insurance -- a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance. For this study, the academy convened a study panel of 27 top experts in economics, health policy, political science, sociology, medicine and law.
Joining me is the co-chair of the NASI study, Marilyn Moon. Marilyn is one of the nation’s top experts on Medicare. She’s an economist who has written extensively on health policy and reform issues related to Medicare and other social insurance topics. Along with her academic career, she is a former public trustee of both Medicare and Social Security. She also has worked for the Congressional Budget Office and she was the founding director of AARP’s public policy institute.
I really recommend the report to anyone interested in getting past the headline level of understanding on this issue. It offers a fascinating in-depth look at three approaches to expanding Medicare eligibility: lowering the eligibility age, establishing Medicare-for-all, and creating a Medicare buy-in.
I asked Marilyn to provide an overview of these three approaches to expanding Medicare eligibility. On next week’s podcast, we’ll drill a little further into the arguments for Medicare for All.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
I also wrote about the report this week for Reuters.
In the virus crisis, financial planners are stepping up their pro bono game
When a crisis strikes and people are in need, it’s only natural to want to help.
Empathy is a common reaction to trauma, and we’re experiencing such a moment now with COVID-19, a mass-level public health crisis paired with an economic emergency. And a growing number of financial advisors are offering pro bono financial guidance to people who need it right now. Learn more in my column this month for WealthManagement.com.
Other recommended reading this week
More isolation - just what older people didn’t need . . . Consumer advocates charge the annuity industry with using the COVID-10 crisis to promote pro-annuities legislation . . . . Why aging immune systems are more vulnerable to the coronavirus.
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If you haven’t subscribed to the newsletter, give it a try if your finances permit in this tough economy. You’ll be supporting independent journalism dedicated to covering what matters for older Americans. Subscriptions cost $5 per month or $60 year, and you can cancel at any time.
If not, no worries - I’m committed to providing everything I’ve got on the coronavirus crisis in the free edition for as long as it takes.
Subscribe at retirementrevised.substack.com
On this week’s podcast, we consider the impact on older workers of the extraordinary coronavirus-induced shutdown of the U.S. economy. Of course, workers of all ages are impacted by the stunning loss of jobs, but some special problems apply to people over age 50.
My guest this week is labor economist Teresa Ghilarducci. Teresa is a professor at the New School for Social Research in New York, where she directs the school’s Schwartz Center for Economic Policy Analysis, and its Retirement Equity Lab (ReLab).
She also blogs for Forbes.com, where she recently posted a piece with this provocative headline -Useless Retirement Advice And Bad Government Policy In The Time Of COVID-19.
I talked with Teresa about what the numbers on older workers in this pandemic economy are looking like so far. We also discussed the impact of the economic and market crashes on retirement savings, home equity and health care spending - and the special risks older workers who are still on the job are facing during the pandemic.
Listen to the podcast by clicking the player icon above. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Social Security is posting COVID-10 updates
The Social Security Administratino has a COVID-19 alert page that it is updating regularly. You can sign up for updates by email. This week, the SSA posted a couple updates on Medicare enrollment and other adjustments the agency is making during the crisis.
Biden proposes reducing Medicare’s eligibility age to 60
Joe Biden proposed lowering the Medicare eligibility age to 60 this week as he moves to unify the Sanders wing of the Democratic party with more moderate elements. If you have employer coverage and want to keep it, you can do so - or move to Medicare. In other words, the same option we have now for the 65+ population. This is an interesting, positive move on Biden’s part but it doesn’t go far enough, as I explain below. So, I’d say it likely is just an opening bid.
As the COVID-19 health insurance situation evolves, one lesson people are learning rapidly is that we need much more aggressive expansion of health care and insurance in the United States. That has been clear for years, but the crisis is putting a harsh spotlight on the gaps and failings of our current system.
Last month, the National Academy of Social Insurance (NASI) released a study of various ways to extending Medicare eligibility beyond the current 65+ population. The report was created by a Study Panel on Medicare Eligibility made up of 27 experts from a broad range of perspectives, such as economics, health policy, political science, sociology, medicine, and law, as well as people with direct experience working in areas related to public and private health insurance, including actuaries, health plan administrators, health care providers, labor representatives, and government regulators.
The report examines three approaches to changing Medicare eligibility: lowering the eligibility age, establishing Medicare-for-all, and creating a Medicare buy-in. Here’s the upshot:
Medicare for All is the most comprehensive solution, but the heaviest political lift to achieve in a single sweeping reform.
The Medicare buy-in concept sounded great rolling off the tongues of moderate presidential candidates like Pete Buttigieg (“Medicare for all who want it” - what’s not to like about that?). But it actually is the most complicated and problematic option.
Lowering the Medicare age might just be the sweet spot. It can be done incrementally and it’s fairly straightforward. The only real problem is protecting the Part A trust fund, which Biden proposes to do by financing costs from younger enrollees from general revenue, rather than the payroll tax.
But in order to get the biggest gain in health care coverage, the age would need to move much lower than 60. Here’s what NASI found:
Notice how many more people join Medicare if you drop the age to 50? Doing this gets millions of people who now must turn to employer coverage or the Obamacare exchanges for insurance. The latter can be problematic for people with serious health needs - premiums can be very high if you don’t qualify for the tax subsidies, and deductibles often are high, too.
So - dropping the age to 60 is a decent start. Perhaps an incremental approach would work here - 60 in year one, 50 in year two, 30 in year three - and then it’s everyone in the pool.
Here’s more detail on the NASI lower-the-age plan. And the full report is here.
Here’s Biden’s statement.
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If not, no worries - I’m committed to providing everything I’ve got on the coronavirus crisis in the free edition for as long as it takes.
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The podcast this week is a follow-up to my recent story for The New York Times on Medicare and COVID-19. The topic is important, since older Americans are at a high risk for serious illness from the coronavirus, and most who are over age 65 are covered by Medicare.
My guests are two of the top experts in the country on Medicare - Tricia Neuman and Juliette Cubanski of the Kaiser Family Foundation. Kaiser is one of the nation’s premiere sources of research and information on all aspects of health care and health policy. It’s a non-profit organization, and non-partisan, and it’s been a key go-to source for me for years. Tricia is a senior vice president of the foundation and executive director of its Program on Medicare Policy. Juliette Cubanski is the program’s deputy director.
Medicare already covers its enrollees for much of what they might need if they contract the virus and become seriously ill — and it has expanded some services and loosened some rules in response to the crisis.
I asked Tricia and Juliette about Medicare coverage of COVID-19 testing and care, as well as what’s going on with skilled nursing care, network restrictions and expanded telehealth options. We also went over a wish list of things Congress should consider adding to Medicare, or reforming, to help meet this crisis.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Social Security field office closings
Social Security local offices are now closed to the public. Some field office staff are still reporting for work, and others are working virtually. The offices are offering in-person assistance for a short list of crucial services. These include reinstatement of benefits in dire circumstances; assistance to people with severe disabilities, blindness or terminal illnesses; and people in dire need of eligibility decisions for Supplemental Security Income or Medicaid eligibility related to work status. Those seeking these services must call in advance.
Another situation that may require you to interact with a local field office is if you are filing for Medicare benefits for the first time and are past the initial filing age of 65. In that situation, call your local office to get the application started, because there will be a couple forms that need to be filed. I describe that in more detail here.
If you need to visit a local Social Security office for in-person services, call the office to request an appointment. You can find the closest office using an office locator tool on the Social Security website, where the agency is also providing updates and information on services
Answering your questions: RMDs for 2020
I’ve been answering listener questions about the COVID-19 crisis here on the podcast. And this week, I received several questions about the new suspension of required minimum distributions for retirement accounts under the CARES Act, passed by Congress last week. No one needs to take an RMD for 2020, and there are a couple little twists and turns for people who may have already taken them. Joining me on the podcast to answer these question is IRS expert Ed Slott; if you are looking for guidance on this issue, just skip ahead to the 44 minute mark. Ed has a useful article on RMDs at the AARP website.
Send in your questions on retirement and COVID-19
Like everyone else, I’ve been struggling to adjust to the new realities that are dawning in our country and our world. And like a lot of people, I’m trying to figure out how to be useful to others. Fortunately, I practice a craft dedicated to providing quality, fact-checked information - and that can be invaluable in a crisis. I’m pivoting much of my work toward coverage of COVID19 and how it impacts older Americans, and I want to be sure to answer the questions that are on your mind.
One way I’m going to be doing that is through a question hotline. You can give me a call and leave a message with your question. I’ll try to answer your question in a future edition of my podcast and newsletter, or in an article for one of the other news outlets that I write for.
I’m not an expert on health care, so I won’t be answering questions on that. But I am well positioned to answer questions about this crisis as it relates to topics like Social Security, Medicare and other insurance questions, and personal finance issues related to retirement. I also write about topics like careers in later life and volunteering.
If you want to submit a question, call me on this number and leave a message: (847) 238-2015. Please include your name and a phone number where you can be reached if I have follow-up questions for you. If you prefer to remain anonymous, leaving your first name only is fine.
You also can use this link to submit a question through my website. Click on “Contact” near the upper right corner of the page.
About those $1,200 government checks for Social Security beneficiaries
A fracas erupted this week when the IRS indicated that Social Security beneficiaries who don’t file tax returns would need to do so in order to receive their $1,200 stimulus checks. That’s many millions of Social Security recipients, and the IRS stated earlier in the week that these folks would “need to file a simple tax return" to receive their checks.
That was at odds with the intent of Congress; the CARES Act gave the U.S. Treasury permission to use Social Security records and payment set-ups to make payments automatically. When I was reporting on this last week, the speculation was that the $1,200 would simply be added to monthly electronic benefit payments.
After protests erupted, the government backtracked. The automatic payments will take place after all. Learn more about it here.
But the Trump administration is still taking the position that recipients of Supplemental Security Income and veterans pensions file a tax return, unless they are also Social Security beneficiaries:
This requirement that a tax return be filed has been used before, and the result was that many miss out on the payment inadvertently. When stimulus checks were distributed in 2008, it seems that about 3.5 million Social Security beneficiaries and veterans never received the checks.
Scams continue - be careful out there
Fraud watchdogs warn that Social Security and Medicare scammers are taking advantage of the crisis to ramp up identity theft and other fraud schemes. I can’t even begin to fathom the depth of this depravity, but I can pass along warnings to you.
Here’s an article from the Associated Press on what’s going on with Medicare fraud. And journalist Mary Beth Franklin notes the latest:
COVID-19 and retirement roundup: What else I’m reading
The question we should have been asking all along about risk . . . States are beginning to move COVID-19 patients to nursing facilities from hospitals . . . Some older workers who can’t work from home face COVID-19 risks . . . how financial plans must adapt to market crashes. So much for the OK Boomer meme: thousands of retired healthcare workers join the fight against COVID-19 .
Subscribe to the newsletter
If you haven’t subscribed to the free edition, give it a try if your finances permit in this tough economy. You’ll be supporting independent journalism dedicated to covering what matters for older Americans. Subscriptions cost $5 per month or $60 year, and you can cancel at any time.
If not, no worries - I’m committed to providing everything I’ve got on the coronavirus crisis in the free edition for as long as this lasts.
Subscribe at retirementrevised.substack.com
This week on the podcast, I’m answering your questions about how the coronavirus crisis impacts retirement. I recently opened up a voicemail box that listeners (and newsletter subscribers) can use to ask questions - and I’m going to keep doing that as the crisis goes on.
On this week’s program, I tackle these questions submitted by listeners:
My husband lost his job recently - should he roll over his 401(k) to an IRA?
What will the impact of the crisis on the Social Security and Medicare trust funds?
Does dollar cost averaging work work with active mutual funds?
Can I delay an IRA contribution until July, now that the IRS has pushed back the deadline for filing tax returns to that date?
Should I plan to delay my retirement a couple years, if I can make that work?
I’ll be recruiting top experts to answer your questions, and I’ll answer a few on my own, too. This week, we get expert input from:
Sheryl Garrett, founder of the Garrett Planning Network;
Jeff Ptak, the head of global manager research at Morningstar;
Ed Slott, the well-known expert on IRAs
Paul Van Der Water, senior fellow at the Center on Budget and Policy Priorities
Do you have a question for me?
The number to call is 847.238.2015. Leave your name and a phone number where you can be reached in case I need to get further clarification on your question. If you want to leave only a first name, that’s fine. I may use your question on a future edition of the podcast. You can also email your question here.
How Medicare is updating coverage during the crisis
If you’re on Medicare, the program already covers much of what you may need if you contract the coronavirus and become seriously ill. But Medicare also has expanded some services and loosened some rules in response to the crisis. In a story for The New York Times this week, I take a look at at what enrollees can expect from Medicare, some problems to look out for and some additional changes that advocates think still need to be made.
If you recently lost your job . . .
One point I explore in the Times story is how to sign up for Medicare if you’ve been working past age 65 and recently lost your job. The paperwork is a bit complicated right now because of the closure of Social Security field offices.
If you are younger than age 65 and now out of work, check out this Times Upshot column, which walks through the options. These may include COBRA, special Obamacare exchange enrollment opportunities and Medicaid.
Scammers take no holiday during the crisis
Fraud watchdogs warn that Social Security and Medicare scammers are taking advantage of the crisis to ramp up identity theft and other fraud schemes. I can’t even begin to fathom the depth of this depravity, but I can pass along warnings to you.
Here’s an article from the Associated Press on what’s going on with Medicare fraud. Give your Medicare number only to participating Medicare pharmacists, doctors or people you trust to work with Medicare on your behalf. The agency will not call you to ask for your Medicare number or to check on it.
Medicare’s website offers tips for protecting yourself against fraud; the Federal Trade Commission’s website has a page of tips on Covid-19 and scams. And the national network of federally funded Senior Medicare Patrols also can help.
On Social Security, the closing of field offices has opened up some opportunities for fraud, too. More on that here.
What’s in the stimulus bill related to retirement?
The Senate’s $2 trillion stimulus bill (the CARES Act) is expected to pass the House on Friday, and then be signed into law quickly by President Trump. It contains several provisions related to retirement saving:
Enrollees in Social Security retirement and disability benefits will receive the same one-time $1,200 stimulus payments that are being sent to most adults, subject to the same income limitations ($75,000 in adjusted gross income for single filers and $150,000 for joint filers).
The current limit on loans from 401(k) accounts and other tax-deferred retirement plans will double to $100,000 for participants diagnosed with the coronavirus or who are affected by related economic losses. Participants with existing loans can delay any repayments due in 2020 for one year.
People affected by the virus or related economic circumstances will be able to take withdrawals from workplace plans and IRAs up to $100,000 this year without the usual 10% penalty due for people under age 59-1/2. Income taxes are still due on the withdrawn amounts, but the law allows you to spread out this liability over three years. You also have the option to redeposit the withdrawn sums during that period.
The law suspends the need to take required minimum distributions (RMDs) from tax-deferred accounts for retirees, or others who have inherited an IRA.
Medicare Part D plans must list restrictions on extended supplies of prescription medications during the crisis
For more details, see my column for Reuters this week. Also see this Morningstar video interview with IRA expert Ed Slott.
And, the stock market
Oh, right - the stock market is a mess too. John Rekenthaler of Morningstar has had two excellent coluns of late: When will stocks recover, and It’s hard to make money as a bear.
Free financial planning help on offer
The New York Times has created an online hub for financial help during the crisis that will be updated regularly. Already, the hub contains articles on how unemployment insurance works; who and what the new paid leave law covers; how to pause federal student loans; income tax filing deadline extensions and more.
One section I found especially interesting includes links to financial planners who are offering free advice to people experiencing financial stress.This includes dozens of members of the XY Planning Network; the Financial Planning Association has its own list of volunteer certified financial planners as well.
A bit of relief during lock-down: Virtual concerts, plays, and other culture you can enjoy from home
Nothing can replace live concerts, plays, museum visits or other cultural events, but plenty of cultural experiences are available online. CNN pulled together a great list of concerts, museum tours and other virtual experiences you can explore from home.
Coronavirus roundup: Other things I’m reading this week
What to do if you or a loved one might have the coronavirus . . . How to think about the risk if you’re over age 60 . . . .Eleven states and Washington D.C. opened up special enrollment to allow uninsured sign up for Obamacare . . . Why hospitals don’t have capacity to deal with overflow demand in a pandemic . . . One New Yorker’s coronavirus test: 5 days, a dozen calls, hours of confusion . . . A war footing: surfing the curve of COVID19 . . . Healthy living tricked boomers into thinking we’re invincible: The generation that’s redefining old age is now being redefined by a virus . . .The tech headaches of working from home and how to deal with them . . . Coronavirus is destroying older Americans’ retirement dreams.
Subscribe to the newsletter
If you haven’t subscribed to the free edition, give it a try if your finances permit in this tough economy. You’ll be supporting independent journalism dedicated to covering what matters for older Americans. Subscriptions cost $5 per month or $60 year, and you can cancel at any time.
If not, no worries - I’m committed to providing everything I’ve got on the coronavirus crisis in the free edition for as long as this lasts.
Stay safe and stay well - I’ll see you next week.
Subscribe at retirementrevised.substack.com
Good morning -
Like everyone else, I’ve been struggling to adjust to the new realities that are dawning in our country and our world. And like a lot of people, I’m trying to figure out how to be useful to others. Fortunately, I practice a craft dedicated to providing quality, fact-checked information - and that can be invaluable in a crisis. I’m pivoting much of my work toward coverage of COVID19 and how it impacts older Americans, and I want to be sure to answer the questions that are on your mind.
One way I’m going to be doing that is through a question hotline. Starting today, you can give me a call and leave a message with your question. I’ll try to answer your question in a future edition of my podcast and newsletter, or in an article for one of the other news outlets that I write for.
I’m not an expert on health care, so I won’t be answering questions on that. But I am well positioned to answer questions about this crisis as it relates to topics like Social Security, Medicare and other insurance questions, and personal finance issues related to retirement. I also write about topics like careers in later life and volunteering.
If you want to submit a question, call me on this number and leave a message: (847) 238-2015. That’s (847) 238-2015. Please include your name and a phone number where you can be reached if I have follow-up questions for you. If you prefer to remain anonymous, leaving your first name only is fine.
You also can use this link to submit a question through my website.
If you haven’t subscribed to the weekly newsletter yet, please do so - I think you’ll find it a valuable resource for staying informed. I offer both paid and free subscriptions, and I’m distributing all COVID19 information in both editions. Click the little green button below, or go here to learn more.
Thanks, and I’ll see you next week.
Mark
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This week on the podcast, we’re going to talk about stock market volatility and risk with two financial planning experts who deal with both on a regular basis as they work with clients. As of this writing (Wednesday), the S&P 500 is down nine percent - and that’s just today. The S&P is down about 25 percent from its peak in February and there’s no reason to think the market won’t fall further before it stabilizes.
In some respects, this episode is about fear. Plenty of retirement investors are experiencing it - fear about the market’s volatility, and the risks that poses to their retirement. And even more important is our fear about the future health of the economy, which is headed toward a steep recession induced by the health crisis.
My guests are two experienced financial planners. Allan Roth is the founder of Wealth Logic. Allan has been working in the investment world for decades in both corporate and personal finance. Also joining me is Jay Abolofia, founder of Lyon Financial Planning. Another interesting thing - Jay has an Ph.D. in applied economics. So, he brings a perspective to this that goes beyond just the markets.
Listen to my conversation with Allan and Jay by clicking the player icon at the top of this newsletter page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Separately, check out my Reuters column this week on the same topic, and this one for The New York Times last week on market risk. The story poses this question: what if you just want to get out of the market entirely? Is that advisable? (Spoiler alert: my answer is “no.”)
Coronavirus forces Social Security to close its offices
The coronavirus crisis forced the Social Security Administration to close its network of more than 1,200 field offices to the public this week. The offices help thousands of people every day with applications for retirement, disability and Medicare benefits.
Field offices will be closed to the public in most situations until further notice because of the coronavirus public health crisis, administration officials said. Offices that hear disability insurance appeals also are closed.
Most employees will be working remotely; service will continue to be available via the agency’s toll-free line, (800) 772-1213, and its website. Payments to more than 69 million Social Security beneficiaries are not affected.
Keeping the offices open was a threat to the public’s health and that of the agency’s work force. Visitors often experience long waits in rooms filled with dozens of people — most often, seniors and disabled people, who are among those most at risk from the virus. Cleaning of the offices is minimal.
Field offices will only offer in-person assistance for a very short list of crucial services. These include reinstatement of benefits in dire circumstances; assistance to people with severe disabilities, blindness or terminal illnesses; and people in dire need of eligibility decisions for Supplemental Security Income or Medicaid eligibility related to work status. Those seeking these services must call in advance.
For all other services, you’ll need to use the toll-free number or the website.
In The New York Times earlier this week, I detailed the ins and outs of how business can be conducted going forward with Social Security. A topic of special concern now is scams - it’s sad to say, but fraudsters working identity theft schemes are likly to try to take advantage of the heightened phone traffic that will be going on between Social Security and claimants. So, pay careful attention to the info in that Times story on that subject, and also consult this separate piece about Social Security fraud.
Why Coronavirus is nothing like the flu
No serious public health expert thinks that comparisons of COVID19 with garden variety flu are valid. Here’s Charles Ornstein of Propublica:
As Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, and others have said, COVID-19 is deadlier than the flu. It’s deadlier for young adults. It’s deadlier for older adults. In China, early data shows that it was 10 times deadlier. This chart from Business Insider compares U.S. flu deaths to deaths in China from COVID-19.
The flu kills less than 1% of infected people who are over age 65. By comparison, in China, COVID-19 killed 8% of those infected who were 70-79 and almost 15% of those infected who were age 80 or older.
A primer on annuities
The annuities market is plagued by an assortment of opaque names for its products. Look under the hood of the industry and you will find that some annuities are fairly easy to understand while others are not. Lately, the most complex ones seem to sell best.
How to navigate the annuities landscape? Let’s get out the maps.
Roundup of important coronavirus developments
The risk of contracting the coronavirus and becoming ill with COVID-19 is highest for older Americans. One thing I do every week as a journalist covering retirement aging is to sift through hundreds of articles and research reports, and right now virus news is everything. Each week in the newsletter, I’ll be curating and passing along the best information I can find for readers. My aim here is not quantity, but quality. We’re all being inundated with information right now, so I’m doing my best to send along only the stories I think are must-know and that come from information sources I know are rock solid.
This week’s news:
NPR: Nursing homes brace for coronavirus threats . . .How well does a particular nursing home stack up on fighting infections? . . . . The Trump administration has been working to relax regulations governing America’s nursing homes, including rules meant to curb deadly infections among elderly residents . . . The federal government has lifted restrictions on telemedicine to make it easier for physicians to interact with patients during the crisis . . . Married couples have different styles of coping with crisis . . . In the age of Covid-19, we’re all getting a taste of social isolation many older adults experience daily . . . As coronavirus surges, programs struggle to reach vulnerable seniors living at home.
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This week on the program, we’re going to attempt to untangle the annuities market. They come in an almost unbelievably complicated array of flavors and types, and their contracts can be very difficult to understand.
But before we get to that, I wanted to share a few thoughts with you about the coronavirus.
The pandemic puts everyone at risk, but older people are the most vulnerable. As a journalist covering aging, I’m mindful of that, of course. And, I’m starting to carefully reorient my coverage to do the best I can to provide useful information to readers of my stories, and people who listen to the podcast. I’m looking at this as a health story of course, but also a financial security story due to the massive impact of the crisis on the markets and most likely, the economy. The virus is starting to reshape conditions here in the U.S. and around the world that we’re barely starting to understand.
One thing I know I can do is pass along useful, authoritative information. As a journalist, I sift through hundreds of news articles, research reports, podcasts and video interviews every week. I plan to pass along the most credible, authoritative information I can find every week in the newsletter - both the subscriber and free editions. This week, scroll down a bit and you’ll find a post with links to advice for older adults from the CDC, and an interview with Dr. Anthony Fauci of NIH on the podcast of the Journal of the American Medical Association — also, an article about how the virus is impacting nursing homes.
You can also look for an article from my in this Sunday’s New York Times business section about how retirement investors can cope with their worst instincts during the current market meltdown. I’ll have a link to that story in next week’s newsletter.
So, back to annuities. Most people think of them as a way to provide guaranteed lifetime income in retirement - and you certainly can achieve that goal. But others really are more like investment products with optional income conversion features.
Annuity sales have been rising. Some of that is driven by the country’s demographics - as baby boomers reach retirement age, buyers are attracted by protection from the volatility of stocks. That last point seems especially salient considering the way the stock market has been nose-diving over the last couple weeks.
I don’t think annuities are right for everyone. Not even close to everyone. But they make sense in some situations, so this week I invited one of the most knowledgeable observers of the annuity marke that I know to join me on the podcast - Kerry Pechter.
Kerry is editor and publisher of the Retirement Income Journal, which covers the industry. He also is author of Annuities for Dummies. Like most books in the well-known Dummies series, Kerry’s book provides easy-to-grasp explanations of the various annuity types and how they work. So, if you are thinking about an annuity, get Kerry’s book.
But first, give a listen to my interview with Kerry Pechter.
Roundup of news and information on COVID-19
The risk of contracting the coronavirus and becoming ill with COVID-19 is highest for older Americans. I’ll be curating and passing along the best information I can find each week to readers of the newsletter during this crisis.
Here’s a short video overview from the Centers for Disease Control on what older adults need to know.
And here’s an interview on the spread of the virus with Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, conducted by Dr. Howard Bauchner, editor of the Journal of the American Medical Association.
Nursing homes: With the deaths of 18 residents in a nursing home in Washington state, industry leaders recommended strict limits this week on visits at facilities across the country, according to the The New York Times:
Thousands of nursing homes and assisted-living centers across the United States are becoming islands of isolation as health care administrators take unprecedented steps to lock them down, hoping to protect some of the nation’s most vulnerable residents from the threat posed by the coronavirus.
On Tuesday, industry leaders recommended curtailing all but essential visits at homes across the country, calling the challenge posed by the novel coronavirus “one of the most significant, if not the most significant” issues the industry has ever faced. Five long-term care facilities in Washington State have been hit, but officials worry the virus could already have spread to far more facilities with still-undetected cases.
“The mortality rate is shocking,” said Mark Parkinson, president and chief executive of the American Health Care Association. He said the death rate might well exceed the 15 percent that had been reported in China for people aged 80 and older.
What should you do if you or a family member are living in a nursing home or assisted living facility, or may need to go to a skilled nursing facility after a hospital stay? Howard Gleckman, an expert on long-term care, offers these thoughts in a post for Forbes.com:
There is a lot to think about, but experts have two main pieces of advice:
Don’t panic. The risk of contracting COVID-19 remains very low.
Make sure the facilities are practicing good infection control—something they should be doing all the time, regardless of the immediate news.
No doubt, residents of care facilities are at high risk for severe illness or even death if they contract COVID-19, the disease caused by the novel coronavirus. And the multiple deaths at a Kirkland, WA nursing home only raised those concerns.
To learn if a specific facility is doing it right, you can ask a few basic questions. The Centers for Disease Control has a simple factsheet for consumers called the “Top 10 Infection Prevention Questions to Ask a Nursing Home’s Leaders.”
New guide: How to time your retirement
If you’re a paid subscriber to the newsletter, you know I’ve been publishing a series of guides on key retirement topics.
The latest is a guide on timing retirement decisions. This can be a really important inflection point for your financial success in retirement, so it’s worth thinking about carefully.
The last years of work usually are peak earning years. And working even a few years more years - or less - will impact your retirement math significantly. Your timing affects the number of years that you’ll rely on savings to meet living expenses. It impacts the number of years that you can contribute to retirement saving accounts. And perhaps most important, working longer helps sets the stage for a delayed Social Security claim. That’s because it provides the income you need to meet living expenses while you wait to file.
But setting a retirement target date and sticking to it can be very difficult . . . even risky.
About one-third of workers tell pollsters they plan to work well past traditional retirement age, or not retire at all. But the data also tell us that about one-third of workers retire earlier than expected - and that the farther out you push your target date, the less likely you are to work to that date.
The most common causes for unexpected early retirement are health problems and job loss. But the study uncovered clear reasons for unplanned early retirement only in about one-quarter of cases.
Other reasons are more difficult to measure. The pull of leisure activities and time with family are factors, along with possible age discrimination. But the quality of work also matters.
The guides are downloadable, quick reads, each paired with a podcast interview on the subject at hand. My aim is to create a series of just-in-time retirement education modules - read the guide, listen to the podcast and you’re good to go. The series already includes guides on claiming Social Security, transitioning to Medicare and how to hire a financial planner.
Becoming a subscriber is easy - to sign up, click the little green button at the bottom of the newsletter page, or visit my website to learn more. The subscription price is just $5 month, and you can cancel easily at any time if you’re not happy. Once you subscribe, you’ll have access to the entire retirement guide series, including this new one on retirement timing. Plus, you’ll get links to all the articles I publish for Reuters, The New York Times, Morningstar and Wealthmanagement.com. I also publish links to the most interesting new research in the field, and links to work by other journalists that I find compelling.
Finally, you’ll be supporting independent, unbiased journalism.
Thanks for listening - and I hope to see you over on the subscriber side soon.
Subscribe at retirementrevised.substack.com
Here’s a wonky-sounding phrase: “asset location.”
But the meaning is simple - and important. Asset location refers to the type of accounts you use to hold investments in stocks, bonds and cash in order to reduce the drag of taxes. It’s something to consider during the years when you accumulate savings, and also after you retire and draw down funds.
Joining me on the podcast this week to explain asset location is Christine Benz, director of personal finance for Morningstar and senior columnist for Morningstar.com. In that role, Christine focuses on retirement and portfolio planning for individual investors. She also co-hosts Morningstar’s podcast The Long View, which features in-depth interviews with thought leaders in investing and personal finance.
The idea with asset location is that you’re being thoughtful about which types of assets you put in which types of accounts- tax-deferred, Roth and taxable accounts. The fit of these account types from a tax standpoint can make a difference in how much you keep or pay in taxes. It is one of the things about investing and saving that you can control, at least a bit - so it’s worth doing.
A key element of this is tax diversification during your accumulation phase - making sure you don’t have all of your assets in one basket. Most of us accumulate in 401(k) accounts, but Christine lays out ways to diversify along the way, such as using a Roth K option. Then, we shifted our discussion to what people who are near retirement, or already retired, can do to diversify.
Listen to the podcast by clicking the player icon at the top of this page. You also can find the podcast on Apple Podcasts, Spotify and Stitcher.
Watch: A chat about traditional Medicare versus Advantage
Speaking of Christine Benz and Morningstar, I stopped by there last week to chat with Christine about my recent New York Times column on the rising privatization of Medicare. Click here to view our conversation.
New guide: How to time your retirement
If you’re a paid subscriber to the newsletter, you know I’ve been publishing a series of guides on key retirement topics.
The latest was just issued last month - a guide on timing retirement decisions. This can be a really important inflection point for your financial success in retirement, so it’s worth thinking about carefully.
The guides are downloadable, quick reads, each paired with a podcast interview on the subject at hand. My aim is to create a series of just-in-time retirement education modules - read the guide, listen to the podcast and you’re good to go. The series already includes guides on claiming Social Security, transitioning to Medicare and how to hire a financial planner.
Becoming a subscriber is easy - to sign up, click the little green button at the bottom of the newsletter page, or visit my website to learn more. The subscription price is just $5 month, and you can cancel easily at any time if you’re not happy. Once you subscribe, you’ll have access to the entire retirement guide series, including this new one on retirement timing. Plus, you’ll get links to all the articles I publish for Reuters, The New York Times, Morningstar and Wealthmanagement.com. I also publish links to the most interesting new research in the field, and links to work by other journalists that I find compelling.
Finally, you’ll be supporting independent, unbiased journalism.
Thanks for listening - and I hope to see you over on the subscriber side soon!
Subscribe at retirementrevised.substack.com
Financial planners are sort of like money doctors - but what if your planner actually was a physician? That’s the unique biography of my guest on the podcast this week - Dr. Carolyn McClanahan.
Carolyn is a physician turned financial planner. She became interested in planning when her husband inherited some money - and wanted to make some career moves that would require him to accept a lower income. The couple set out to find some financial planning help, but they were dissatisfied by what they found.
One thing led to another, and these days Dr. McClanahan runs her own financial planning practice in Florida, called Life Planning Partners. She also has emerged as a leader in the planning profession, in part because of her unusual blend of professional expertise. Carolyn speaks and writes regularly at conferences and writes for Forbes and Financial Planning Magazine. You can find her quoted regularly in the Washington Post, New York Times, CNBC, and NPR; I have turned to her for insights in plenty of stories I’ve written in recent years. Dr. McClanahan brings a fresh, provocative perspective to a range of topics where health and financial issues intersect - everything from chronic illness to end of life, long term care, health care reform, and health care costs.
I asked Carolyn to tell the story of her unusual journey from practicing medicine to providing financial advice. We also talked about how the financial planning field has changed over the past two decades, how she thinks about health - and health care expenses - in the context of retirement plans, and how to select Medicare plans. Finally, I asked Dr. McClanahan for her thoughts on health care reform and proposals for Medicare for All.
Listen to my conversation with Carolyn McClanahan by clicking the player icon at the top of the newsletter. You also can access the podcast on Apple Podcasts, Spotify and Stitcher.
New guide: How to time your retirement
If you’re a paid subscriber to the newsletter, you know I’ve been publishing a series of guides on key retirement topics.
The latest was just issued last week - a guide on timing retirement decisions. This can be a really important inflection point for your financial success in retirement, so it’s worth thinking about carefully.
The last years of work usually are peak earning years. And working even a few years more years - or less - will impact your retirement math significantly. Your timing affects the number of years that you’ll rely on savings to meet living expenses. It impacts the number of years that you can contribute to retirement saving accounts. And perhaps most important, working longer helps sets the stage for a delayed Social Security claim. That’s because it provides the income you need to meet living expenses while you wait to file.
But setting a retirement target date and sticking to it can be very difficult . . . even risky.
About one-third of workers tell pollsters they plan to work well past traditional retirement age, or not retire at all. But the data also tell us that about one-third of workers retire earlier than expected - and that the farther out you push your target date, the less likely you are to work to that date.
The most common causes for unexpected early retirement are health problems and job loss. But the study uncovered clear reasons for unplanned early retirement only in about one-quarter of cases.
Other reasons are more difficult to measure. The pull of leisure activities and time with family are factors, along with possible age discrimination. But the quality of work also matters.
The guides are downloadable, quick reads, each paired with a podcast interview on the subject at hand. My aim is to create a series of just-in-time retirement education modules - read the guide, listen to the podcast and you’re good to go. The series already includes guides on claiming Social Security, transitioning to Medicare and how to hire a financial planner.
Becoming a subscriber is easy - to sign up, click the little green button at the bottom of the newsletter page, or visit my website to learn more. The subscription price is just $5 month, and you can cancel easily at any time if you’re not happy. Once you subscribe, you’ll have access to the entire retirement guide series, including this new one on retirement timing. Plus, you’ll get links to all the articles I publish for Reuters, The New York Times, Morningstar and Wealthmanagement.com. I also publish links to the most interesting new research in the field, and links to work by other journalists that I find compelling.
Finally, you’ll be supporting independent, unbiased journalism.
Thanks for listening - and I hope to see you over on the subscriber side soon.
Can you pass this Social Security quiz?
My column for WealthManagement.com this month is a quick, fun quiz on Social Security basics. It’s written with financial planners in mind, but I encourage everyone to take a spin and see how you do. Among the questions:
Everyone’s working longer—right? So, what is the average age that Americans file for Social Security?
What’s the better deal—filing for Social Security early or delaying a claim past full retirement age (FRA)?
Are the pre-FRA reductions equal to the post-FRA credits?
Will your Social Security retirement benefits replace the same amount of pre-retirement income for my clients in 2035 as they do today?
Good luck!
Where else can you find the podcast?
The podcast always is embedded in the newsletter (free and for subscribes). You also can find it on several of the most popular podcast platforms, including Apple Podcasts, Spotify and Stitcher.
If you do subscribe there, please leave a rating and comment to let me know what you think - it’s an easy way to help build the program’s audience.
Subscribe at retirementrevised.substack.com
The podcast is a bit shorter than usual this week - on this special, brief edition, I’m rolling out my latest retirement guide. This one focuses on the issues surrounding the timing of retirement.
If you’re a subscriber to the newsletter, you know I’ve been publishing the guides on a regular basis. These are downloadable, quick reads paired with a podcast interview on the subject at hand. My aim is to create a series of just-in-time retirement education modules - read the guide, listen to the podcast and you’re good to go. The series already includes guides on claiming Social Security, transitioning to Medicare and how to hire a financial planner.
Becoming a subscriber is easy - to sign up, click the little green button at the bottom of the newsletter page, or visit my website to learn more. The subscription pricce is just $5 month, and you can cancel easily at any time if you’re not happy. Once you subscribe, you’ll have access to the entire retirement guide series, including this new one on retirement timing. Plus, you’ll get links to all the articles I publish for Reuters, The New York Times, Morningstar and Wealthmanagement.com. I also publish links to the most interesting new research in the field, and links to work by other journalists that I find compelling.
Finally, you’ll be supporting independent, unbiased journalism.
Why a guide on the timing of retirement decisions? Simply put, this can be a really important inflection point for your financial success in retirement, so it’s worth thinking about carefully.
The last years of work usually are peak earning years. And working even a few years more years - or less - will impact your retirement math significantly. Your timing affects the number of years that you’ll rely on savings to meet living expenses. It impacts the number of years that you can contribute to retirement saving accounts. And perhaps most important, working longer helps sets the stage for a delayed Social Security claim. That’s because it provides the income you need to meet living expenses while you wait to file.
But setting a retirement target date and sticking to it can be very difficult . . . even risky.
About one-third of workers tell pollsters they plan to work well past traditional retirement age, or not retire at all. But the data also tell us that about one-third of workers retire earlier than expected - and that the farther out you push your target date, the less likely you are to work to that date.
The most common causes for unexpected early retirement are health problems and job loss. But the study uncovered clear reasons for unplanned early retirement only in about one-quarter of cases.
Other reasons are more difficult to measure. The pull of leisure activities and time with family are factors, along with possible age discrimination. But the quality of work also matters.
In this podcast, I talk with several career experts on how to best navigate the job market and control your employment destiny.
Thanks for listening - and I hope to see you over on the subscriber side soon.
Is government tipping the scales in favor of Medicare Advantage?
Medicare Advantage is growing quickly — enrollment is expected to jump to 47 percent in 2029 from 34 percent this year, according to a Kaiser analysis of Congressional Budget Office projections.
Some of the growth stems from heavy investment by health insurance companies in geographic expansion and marketing via television and direct mail. Moreover, the industry points to high rates of consumer satisfaction with Advantage plans.
But the rise of Advantage also has been aided by changes in federal law and regulation over the past two decades that favor the program. And under the Trump administrations, critics say, Medicare’s administrators have been tipping the scales improperly in favor of Advantage.
Advantage’s growth has occurred without much debate in the public policy arena about the effects of such large-scale privatization on the long-range health outcomes for patients such as Mr. Stein, and on the costs to both government and enrollees.
This weekend in The New York Times, I examine whether government is tipping the scales improperly in favor of Medicare Advantage.
Other recommended reading this week
Strategies to mitigate the (partial) death of the stretch IRA . . . Steps women can take to improve their retirement outlook . . . A closer look at the Democratic Presidential candidates’ long-term care plans.
Subscribe at retirementrevised.substack.com
Remember the phrase “greedy geezers?” That was former Wyoming Senator Alan Simpson’s memorable description back in 2012 of seniors who receive Social Security. Simpson was co-chair back then of a bipartisan presidential commission on how to cut the federal deficit. The commission had recommended cuts to Social Security benefits as part of its deficit solution. That prompted a bit of a verbal firefight between Simpson - who always is colorful with his language - and advocates for seniors. Simpson called one seniors’ group nothing more than “greedy geezers” stealing from young people “who are going to get gutted.”
It was a good example of the colorful language of so-called “inter-generational warfare” -- pitting generations against one another with divisive zero-sum-game economic arguments.
That kind of rhetoric might be useful for some politicians, but it is economic nonsense. Families don’t live in economic silos, separated from one another, and some recent evidence shows that a large segment of the senior population is anything but greedy. In fact, they are struggling to meet basic living expenses - and the economic pain filters down to younger family members.
Consider a recent survey by AARP that found one-third of midlife adults with at least one living parent provide financial support to them. More than half provided $1,000 or more to their parents in the last year. Within that group, 34% provided up to $5,000, and 13% as much as $10,000.
The support goes mainly to help meet living expenses, such as groceries and medical costs.
These figures really are just the tip of the iceberg. A deeper dive into the data on elders and poverty show that the number of older households coping with financial stress is much larger than typically understood.
Joining me on the podcast this week to explore this is Jan Mutchler. She’s a professor of gerontology at the University of Massachusetts Boston. She works with the university’s Gerontology Institute, which produces something called the Elder Index. The index measures the cost of living for older people, looking at their typical budgets and income, adjusted for regional variations.
If you live below the Index, it means you don’t have the resources needed to meet basic living needs. The institute recently released new data for 2019, and it shows that half of Americans over age 65 living alone have incomes that are below the index . . .and the comparable figure for couples is 23%.
Those figures are shocking, and they are much more dire than the federal measure of poverty that are used to establish eligibility for many state and federal assistance programs.
I talked with Jan about what drives these numbers, and what needs to be done to drive them down.
Listen to the podcast by clicking the player icon at the top of this page. The podcast also can be found on Apple Podcasts, Spotify and Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my weekly summary and analysis of key developments in retirement.
Subscribers also have access to my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
You’ve probably heard plenty of advice over the years about the benefits of working longer and delaying retirement. I write about this often, and I do believe it can be one of the best strategies for improving your retirement outlook. Working longer can help pay for living expenses while you wait to claim Social Security, boosting your annual benefits. It also can mean a few more years of retirement saving - and fewer years relying on savings.
But working longer isn’t always an easy thing to pull off. Research shows that about half the time, job loss, health problems or just plain burnout push people out of the workforce sooner than they expected.
On today’s podcast, we explore that last point - burnout. . . and how to go about adjusting your mindset about work toward the end of your career. The key elements of success include expanding your horizons, being flexible and open to changing your mindset about what kind of work is possible and satisfying.
One of my guests today has a great deal of interesting guidance to offer on this topic, because he’s a career coach, and he also operates Career Pivot, an online network for people navigating careers in the second half of life. Marc also has a terrific book, Repurpose Your Life, and he also hosts a podcast that carries the same name as his book. That’s the good news. Here’s the bad: his name is Marc Miller. I kid you not - on this podcast, Mark Miller interviews Marc Miller. So it goes - just try to follow the bouncing ball.
Also joining me is Russ Eanes. Russ worked for several decades in the book publishing business, and also has worked as a minister in the Mennonite Church. Around the time that he turned 60, Russ decided to bail out of his job after tiring of the tumultuous changes hitting the publishing world. He felt that his effectiveness on the job was falling, and he was getting very unhappy with all the downsizing of colleagues that he was being asked to do by his employer.
Then, a couple major life events shocked Russ into taking action that included a year-long sabbatical and a 500-mile trek on the Camino De Santiago in Spain, which is the subject of his recent book. Russ recently transitioned his career to full-time freelance work as a writer, editor and consultant in publishing. He also is a member of Marc Miller’s Career Pivot network.
Speaking of his book - if you live in Virginia, check out upcoming speaking appearances Russ will be doing on February 11th and 12th in and around Harrisonburg and Crozet.
Listen to the podcast by clicking the player icon at the top of this newsletter. You also can find the podcast on Apple Podcasts, Spotify and Stitcher.
Where do the presidential candidates stand on Social Security?
Heading into the debate in New Hampshire tonight, Social Security has not been a topic in any of the presidential forums. But no topic is more important to the well-being of today’s older voters - and younger workers who will rely on the program down the road.
This weekend in The New York Times, I examine where the major candidates stand on Social Security reform. All of the Democrats’ proposals include a fix for the program’s looming financial shortfall. The combined trust funds for Social Security’s retirement and disability programs are on course to be depleted in 2035; without changes, funding from payroll tax receipts will be sufficient to pay only 80 percent of currently scheduled benefits.
But all of the Democratic candidates go further than that, proposing expanded benefits - either across the board or targeted for vulnerable seniors.
Meanwhile, President Trump broke with Republican party orthodoxy on Social Security as a candidate in 2016, promising to oppose benefit cuts. And he reiterated that pledge in this week’s State of the Union address. But Democrats argue that one recent statement by the president signaled his openness to considering reduction.
And he provoked attacks from Democrats just last month following a CNBC interview at the recent World Economic Forum in Davos, Switzerland. Asked if entitlements will “ever be on your plate”, Mr. Trump replied that “at some point they will be.” Democratic candidates and Social Security advocates pointed to the exchange as evidence Mr. Trump would seek cuts to Social Security - and Medicare - in a second term.
To learn more, check out my “Retiring” column in The New York Times this weekend.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
Readers also get my weekly summary and analysis of key developments in retirement. This week, you’ll learn about several new reports on trends in longevity, how the new SECURE Act is impacting estate plans, and whether the coverage gap in Medicare Part D (the donut hole) has really closed.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
Congress passed important retirement legislation just before the holidays that has sent financial planners and tax professionals scrambling, because the law's impact on people with significant retirement savings is nearly immediate.
The SECURE ACT will have an important impact on the estate plans of people with large tax-deferred IRAs (often rolled over from 401k accounts). It eliminates the so-called "stretch" IRA, which allowed non-spouse beneficiaries to draw down inherited tax-deferred accounts over the course of their lifetimes. Heirs will now be required to draw down the entire account amounts within a 10-year window--a change that will have negative tax and financial-planning consequences in many cases.
Joining me on the podcast to talk about the changes - and how you can respond with some smart planning moves - is one of the nation’s best-known experts on IRAs. Ed Slott is known well to millions of public television viewers through his tv specials, and he’s also a best-selling author. His next book, Ed Slott's Retirement Decisions Guide: 2020 Edition, will be published early this year; his most recent public television special is Retire Safe & Secure! With Ed Slott.
Ed’s company provides IRA training to financial professionals, CPAs and attorneys, and his website offers free educational resources to consumers.
Listen to the podcast by clicking the player icon at the top of the newsletter page. Or, you can find the program on Apple Podcasts, Spotify and Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
Readers also get my weekly summary and analysis of key developments in retirement. This week, you’ll learn about several new reports on trends in longevity, how the new SECURE Act is impacting estate plans, and whether the coverage gap in Medicare Part D (the donut hole) has really closed.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
Listen now (41 min) | We’ve been devoting time on the podcast lately to rising retirement inequality in America. One part of this story that doesn’t get much attention is the role of traditional pensions in equalizing retirement outcomes - and my guest this week has plenty to say on that topic.
Subscribe at retirementrevised.substack.com
This week, we dig into one of the hottest topics in the investing world - how to do well by doing good. Sustainable investing has been growing rapidly over the past few years, but most of the action thus far has been among institutional and high-net worth investors. Here’s what I have been wondering: when will this break into the world of retirement investing?
My guest on the podcast is an expert on social investing - Meg Voorhes, director of research for US SIF: The Forum for Sustainable and Responsible Investment. Meg leads the production of US SIF’s biennial, flagship report, Sustainable and Responsible Investing Trends in the United States.
I wrote on the topic of social investing last fall for The New York Times. Broadly speaking, this category includes any investing motivated by a social purpose. The first waves came back during the 1960s era of shareholder activism, divestment initiatives and impact investing. The early fund offerings often focused on a single, narrow area of investments, or only on exclusion of specific investment categories, such as fossil fuels. More recently, we’ve seen the advent of funds that screen for environmental, social and governance factors — so-called E.S.G. investing. Most E.S.G. mutual funds rely on ratings systems that score securities for their exposure to indirect financial factors, including a company’s environmental impact, governance policies or how it treats employees or monitors its supply chains. The funds either underweight or eliminate securities that fund managers expect to have high risk associated with those factors, or tilt toward those that an investor believes will have a positive impact.
Morningstar reported this week that U.S. sustainable funds attracted new assets at a record pace in 2019. Estimated net flows into open-end and exchange-traded sustainable funds totaled $20.6 billion for the year; that's nearly four times the previous annual record for net flows set in 2018.
When will sustainable investing to start popping up in 401k plans? That question intrigues me for a couple reasons. First, I think sustainable investing is a great way for the market to signal to corporations that they must improve their performance on things like climate change, workforce diversity and management and general social responsibility. Making social investing options available inside 401k plans would be a very good thing, because this is where average investors have their money parked. And, there’s a lot of it - $8.5 trillion is sitting in in 401ks; by comparison, all sustainable investing amounts to just over $12 trillion.
Surveys show that workplace retirement savers are very interested in using their retirement savings to make the world better in areas like climate, gun control, tobacco abatement and reproductive rights. A Morningstar study published last year found that more than 70 percent of the United States population has “at least a moderate interest” in sustainable investing. The appetite is especially strong among younger workers: A Natixis survey of 401(k) plan participants last year found that 67 percent of millennials would be more likely to contribute, or increase their plan contributions, if they knew their investments were contributing to social good.
But less than 5 percent of 401k plans include sustainable mutual fund choices, and they hold less than 1 percent of total plan assets.
There are several important reasons for this. Retirement plan sponsors are required by law to offer investment choices that produce the best financial results for plan participants. That’s their fiduciary duty. A case is starting to build that you can, in fact, have your cake and eat it too - studies by Morningstar are finding that sustainable investing choices do as well as standard investments, and in some cases better. But that message is just starting to find its way into conversations with plan sponsors. And the guidance on this topic from regulators has anything but clear.
Then there are the facts on the ground in terms of how 401k plans are evolving. 401ks are very much the domain of target date funds these days. These are funds that automatically adjust your investment balance as you get closer to retirement, and they usually are composed of passive, very broad-based index funds. Vanguard projects that by 2023, 70% of participants in plans that it administers will be using target date series. So that statistic tells you everything you need to know here - if sustainable investing is going to take off, it needs to be blended into target date series.
That’s starting to happen, as I noted in my New York Times story. Ron Lieber, who writes the Your Money column at the Times, added another interesting perspective last week with a story examining what 401k participants can do to push their employers to add socially-responsible investment options to their plan menus.
I asked Meg to talk about what needs to happen next for sustainable retirement investing to get off the ground.
To listen to our conversation, click on the player icon at the top of this page. You also can access the podcast on Apple Podcasts, Spotify and Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
Readers also get my weekly summary and analysis of key developments in retirement. This week, it includes analysis of the latest polling of voters on Medicare for All, why we’re headed for a severe shortage of geriatricians to care for the elderly and an ill-advised plan to let ordinary retirement savers invest in risky private equity deals.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week on the podcast, we update some important developments out of Washington related to retirement that occurred just before the holidays.
Congress wrapped up the year passing a massive $1.4 trillion omnibus spending bill. Usually with legislation like this, a lot of unrelated legislation gets tacked on and moved through, and this was no exception.
One important piece of legislation was included in the bill - and another was not.
The bill that did pass is called the SECURE Act. It’s a grab-bag of retirement policy ideas that have been bouncing around Washington for a number of years. But it is important because it’s the only piece of significant retirement legislation to be passed in Washington since 2006, when the Pension Protection Act was signed into law. Laws like this really do make a difference over time. The PPA ushered in some major positive changes like the widespread adoption of target date funds and automatic enrollment of new workers in retirement plans.
My guest on the podcast this week will talk with us about what’s good about this bill from a financial services industry perspective. Melissa Kahn is managing director of retirement policy for the defined contribution team at State Street Global Advisors. She is an attorney with extensive experience in the world of employee benefits and regulation. Before joining State Street, she worked as a consultant in the industry and also for more than a decade working in the life insurance business. So she is going to give us a good idea of the arguments the industry has mounted in favor of this bill.
There really are two keys things to know about this law. First, it clears the way for a new type of 401k plan aimed at making it easier for small employers to offer retirement plans to workers. They are called open multiple employer plans - or MEPs for short. Small businesses are the least likely to offer plans, so the idea here is that small employers can join plans that would be offered by private plan custodians, like a Fidelity, Vanguard or Schwab. The hope is that small businesses will be enticed by low costs and streamlined paperwork, and an increased tax credit to cover their setup costs. The jury is out on whether that will really happen. I’ve written a number of stories on open MEPs over the last year or two and will include links to them in the subscriber edition of the newsletter this week.
Second, the SECURE Act contains a provision that makes it easier for 401k plans to offer annuities. It creates a so-called “safe harbor” that protects plan sponsors from legal liability if anything goes wrong with the insurance company offering the annuity. Instead, it relies on state insurance regulators to certify the safety of the annuity provider.
This is really where the SECURE ACT got its push - the insurance lobby has been salivating over this for years and wanted to see it get done.
Don’t get me wrong - a serious case can be made for some people to use annuities in retirement. But they’re not right for everyone. One worry here is whether there will be enough education for 401k participants on annuities, when to use them and how. Another major concern: what type of annuities will be offered? Consumer advocates urged Congress to limit the safe harbor in SECURE to cover only simple income annuities. They argued against including things like fixed-index and variable annuities are too complex and confusing for regulators to police, and for participants to understand. They lost on that point.
I do think we’re going to see a big push by the companies that administer plans to get annuities into workplace plans. Employers probably will take a conservative approach to it. But we’re already starting to see new products start to take shape, like target date funds with annuities built in. Expect to see more of that.
The SECURE Act also includes a couple other significant changes. It boosts the age when you need to start taking required minimum distributions from tax deferred accounts from 70 and a half to 72 and a half. And it phases out the use of stretch, or inherited IRAs. That last one has important implications for people with large tax-deferred accounts who hope to pass those assets on to heirs. (I’m working on a separate story about that which will be published soon.)
The second thing I wanted to mention about the omnibus spending bill is something that didn’t make it into the legislation. That is a fix for the looming meltdown in multiemployer pensions. Don’t confuse this with the multiple employer plans I just mentioned. This is very different. These are traditional pension plans created under collective bargaining agreements by groups of employers in industries like construction, trucking, mining and food retailing.
More than 100 multiemployer plans covering 1.4 million workers and retirees are underfunded and sponsors have told regulators and participants that they could fail within the next 20 years. The problem is worsening, but Democrats and Republicans in Congress haven’t been able to come up with a plan they can agree on. House Democrats passed a plan last July built around providing low-interest loans to struggling plans. But the Senate has a very different plan. It increases the insurance premiums that plan sponsors pay into the system, and adds new premiums that would be paid by retirees as well, which would effectively act as a benefit cut. It also contains reforms to the discount rate assumptions plans use to project the future health of plans.
So Congress is stuck, and by one analysis 44 plans will fail by 2025. They did manage to come up with a bailout for one fund that is on track to fail by 2022 - which is sponsored by the United Mine Workers of America plan. Having a powerful friend like Senate Majority Leader Mitch McConnell - from a big coal producing state - didn’t hurt in getting that done.
To hear my interview with Melissa Kahn, click the player icon at the top of the page. One word about this - we taped this discussion just before the holidays, as the Secure Act was headed for passage, so you’ll hear some discussion along that line at the start of our conversation.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
Readers also get my weekly summary and analysis of key developments in retirement. This week, it includes analysis of the latest polling of voters on Medicare for All, why we’re headed for a severe shortage of geriatricians to care for the elderly and an ill-advised plan to let ordinary retirement savers invest in risky private equity deals.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week, a panel of outstanding journalists joins me on the podcast to talk about how retirement has changed during the decade now ending. The topic has been on my mind lately, as I published a story in The New York Times last weekend examining the changes we’ve seen since 2010, when the economy was just beginning to recover from the financial crash and Great Recession.
Joining me are three colleagues on the aging beat:
Judy Graham, who writes the Navigating Aging column for Kaiser Health News. Judy was was a senior health correspondent for many years at the Chicago Tribune, and has written for the New York Times, Washington Post and Los Angeles Times, among many other publications.
Chris Farrell, senior economics contributor at Marketplace, American Public Media’s nationally syndicated public radio business and economic program. Chris also is an economics commentator for Minnesota Public Radio. His most recent book is Purpose and a Paycheck: Finding Meaning, Money, and Happiness is the Second Half of Life.
Richard Eisenberg, Managing Editor of Next Avenue, the public media site for people 50+, where he is also editor of its Money & Policy and Work & Purpose channels. Previously, Rich was Executive Editor of Money magazine, Front Page Finance Editor at Yahoo! and Special Projects Editor/Money Editor at Good Housekeeping. He is the author of the books How to Avoid a Midlife Financial Crisis and The Money Book of Personal Finance.
Reporting and writing the Times article prompted some reflection. I began to cover retirement just before the recession, and my first book, The Hard Times Guide to Retirement Security (2010) was published in the depths of the downturn. Those first few years on the beat, my reporting was very focused on the wreckage - the unemployment rate was high, the stock market was coming back and millions of workers were worried that their retirement plans were ruined.
How are we doing now? It’s a very mixed bag. The Times story considers the state of retirement security from the standpoint of saving and investing, health insurance, employment, housing and Social Security. The key finding:
Retirement in America has become a tale of two very different realities in the decade now drawing to a close.
In 2010, the economy was just beginning to recover from the worst recession and financial crisis in recent memory. The unemployment rate was high, the stock market was coming back and millions of workers were worried that their retirement plans were ruined.
Since then, a robust economic rebound has put some Americans back on solid footing for retirement, but progress has been uneven. Despite the gains made in employment, wage growth has only recently begun to recover — and remained flat for older workers. Retirement wealth has accumulated almost exclusively among higher-income households, while middle- and lower-income households have only held steady or lost ground, Federal Reserve data shows.
Trends in Social Security and Medicare also are troubling. The value of Social Security benefits — measured by the share of pre-retirement income they replace — is falling, and the cost of Medicare is rising.
Some of the most striking data comes from the Employee Benefit Research Institute, which has developed a model that simulates the percentage of households likely to have adequate resources to meet retirement expenses. The model considers household savings, home equity and income from Social Security and pensions.
The model shows that the highest-income households have seen their odds of a successful retirement improve sharply during this decade, and they have very high odds of success. Middle-income households, meanwhile, have seen some gains, but still have only 50-50 odds of success. And the lowest-income households have seen their retirement prospects diminish sharply.
This chart depicts the odds for boomers age 55-64 - the color bars represent different income quartiles (blue is lowest, yellow is highest). In 2019, the highest income households have a 93% chance of a successful retirement - up substantially since 2010, while the lowest had odds of just 11% - down substantially over that period.
This chart depicts the same divergent trend among GenXers:
A few things that I had hoped to discuss in the article wound up on the cutting room floor for space reasons, so I’ll mention them briefly here:
Consumer protection: The crash gave birth to the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, which called for sweeping reforms to financial regulation — including financial advice on retirement.
Dodd-Frank included language encouraging the Securities and Exchange Commission to adopt a uniform standard of fiduciary responsibility for brokers and advisers.
“That was the point when it seemed possible we’d soon have a strong standard of conduct across the broad range of investment advice for retail investors to be protected in retirement plans,” said Barbara Roper, director of investor protection for the Consumer Federation of America.
It wasn’t to be.
When the S.E.C. failed to act promptly, the Obama-era Department of Labor adopted its own fiduciary rule governing retirement accounts. That rule died in 2018 when courts sided with opponents in the financial services and insurance industries, ruling that the department had overstepped its authority. The Securities and Exchange Commission completed work this year on its so-called Regulation Best Interest, which defines standards for brokers who sell investment products and explains the duties of investment advisers who provide financial guidance. Many critics regard the S.E.C. regulation as too weak, relying too heavily on disclosure to clients of any conflicts of interest.
“One of the things that has really taken people by surprise in the S.E.C. rule is the degree to which they have adopted the weakest possible interpretation of the obligations investment advisers have as fiduciaries,” Ms. Roper said.
Shifting Social Security politics: The political debate about how to solve Social Security’s long-range financial shortfall shifted significantly during the decade.
In 2010, the bipartisan Bowles-Simpson presidential commission recommended changes that included further increases in the retirement age, a less generous cost-of-living adjustment and means testing for high-income workers.
In 2019, Democrats’ plans are built around higher taxes and expanded benefits — and President Trump campaigned in 2016 promising to oppose benefit cuts.
“The shift in the Democratic Party has been dramatic,” says Nancy Altman, president of Social Security Works, an advocacy group. “In contrast, the Republicans haven’t changed. They still want cuts and they still want to avoid accountability for those cuts.”
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The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week on the podcast, we take a look at caregiving. This is a big topic these days, but the conversation usually is focused around the consumer finance part of the story - things like long-term care insurance, and the rising cost of nursing home care.
On this program this week, we’re going to consider a different angle - the looming shortage of caregiver labor. This hasn’t received much media attention - yet. But its going to have a big impact on the United States in the years ahead.
There’s a growing body of evidence pointing to a dramatic shortage of care-giving labor. The aging of the nation is one part of the problem, since it accelerates demand.
But a big part of the labor crunch stems from bad policy, starting with the Trump administration’s crackdown on immigration, which is choking off the supply of caregiving labor. Another policy failure is that we have failed to ensure caregivers are paid and trained adequately—in other words, treating this work as an important, honorable occupation.
The looming labor shortage has implications for the cost of care. But it also means that more people will be pressed into care-giving service for family members during their working years. That will have a major impact on their careers and lifetime earnings . . . and on their retirement plans. This point is brought to life in this recent New York Times story about how caregiving responsibilities for parents are impacting millenials.
Joining me on the podcast this week is one of the nation’s top experts on the caregiving labor force. Robyn Stone is senior vice president of research at LeadingAge, a large professional and trade group representing the aging services field. She also co-directs a research center on long-term care at the University of Massachusetts in Boston. Dr. Stone holds a doctorate in public health from the University of California, Berkeley.
Earlier, Stone was executive director of the International Longevity Center, which was founded by the late Robert Butler, the renowned gerontologist and psychiatrist who did so much to revolutionize the field of aging. Dr. Butler was best known for coining the terms "ageism" and "longevity revolution.”
Robyn has written two excellent papers on this topic recently. One deals with workforce training issues, the other with approaches to developing a quality care-giving worforce.
On the podcast, Robyn and I talk about the looming shortages in the labor market for caregiving. We talked about the root causes, what it will mean for people who need these services - and some possible solutions.
Click on the player icon at the top of this page to hear our conversation.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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If you’ve ever experienced a long wait to get help from the Social Security Administration, the agency has some good news for you - the pace is about to pick up a bit.
Repeated cuts to the agency’s administrative budget over the past decade by Congress have forced the closing of field offices, staff cuts, and long delays on Social Security’s toll-free line - and an enormous backlog of people waiting for appeal hearings on disability insurance claims.
This week, the Social Security Administration announced that it will restore some previously-cut office hours in field offices, and more than 1,000 new employees to speed things up on its toll-free line and in its processing centers.
On this week’s edition of the RetirementRevised.com podcast, I talk with one of the nation’s top experts on the administrative workings of Social Security - Kathleen Romig, senior policy analyst at the Center on Budget and Policy Priorities. Click the player icon at the top of the page to hear our conversation.
You’ll find more on this subject in a post I wrote this week for NextAvenue.org.
Other ways to listen to the podcast
Prefer to listen to the program using your favorite podcast app? You also can find the program on Apple Podcasts, Spotify or Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
If you’ve ever experienced a long wait to get help from the Social Security Administration, the agency has some good news for you - the pace is about to pick up a bit.
Repeated cuts to the agency’s administrative budget over the past decade by Congress have forced the closing of field offices, staff cuts, and long delays on Social Security’s toll-free line - and an enormous backlog of people waiting for appeal hearings on disability insurance claims.
This week, the Social Security Administration announced that it will restore some previously-cut office hours in field offices, and more than 1000 new employees to speed things up on its toll-free line and in its processing centers.
On this week’s edition of my RetirementRevised.com podcast, I talk with one of the nation’s top experts on the administrative workings of Social Security - Kathleen Romig, senior policy analyst at the Center on Budget and Policy Priorities. Click the player icon at the top of the page to hear our conversation.
Special subscription offer for NextAvenue.org readers!
This podcast is part of my weekly subscription newsletter on retirement and aging, where I cover the latest news, trends and research in the field. Subscribers also have access to my series of guides on the key issues in retirement - downloadable, quick reads that are paired with podcast interviews with top experts. The latest just came out a couple weeks ago - it breaks down the important choice between Original Medicare and Medicare Advantage - you can download a free copy of the guide here.
And, through the end of the year, NextAvenue.org readers can receive a special 20% discount for a one-year subscription. Click here to take advantage of this special offer, or use this link to learn more about the newsletter.
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This week, my podcast guest is the author of an extraordinary book that mounts a strong critique about the way the medical profession and our health care system, care for the elderly. Louise Aronson is a geriatrician, writer and a professor of medicine at the University of California, San Francisco. Her book, published last summer, is Elderhood: Redefining Aging, Transforming Medicine, and Reimagining Life.
Elderhood is a New York Times bestseller, and for very good reason. Aronson argues that the experiences of older people in our healthcare system are indications that the current approach to medical care care is broken for all of us. But when it comes to old age, she writes that the system has a “devastating ignorance.” One reason the book is so compelling is that Aronson talks about these issues not only from the standpoint of policy and numbers, but from her vantage point as a practitioner. The book is full of riveting stories about her own patients - with their identities protected, of course. Some of the stories are inspiring, but many of them are very disturbing.
So, I want to recommend Elderhood to you. And, to get a taste of what it’s all about, check out my interview with Dr. Louise Aronson. Click the player icon at the top of this page to listen to the podcast.
Other ways to listen to the podcast
Prefer to listen to the program using your favorite podcast app? You also can find the program on Apple Podcasts, Spotify or Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
This week, the podcast focuses on some trends in housing that have some disturbing implications for older adults. But I also wanted to update listeners on the final numbers for next year on the Social Security cost-of-living adjustment (COLA).
So, the podcast is a bit of a twofer this week.
Medicare premiums and Social Security
The Social Security COLA was announced in October - but the real COLA isn’t apparent until Medicare announces premiums for the year ahead. That’s because Part B premiums are deducted from Social Security checks. Medicare released those figures late in the day last Friday - probably hoping no one was paying attention heading into the weekend, because the numbers are not pretty. The standard premium for Medicare Part B (outpatient services) will jump 6.7% to $144.60 next year, and the annual deductible will jump by a similar amount.
The earlier-announced Social Security COLA is 1.6% - but the net COLA will be much smaller for most beneficiaries. For example, if your Social Security benefit is $1,500, your COLA will be just under 1% - an increase of 14.90 rather than $24. Learn more about this in my column this week for Reuters Money.
Housing inequality has hit unprecedented levels
My guest on the podcast this week is Jennifer Molinsky. She’s a senior research associate at the Joint Center for Housing Studies of Harvard University (JCHS), and a lecturer at Harvard’s Graduate School of Design. At JCHS she works on housing policy and planning issues including homeownership, housing for older adults, and land use regulation.
Jennifer is co-author of a new report that sheds light on how inequality is impacting older Americans, with a particular focus on housing.
The report finds slipping rates of home ownership, especially among racial minority groups. It also found a growing share of older households are carrying mortgages and other types of debt into retirement.
And here’s the finding I found most disturbing: the number of cost-burdened households aged 65 and over grew by more than 200,000 to a new high of nearly 10 million. The Harvard researchers define “cost-burdened” as paying more than 30% of income for housing. And out of this group, about 5 million of these households were severely burdened, paying over half their incomes for housing.
Listen to the podcast by clicking on the player icon at the top of this page.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. The most recent looks at the critical decision between Original Medicare and Medicare Advantage.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts, Spotify or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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Original Medicare, or Medicare Advantage?
This is the most basic decision you’ll make about health insurance at the point of retirement.
If you opt not to join Original Medicare at that time, you forego the preexisting condition protections offered in Medigap supplemental policies. Medicare Advantage can save you money on premiums, but Original Medicare remains the gold standard for its flexible access to providers and predictability of total costs over your lifetime.
The latest in my series of retirement guides and podcasts addresses the Original v. Advantage choice. The guide is available exclusively to paid subscribers to the newsletter; the podcast is out there for everyone to hear. My guest is one of the nation’s top experts on Medicare - Dr. Gretchen Jacobson, an associate director with the Kaiser Family Foundation’s Program on Medicare Policy. Much of Gretchen’s research focuses on the Medicare Advantage program.
In our discussion, Gretchen reviews the basics on enrolling in these two Medicare options. We also review the differences in access to health providers with these two options, the trade-off on costs, and the overall plus/minus of both approaches. Listen to the podcast by clicking the player icon at the top of this page.
If you haven’t subscribed to the newsletter, it’s never too late. You’ll get access to the new Medicare guide, plus guides that already are out on topics like claiming Social Security, how to hire a financial planner and aging in place. And, you’ll be doing your part to support unbiased, independent journalism.
You can subscribe by clicking the little green button below, or by visiting retirementrevised.com/enewsletter.
Chicago readers: interested in co-mentoring?
For Chicago-area readers of the newsletter - I wanted to bring to your attention Ageless Innovators, a cutting-edge program that connects successful innovators across generations and across businesses to provide reciprocal learning.
Ageless Innovators is seeking applicants for its third cohort of co-mentors; the idea is to build intergenerational community and relationships built around the value of diverse perspectives. Co-mentors in the program receive memberships to The Village Chicago and Chicago Innovation, as well as tickets to attend monthly events.
All ages are welcome to apply - the deadline for applications is end of business on Friday, November 22nd. Click here to learn more; fill out an application here.
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If you’ve listened to this podcast much, you know that I’m a big fan of fee-only financial planning. It’s the only way I know to make sure that you’re getting unbiased advice, not sales pitches for commission-based products.
For the longest time, I’ve wanted to interview my own financial planner for a story. Debbie Wise has been a leading proponent of fee-only, holistic planning for years, and we have a lot of lively, fun conversations about everything going on in the business. Debbie always has great observations and thoughts to share. So, this week she joins me on the podcast.
Debbie and I discuss:
How my wife and I decided to hire a planner, and how we found her firm
How our retirement plan changed after we hired Debbie
How Wise Planning assesses new clients' retirement plans and the biggest mistakes Debbie sees clients making when they first walk through the door
How her planning practice has evolved over time
A few areas where we don't agree
Who needs a financial planner - and who doesn't?
Hope you enjoy the podcast - to listen, click the player icon at the top of this page.
Next week: Original Medicare or Medicare Advantage?
Newsletter subscribers will receive the latest in my series of retirement guides next week - how to make the choice between Original Medicare and Medicare Advantage?
This is the most basic decision you’ll make about health insurance at the point of retirement, and it’s an important one. Advantage plans can save you money in some cases, but Original Medicare remains the gold standard from the standpoint of flexible access to providers and predictability of total costs.
Why subscribe?
“Why do you charge for your newsletter - isn’t everything on the internet free?”
I get this question often, so I thought I’d take a minute this week to answer.
You know the old saying, “there’s no free lunch.” What’s not free when it comes to free personal finance information on the internet?
Let’s start with this: no one in the retirement and personal finance marketplace creates content just for the fun of it - there always is a commercial motive. Sometimes that’s obvious - you’ll see advertising running in a newsletter or a podcast. I don’t accept advertising for a couple reasons. First, it could create a conflict of interest for me as a journalist covering this space. If I accepted direct payment, let’s say, from a mutual fund company that I cover in articles I write for news outlets like Reuters or the New York Times - that’s a conflict, or it creates the appearance of a conflict. Beyond that, I don’t want to deliver advertising to you for financial products that I don’t think are particularly good deals for my listeners. And, there are lots of them out there.
Sometimes the not-free lunch is more subtle. There are loads of radio and tv shows, podcasts and newsletter hosted by people positioning themselves as financial gurus. They don’t make money from their media products per se. The programs are sales vehicles aimed at bringing you in the door to trade stocks, buy annuities or worse. In many cases, the radio and tv shows air on blocks of time the hosts buy from the stations. Literally, they are advertisements - masquerading as programming.
So, doing a subscription newsletter makes it easy for me to cover what I think matters on retirement and aging, free of any possible conflicts, or the appearance of conflict. It’s not free to subscribe, but it’s not expensive. My aim is to deliver ideas, suggestions and concepts that will help improve your financial picture and retirement in ways that pay off far beyond paying a few dollars a month for the newsletter.
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. Next week, I’ll be publishing anew guide comparing Original Medicare and Medicare Advantage. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring a podcast interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week, the podcast takes a look at the public health problem of violence among older adults.
Violence is often portrayed in the media as a problem that affects mainly younger people. But a new study in the research journal Health Affairs shows that it’s common for violence of various kinds to affect older people. And, the problem will grow more acute in the years ahead as the population of the United States ages.
Joining me this week to talk about violence and the elderly are two of the study’s co-authors. Dr. Emmy Betz is an emergency physician at the University of Colorado Hospital. She conducts research in injury epidemiology and prevention, and has special expertise in the topic of suicide. Dr. Tony Rosen is a researcher in elder abuse and geriatric injury prevention at Weill Cornell Medical College, and a practicing Emergency Physician at New York-Presbyterian Hospital.
I talked with Dr. Betz and Dr. Rosen about the most common types of violence impacting older people and the role of firearms. We also discussed strategies for violence prevention that individuals can take to protect their families and friends, and public policy that might help reduce the incidence of violence.
Listen to the podcast by clicking the player icon at the top of this page.
And, here is some further background reading on violence and older adults that I have found useful:
Unlocked And Loaded: Families Confront Dementia And Guns. As America copes with an epidemic of gun violence that kills 96 people each day, there has been vigorous debate about how to prevent people with mental illness from acquiring weapons. But a little-known problem is what to do about the vast cache of firearms in the homes of aging Americans with impaired or declining mental faculties. Kaiser Health News.
When older Americans with depression and dementia have access to firearms. A study finds that older Americans with risk factors for harming themselves or others don't seem to be any less likely to have access to firearms than anyone else their age. Pacific Standard.
Household Firearm Ownership and Storage, Suicide Risk Factors, and Memory Loss Among Older Adults. Firearm access poses a danger to older persons with cognitive impairment; their families and caregivers; visitors, such as grandchildren; and potentially others. Annals of Internal Medicine.
In Elderly Hands, Firearms Can Be Even Deadlier. About a third of Americans over age 65 own a gun, and an additional 12 percent of them live with someone who does, the Pew Research Center report. The New York Times.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. More are in the works. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring a podcast interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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Most people enroll in Medicare when they become eligible at age 65. But you also can change your coverage each fall. Fall enrollment runs from Oct. 15 through Dec. 7. This is your chance to switch between original fee-for-service Medicare and Medicare Advantage, the all-in-one managed care alternative to the traditional program. You also can re-shop your prescription drug coverage — whether that is a stand-alone Part D plan, or wrapped into an Advantage plan.
Joining me on the podcast this week to talk about fall enrollment is one of the most knowledgeable people in the country on Medicare. Frederic Riccardi is president of the Medicare Rights Center, an advocacy and consumer rights organization. Before taking the top job at the center earlier this year, Fred oversaw all of Medicare Rights’ client programming, including its National Consumer Helpline, which handles around 20,000 questions each year about Medicare.
It’s a good idea to do a checkup on your coverage, even if you are happy with your current choices. Prescription drug plans often revise their lists of covered drugs and their coverage rules. If you’re enrolled in an Advantage plan, this is your opportunity to make sure your health care providers will be in your plan during the coming year, and whether a move to original Medicare might make sense for you.
Fred and I talked about why it's important to shop, how to evaluate your current coverage, the tradeoffs between traditional and Medicare Advantage and much more.
Listen to the podcast by clicking the player icon at the top of this page.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. More are in the works. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring a podcast interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week, subscribers to the newsletter are receiving the latest in my series of guides on key topics in retirement - aging in place.
Staying in your current home as you age can be a good option - but doing it successfully requires some careful thought and planning. What’s more, aging in place is not always realistic - issues to consider include the cost of maintaining your home, proximity to healthcare, family, recreation, leisure activities and transportation.
Deciding where to live in retirement can be a big challenge. The decision doesn’t lend itself to dispassionate analysis, because so much emotion is involved. Just as important, you’re attempting to make decisions now that depend very much on your future lifestyle, health and social environment.
“Most people have tremendous difficulty envisioning what might happen going forward,” says Dr. Stephen Golant, a gerontologist and expert on long-term care, housing, mobility and transportation for older adults. “The idea that your health might decline or that your spouse could die, or that your financial situation is going to become more tentative - these are obviously things that we should be thinking about, but it’s difficult to put ourselves into that future tense in order to plan.”
Dr. Golant is my guest on this week’s podcast. He is a professor emeritus at the University of Florida, and his latest book is called Aging in the Right Place.
In our conversation, we discuss the reasons people might want to move - but don’t in most cases. And he also thinks some new factors are emerging that will increase the odds that people will stay put.
Listen to the podcast by clicking the player icon at the top of this page.
To receive your copy of the guide, subscribe to the newsletter by clicking this link, or use the little green “subscribe now” below.
The guide series
When you subscribe, you’ll receive the weekly newsletter, plus all editions of the retirement guides. Along with the new guide to aging in place, the series already includes:
The transition to Medicare: How to get it right. The transition to Medicare from other types of insurance is fraught with pitfalls that can be costly. Signing up for Medicare at the right time is critical, along with understanding when the program’s coverage is primary. Getting this wrong can lead to costly lifetime late enrollment penalties on Part B premiums, and lengthy gaps in your insurance coverage. Featuring a podcast interview with Joe Baker, recently-retired president of the Medicare Rights Center.
How to hire a financial advisor. Why hiring an advisor can improve your retirement - if you hire the right kind. And that means hiring a fiduciary. Featuring a podcast interview with Sheryl Garrett, a certified financial planner and a pioneer in the movement to provide everyday Americans with unbiased financial advice.
Timing your Social Security claim. Social Security is the most important retirement benefit for most Americans - full stop. That is true for low- and middle-income people, and for more affluent households. In this guide, I explore how your benefit is calculated and strategies for getting the most income from the program. Featuring a podcast interview with journalist and Social Security expert Mary Beth Franklin.
The cost of healthcare in retirement. Surveys show that many Americans worry that healthcare costs will consumer a large portion of their resources. One reason is that we are exposed to a steady stream of news headlines with daunting forecasts of what you will need to spend over the course of your entire retirement. But these forecasts can be misleading, since you won’t be spending these big sums all at once. The more important questions: What are the outsize risks that could upset your retirement plan? And, what can you do to mitigate those risks? Featuring a podcast interview with retirement educator Steve Vernon.
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Income inequality is a red-hot topic these days, but one overlooked aspect of the story is how inequality spills over into retirement. Joining me on the podcast this week to examine this question is Dr. Nari Rhee, who directs the retirement security program at the UC Berkeley Center for Labor Research and Education. Nari is co-author of a fascinating new report that documents inequality in financial assets - basically, savings accounts, stocks and bonds - and what that means for retirement security.
The U.S. Government Accountability Office (GAO) reported recently that in 2013, families in the top 10 percent of the wealth distribution held 76 percent of the wealth held by all families in the United States.
While income inequality was relatively stable from the 1940s to the 1970s, since then wage growth at the top of the income distribution has outpaced the rest of the distribution, and inequality has risen. Wealth has become increasingly concentrated as well. By 2013, those families in the top 10 percent of the wealth distribution held 76 percent of the wealth held by all families in the United States.
A GAO analysis of Federal Reserve income data reveals the same trend among older households. GAO divided older households into five groups (quintiles) based on their income and wealth, and found that the top quintile has run away from all other income groups. For example, in 2016, households in the top quintile had estimated average income of $398,000, compared to about $53,000 for the middle quintile and about $14,000 for the bottom quintile.
The picture is similar for wealth accumulation. Low wage growth has created a have- and have-not situation among retirees - well over half have not been able to save at all, and will be relying mainly on Social Security benefits.
The NIRS report contains several striking findings.
The share of Baby Boomer financial assets owned by the wealthiest 5 percent grew from 52 percent in 2004 to 60 percent in 2016. Over the same period, the share of financial assets owned by the top 10 percent of Baby Boomer households grew from 68 percent to 75 percent, and the share owned by the top 25 percent grew from 86 percent to 91 percent. Meanwhile, the share of assets owned by the bottom 50 percent of boomer households shrank from 3 percent in 2004 to under 2 percent in 2016.
Financial asset inequality appears to be growing worse across generations. Generation X and Millennials appear to have reached comparable degrees of financial asset concentration among the wealthiest households as Baby Boomers, at younger ages.
Financial asset inequality is exacerbated by regressive tax incentives for retirement savings and unequal access to employer-provided retirement plans.
The study recommends several policy solutions, including strengthening and expanding Social Security, making workplace retirement saving plans more widely available and improving the federal Saver's Credit for low-income taxpayers.
Good ideas all, and worth pursuing. But we also will need a policy approach to the broader U.S. income inequality problem. Solve that, and the retirement problem gets better on its own.
Listen to my conversation with Nari by clicking the player icon at the top of this page.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. More are in the works. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring a podcast interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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For many seniors, the announcement of Social Security’s cost-of-living adjustment (COLA) is one of the most anticipated pocketbook news stories of the year. The COLA for 2020 will be released during October - a time of year when I always check in with Mary Johnson.
Mary is a Social Security and Medicare policy analyst for The Senior Citizens League. She has been tracking the COLA for more than 24 years, and conducts an annual study on the buying power of Social Security. Mary also writes the free Social Security & Medicare Advisor (subscribe at the League’s website).
Ahead of the 2020 COLA news, Mary joins me on the podcast this week to talk about all things COLA, including:
The history of the COLA (it has been awarded annually only since 1975)
How the COLA is figured, its recent COLAs, and why they have been stingy
What will the COLA be in 2020 (probably about 1.6%)
How the COLA interacts with the Medicare Part B premium
What seniors can do to protect themselves from inflation
Listen to the podcast by clicking on the player icon at the top of this page.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. Each guide is paired with a podcast interview with an expert on the topic; the series already covers Social Security claiming and the transition to Medicare, and how to hire a financial planner. More are in the works. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring a podcast interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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Social Security faces a financial shortfall in the years ahead that requires action by Congress. The combined trust funds for Social Security’s retirement and disability programs are on course to be depleted in 2035; without changes, funding from payroll tax receipts will be sufficient to pay only 80 percent of currently scheduled benefits. That would mean immediate, across-the-board benefit cuts, but the pain would be felt most acutely by today’s younger workers and low-income retirees.
But Democrats are aiming to do more than simply address the solvency issue - they want to expand benefits. Their plans range from the relatively centrist proposal now advancing in the House of Representatives from Rep. John Larson, to more bold proposals from Elizabeth Warren and Bernie Sanders.
On the podcast this week, we break down the proposals, and take a look at prospects for the Larson bill in the House this fall. My guest is Nancy Altman, one of the most knowledgeable people in the United States on Social Security. You may have heard of Nancy’s work as a progressive advocate for Social Security expansion - she heads up Social Security Works, one of the key grassroots group pushing for expansion as part of an overhaul that also would restore 75-year solvency to the program. But Nancy also wrote the book on the history of Social Security and why it should be expanded. Correction, she actually has written three authoritative books on Social Security. Nancy has been involved with Social Security policy since the 1980s, having served as a staffer on the Greenspan Commission, which crafted the last major Social Security reforms.
In this conversation, Nancy and I cover:
The 2035 problem (she doesn’t really see it as a “problem,” tho)
Ways to restore solvency - basically, higher taxes, benefit cuts or a combination of both
Why we both think higher taxes are the way to go
An overview of the plans from Larson, Sanders and Warren - also, where does Joe Biden stand on this issue?
The politics of Social Security reform this fall and in the 2020 presidential election
Read about the three leading Democratic reform proposals here:
Social Security 2100, sponsored by Rep. John Larson in the House of Representatives
Expansion proposals from Sen. Bernie Sanders and Sen. Elizabeth Warren. expansion plan.
Listen to the podcast by clicking on the player icon at the top of this page. The podcast also is available on Apple Podcasts and Stitcher.
Subscribe now!
This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to housing strategies for retirement, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
Subscribe at retirementrevised.substack.com
This week, the podcast dives into the topic of Medicare’s fall enrollment period. Every fall, enrollees have the opportunity to do a check-up on their prescription drug or Medicare Advantage insurance coverage, and shop for new insurance plans if their coverage doesn’t meet current needs. This is done during a fall enrollment period that runs from October 15th through December 7th.
Most Medicare enrollees don’t bother to do this check-up, but they should. Insurance plans can - and do - change what will be covered from year to year, and the list of health care providers in Advantage plans can change. And studies show that updating your coverage often saves money.
I’ll be writing several articles about fall enrollment over the next few weeks, but already have done some reporting on a new wrinkle that comes along with this year’s enrollment season. The wrinkle has to do with the go-to shopping resource people use to shop for plans. This is the Medicare Plan Finder - the official government site that posts insurance plan offerings.
The Plan Finder has had some problems. Studies have found that users are confused by the site navigation. The information displayed is often incomplete or incorrect. Even expert counselors who are trained to help people with their selections give the site poor marks.
Just before Labor Day, Medicare launched a new version of the Plan Finder that aims to correct some of these problems. The jury is still out on the new site, but the timing of the rollout has alarmed many of the experts who work with people on enrollment, because they have not had time to adequately train people to use it or test it for bugs. And Medicare says it will keep making tweaks between now and the start of fall enrollment.
My guest on the podcast today is one of those experts. Ann Kayrish is the senior program manager for Medicare at the National Council on Aging. She focuses on helping groups around the country that provide counseling to Medicare enrollees with their applications and benefit enrollment. Prior to joining NCOA, Ann directed operations for the State Health Insurance Assistance Program in Montgomery County, which helps the most vulnerable populations gain access to the health care benefits and services.
So Ann is one of the people very close to the issues with Medicare Plan Finder and what’s been going on with it lately.
Listen to the podcast by clicking on the player icon at the top of this page.
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This is a listener-supported project, so please consider subscribing.
The podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to housing strategies for retirement, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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Is a recession on the way? The bond market seems to think so, judging by the inverted yield curve, and so does the Trump administration, if the somewhat desperate call from the White House for more tax cuts is any indication.
If a downturn is coming, what can you do to prepare? My guest on the podcast this week addressed that question in a recent post for NextAvenue.org. Chris Farrell is the senior economics contributor to "Marketplace," the public radio business and economic program, and his post examines reasons why odds of a recession are rising, and ways to shore up household finances.
I wanted to push the conversation in a different direction - how would a recession impact retirees, and people close to retirement? Our podcast chat centers on these points:
How to think about your retirement portfolio allocation, and the perils of marketing timing;
The job market and how a downturn can lay waste to your retirement plan;
The spending side of the equation - how can you trim spending if the economy heads south?
Chris has written extensively on these themes. His most recent book is Purpose and a Paycheck: Finding Meaning, Money, and Happiness in the Second Half of Life. He takes a close look at the labor market for older Americans, and of course that is a big part of what we discuss on this podcast. One of his earlier books, The New Frugality, also comes into play in our conversation.
By the way - kudos to The New York Times for trying to explain the invested yield curve to all of us with a 3-D graph, and a comparison to pro football. Points awarded here for effort, although I bet most of us still cannot stand on one leg and explain it. I have trouble enough doing it standing on two legs.
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This podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to aging in place, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week, the podcast takes a dive into some important changes coming down the pike in the Medicare program. For the first time in its history, Medicare will soon begin to pay benefits for some non-medical services that could help improve the health of seniors who are facing major functional limitations. The new benefits are contained in legislation passed by Congress last year called the Chronic Care Act. The law will allow Medicare Advantage plans to pay for things like grocery deliveries, transportation, caregiver support, and retrofitting homes to support older adults with chronic conditions.
Joining me this week to talk about the changes -- and when we can expect to see them cropping up in Medicare plans -- is Dr. Bruce Chernof.
Bruce is the president and CEO of The SCAN Foundation, one of the largest foundations in the country focused solely on improving the quality of life for seniors. The foundation has a special focus on promoting a coordinated, and easy-to-navigate system of high-quality health services for older adults that preserve dignity and independence.
I asked Bruce what these benefits actually will look like, and why they could mark an important change in Medicare. I also asked him why these benefits will be offered only in Medicare Advantage plans, and when we could see something similar rolled out in traditional fee-for-service Medicare.
Finally, I asked for his thoughts on the country’s ailing system of providing long-term care support and services, and how that can be improved.
Listen to the podcast by clicking the player icon at the top of this page.
Subscribe now!
This podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to aging in place, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week, my guest on the podcast thinks the 401(k) is a failure.
Teresa Ghilarducci is a labor economist at the New School in New York City who specializes in topics related to older workers and retirement security. She has been arguing for years that our current self-directed system of saving for retirement in 401ks and IRAs is not up to the job of helping people build for a secure retirement. She thinks it works just fine for the top five percent of households by income, but not for the rest of us - and all the advice that people like me dispense is somewhat useless and frustrating for most people.
Teresa has a different idea that she has been promoting in the halls of Congress, called the Guaranteed Retirement Account (GRA). The idea is a mandatory, government-run saving program; any employer that doesn’t offer their own plan would be required to contribute and sign up workers. Here’s a link to an article I wrote in 2015 for The New York Times on Teresa’s GRA idea, along with a discussion of her unusual partnership on this project with a top Wall Street executive. And here’s a primer on the GRA on the New School website.
Teresa also is launching her own podcast later this month called Reset Retirement. The program will feature interviews with working Americans who have encountered problems navigating the retirement system, and comments from experts on how those problems can be handled. You can subscribe via Apple Podcasts or Spotify.
A tidbit: Teresa says she drew inspiration for the podcast from my recent book, Jolt: Stories of Trauma and Transformation. How, exactly? You’ll have to listen to this week’s podcast to find out. Do that by clicking on the player icon at the top of this page.
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This podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to aging in place, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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This week the podcast digs into a topic that doesn’t come up all that often these days: inflation, and the risk it can pose to your retirement plan.
In one sense, it’s no big surprise that inflation isn’t much of a topic in retirement planning circles - after all, it hasn’t been a major threat for the economy since the early 1980s. But those of us old enough to have experienced the stagflation of the late 1970s remember how damaging it was - low economic growth coupled with inflation that peaked at 13 percent.
The big risk with inflation is that it cuts your purchasing power. That’s problematic for retirees living on fixed incomes. Most sources of retirement income are not inflation-adjusted (the one big exception being Social Security - more on that below). Even the low inflation rates we have experienced in recent years can take a big toll. For example, my guest on the podcast this week, Dirk Cotton, calculates that two decades of average inflation at three percent would cut your purchasing power in half over that time.
Dirk is a one of the smartest retirement researchers around. He has a great eye for important topics that don’t get covered enough that he writes about at The Retirement Cafe.
Dirk recently posted two articles about retirement planning and inflation that caught my eye. The first looks at historic patterns of inflation - and how unpredictable the trends can be. He also examines generational differences in perspectives on inflation (spoiler alert - boomers worry about it, GenXers and younger don’t). The second post discusses a recent paper that Dirk co-authored with economist Zvi Bodie of Boston University, examining inflation-adjusted annuities - specifically, why there is almost no market for them.
To hear my conversation with Dirk Cotton, click on the player icon at the top of this page.
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This podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcast, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming, the transition to Medicare. The series also will include guides to aging in place, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
You can subscribe by clicking the little green “subscribe now” link at the bottom of this page, or by visiting RetirementRevised.com. And if you’re listening on Apple Podcasts or Stitcher, I hope you’ll leave a review and comment to let me know what you think.
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Surveys show that many Americans worry that healthcare costs will consumer a large portion of their resources. One reason is that we are exposed to a steady stream of news headlines with daunting forecasts of what you will need to spend over the course of your entire retirement. Fidelity Investments, for example, estimates that a 65-year old couple retiring in 2019 can expect to spend $285,000 on health care and medical expenses throughout retirement. The Employee Benefit Research Institute found that a 65-year-old couple could need nearly $400,000 to meet lifetime expenses in a worst-case scenario.
But these forecasts can be misleading, since you won’t be spending these big sums all at once. And much of your healthcare spending can be managed very well - because it can be predicted and covered by health insurance. The more important questions: What are the outsize risks that could upset your retirement plan? And, what can you do to mitigate those risks?
This week, I’m releasing my new guide to the cost of healthcare in retirement. As always, the guide is paired with a podcast interview with a top expert on the topic. For this one, my guest is Steve Vernon. Steve is an actuary by background, and he worked for years as a consultant to large corporate retirement plans before starting his own consumer retirement education firm. He also is a research scholar at the Stanford Center on Longevity, and writes a column for CBS MoneyWatch.
Steve’s latest book is called Retirement Game-Changers. In it, he focuses on helping older workers navigate the critical decisions they need to make as they transition from employment to retirement. And the book provides very thoughtful insights on how to think about health care in retirement.
Click on the player icon at the top of this page to listen to our conversation. And download your copy of the guide here.
Subscribe during the Spring Sale!
This podcast is part of the newsletter I distribute to subscribers to the RetirementRevised.com newsletter. It’s a listener-supported endeavor, and I hope you’ll consider subscribing. Along with the podcast, you’ll get access to the series of retirement guides that I’m publishing right now - brief, downloadable resources to help you understand challenges like optimizing Social Security benefits, transitioning to Medicare from other types of insurance and how to hire a financial adviser. Each guide is paired with a podcast interview with a top expert in the field.
Right now, you can take advantage of the Spring sale - half off your first year. Check it out using the “subscribe now” link at the bottom of this page, or visit the website for more details.
If you’re listening on Apple Podcasts or Stitcher, please leave a review and comment to let me know what you think. You’ll be helping me get more visibility for the show. If you like what you see here, I hope you’ll consider subscribing, too.
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This week, the podcast takes a look at the first major retirement legislation to move through Congress in more than a decade According to some policy folks, it is the most significant retirement legislation since the passage of the Pension Protection Act (PPA) in 2006. That’s hard to debate, but only, as mentioned, because it’s the only retirement legislation to come along since PPA was passed.
Several much more pressing (“significant”) retirement matters need to be addressed by lawmakers and policymakers. One is the looming implosion of multi-employer pension plans covering more than 10 million workers and retirees. These were created under collective bargaining agreements and jointly funded by groups of employers in industries like construction, trucking, mining and food retailing. Congress has been working on a solution, and it was good to see a bill advance out of the House Education & Labor Committee this week.
Another big issue is weakened fiduciary protection for retirement savers. The Securities and Exchange Commission approved its Regulation Best Interest regulation this month; as expected, it is far weaker than the now-deceased fiduciary rule implemented by the Obama-era Department of Labor. The SEC rule relies on disclosure - here’s 100 pages of fine print, and you’re on your own.
And of course the other enormous, looming issue is Social Security reform - if nothing is done by 2035, we’re all looking at a haircut on benefits of about 25 percent.
But I digress - back to the legislation at hand - the Setting Every Community Up for Retirement Enhancement Act of 2019 - SECURE for short. The bill recently passed the House of Representatives by a lop-sided, bipartisan margin, and it is under consideration by the Senate now.
You can find more in my most recent Reuters column, but in brief, SECURE contains a laundry list of provisions that the financial services industry has wanted passed for a long time. It focuses in four key areas:
Increasing access to employer-sponsored workplace savings plans';
Getting people in these plans to save more;
Add features to workplace plans that get people to focus on how their savings translate to income in retirement
Increase financial literacy on how savings translate into spending and income in retirement.
One of the key provisions make it possible for employers to band together to offer a single workplace retirement plan to workers. This typically would be small employers. I’ve been skeptical that this will put much of a dent in the country’s workplace coverage gap. For one thing, it’s not at all clear many plan providers will jump into this market to offer plans. And more-competitive low-cost options for small employers have surfaced since this idea was first hatched some years ago.
SECURE also would make it much easier for employers to add the option of converting part of your 401k savings to an annuity at the point of retirement. The idea here is to help assure people of a higher amount of guaranteed income in retirement. Then there’s some small stuff. For example, recognizing that more people are working longer, the age when required minimum distributions must begin would increase from 70.5 to 72. And the maximum age for contributing to an IRA (also 70.5) would be repealed. (Insert yawn here.)
But I wanted to get a reasoned defense of the SECURE Act for the podcast. For that, I turned to Melissa Kahn, managing director of retirement policy for the defined contribution team at State Street Global Advisors - a very large company that manages nearly $3 trillion in assets worldwide. Melissa is an attorney with extensive experience in the world of employee benefits and regulation. Before joining State Street, she worked as a consultant in the industry and also for more than a decade working in the life insurance business. She wrote an excellent article recently that does a great job distilling what’s in the SECURE Act.
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Social Security is our only universal retirement and disability income program, and the work of the Social Security Administration touches all our lives at one point or another. That’s why I worry so much about the the deterioration of customer service provided to the public in recent years by the Social Security Administration.
I’ve been writing about this a great deal over the past year, starting with an expose for the Sunday New York Times last November. That piece looked at how repeated cuts to the agency’s administrative budget over the past decade by Congress has forced the closing of field offices, staff cuts, and long delays on Social Security’s toll-free line -and an unconscionable backlog of people waiting for appeal hearings on disability insurance claims. Here’s one especially onerous statistic: in 2016, nearly 10,000 Americans died while waiting for a disability appeal to be heard and decided. I also recently covered a related story - the cutback of mailings of crucial annual Social Security benefit statements. That also is a budget-related decision, and a really dumb one.
Congress cut Social Security’s budget nearly 11% between 2010 and 2019, after adjusting for inflation. During the same time, the number of beneficiaries grew by more than 16 percent. The Social Security beneficiary rolls are growing quickly as the nation ages. This year, the agency will pay more than a trillion dollars in benefits to 69 million Americans. The agency forecasts that the beneficiary rolls will increase 43% over the next two decades.
All of this was in the news again this week with the decision of three former commissioners of the Social Security Administration to speak up by writing a letter to leaders in Congress, urging changes in the process used to set Social Security’s administrative budget. The letter was sent to 19 key lawmakers, including the leadership of both parties and the chairs and ranking members of all the key congressional committees controlling budget, appropriations and finance.
This was a remarkable, unprecedented step - partly because of its bipartisan nature. The letter was signed by two commissioners appointed in the past by Democratic presidents, and one by a Republican. You can read that story here, and the letter can be downloaded here, along with a list of the key Congressional leaders who received it.
One thing that should outrage all of us is that we pay for these services with our payroll tax contributions. The Social Security administrative budget is funded through the same payroll taxes that fund benefits. Currently, workers and employers split a tax of 12.4%.
The problem here really is not that there is an anti-Social Security caucus in Congress that wants to chop its administrative budget. If anything, Social Security offices are the kind of thing lawmakers want to protect - losing a field office is a little like losing a military base in your district.
The main issue is that the agency’s administrative budget is counted as part of the federal budget due to a somewhat disputed interpretation of federal law by the Office of Management and Budget. That means the Social Security administrative budget must compete with other non-defense discretionary spending needs. And since budget caps were enacted in 2011, that has forced these administrative budget cuts.
Joining me on the podcast this week to talk about all this is one of the foremost experts in the nation on the finances of Social Security. Kathleen Romig is a senior policy analyst at the Center on Budget and Policy Priorities in Washington, DC, where she works on Social Security, Supplemental Security Income, and other budget issues. Earlier in her career, she worked at the Social Security Administration, for the Social Security Advisory Board, and the Congressional Research Service.
Listen to the podcast by clicking on the player icon at the top of this page.
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This podcast is part of the newsletter I distribute to subscribers to the RetirementRevised newsletter. It’s a listener-supported endeavor, and I hope you’ll consider subscribing. Along with the podcast, you’ll get access to the series of retirement guides that I’m publishing right now - brief, downloadable resources to help you understand challenges like optimizing Social Security benefits, transitioning to Medicare from other types of insurance and how to hire a financial adviser. Each guide is paired with a podcast interview with a top expert in the field.
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This edition of the podcast examines a question that has fascinated me for years -- why do so many of us think that Social Security only matters to older people?
Yes, retirement benefits are the biggest component of Social Security. But the program also is tremendously important for disabled people of all ages, and surviving children and spouses of deceased beneficiaries. And maybe more to the point - the future of Social Security will matter very much to today’s young people. They will need Social Security every bit as much as today’s retirees and near-retirees . . . and probably more so in many cases if current economic and retirement benefit trends persist.
Yet many young people have heard the endless refrain that they should not count on Social Security to be there for them in the future. That is not surprising, considering the negative, often false propaganda uttered by politicians hostile to Social Security and the financial services industry, and misleading media coverage.
My guest on the podcast this week argues that worry about Social Security’s viability could become self-fulfilling if it erodes political support. That would be especially damaging for young people when they retire, argues Peter Arno, an economist at the University of Massachusetts-Amherst, and a scholar of both Social Security and health policy.
Arno points to four trends that suggest millennials will need to rely to a much greater extent on Social Security than current retirees and those approaching retirement now. They will be far less likely to receive retirement income from defined benefit pensions, and they have lower rates of home ownership than earlier generations. And, wage stagnation and crippling levels of student debt make it impossible for many to save for retirement.
Arno argues that there is a historic opportunity to unite boomers and millennials in support of strengthening Social Security. In a provocative article that he co-authored recently in the American Prospect, he takes on the root causes of the cynicism so many young people have today about Social Security and argues that Social Security should be a centerpiece policy issue for anyone interested in civil rights and social justice. Arno’s co-author on the article is Ann Beaudry, a progressive author and policy strategist who has worked with the National Committee to Preserve Social Security & Medicare, and other foundations.
“Social Security is the most successful anti-poverty policy in the history of the United States,” Arno says. “And this is not true just for seniors, but across the entire life cycle and the entire population. It reduces more poverty for children than any other policy, more poverty for working adults and more poverty for seniors. So it, it's an inter-generational antipoverty policy.”
The program’s impact is especially profound for people of color and women, he adds, noting that wage disparities create economic disadvantage that persists in retirement.
I also feature Arno’s comments in my column for Reuters this week. There, I get into some of the most recent Gallup poll data on Americans’ level of worry about Social Security - and what the program’s finances actually show these days.
This week’s podcast is part of a the subscription RetirementRevised.com newsletter. Right now, the newsletter is publishing a series of downloadable guides on the key challenges of retirement - each edition pairs a guide with a podcast interview with a top expert. So far, we’ve had guides on the transition to Medicare and how to hire a financial adviser. Next up is the guide to maximizing Social Security benefits, featuring a podcast interview with Mary Beth Franklin - another journalist who has been covering Social Security for years, and probably is the only person I can think of who geeks out over Social Security as much or more than I do!
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Next up: Your guide to smart Social Security strategies
The next edition of the subscription newsletter includes the latest in my series of retirement guides, and I’m really excited about this one.
The guide looks at strategies for maximizing Social Security benefits - and the podcast features an interview with a journalist who geeks out over Social Security just as much as I do - Mary Beth Franklin. Mary Beth is a columnist for Investment News and a long-time financial reporter and author based in Washington, D.C. Mary Beth possesses a near-encyclopedic knowledge of Social Security, and we sat down recently to discuss just about every aspect of Social Security strategy. You won’t want to miss this one!
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My new series of retirement guides for newsletter subscribers continues this week with a look at how to hire a financial advisor. This is a topic I’m passionate about, because hiring a financial advisor can improve your retirement - if you hire the right kind. And that means hiring a fiduciary.
The word “fiduciary” may sound like technical legalese, but it describes a critical distinction. Simply put, only advisors who are fiduciaries are required to put your best interest first, not their own. In this guide, you’ll learn about the differences in advisor obligations to you, varying compensation models and how to hire.
The idea behind these guides is to create a series of just-in-time education modules on the key challenges people face in planning for retirement. Each of these brief guides will explain how to cope with a retirement challenge, and will offer useful tips and resources. Each guide also will be paired with a podcast conversation with a top expert on the topic at hand.
The subscriber-only series launched last week focusing on one of the most important - and most complex - retirement challenges: the transition to Medicare from other types of insurance.
Podcast interview: Sheryl Garrett
This week’s guide is paired with a podcast interview with Sheryl Garrett, a Certified Financial Planner and a leading figure in the movement to educate Americans about the importance of trustworthy fiduciary advice. Please enjoy the excerpt from our interview by clicking on the player icon at the top of this page.
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This week, I’m excited to let you know about the launch of a new series of retirement guides that I am creating exclusively for subscribers to this newsletter. The idea is just-in-time education on the key challenges people confront in planning for retirement. Each of these brief guides will explain how to cope with a retirement challenge, and will offer useful tips and resources. And they will be paired with a podcast conversation with a top expert on the topic at hand.
The series launches this week focusing on one of the most important - and most complex - retirement challenges: the transition to Medicare from other types of insurance.
This transition is fraught with pitfalls that can be costly. Signing up for Medicare at the right time is critical, along with understanding when the program’s coverage is primary. Getting this wrong can lead to costly lifetime late enrollment penalties on Part B premiums, and lengthy gaps in your insurance coverage.
My guest on the podcast is Joe Baker, who just retired as president of the Medicare Rights Center. Joe is one of the most knowledgeable people in the United States on Medicare. His organization is a non-profit that advocates for improvements in Medicare, and provides consumer advice and assistance.
Please enjoy an excerpt from my conversation with Joe in this week’s podcast - click the player above.
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To receive the Medicare Transitions guide, take advantage of the Spring subscription offer I’m running right now. Subscribe now to receive 50 percent off your first year. Click here to subscribe, or use the little green button.
Next week: How anyone can afford a financial adviser
Next week’s guide and podcast: how to hire a financial planner. This one features a discussion with Sheryl Garrett, a visionary who has done more than most to promote the idea of unbiased, conflict-free fiduciary financial planning. Sheryl is a CFP and founder of the Garrett Planning Network. She has pioneered the notion of inexpensive hourly advice that does not cost a fortune, and her work recently was recognized with theInvestment News ICON award for 2019. Sheryl is the author of numerous books, including Personal Finance Workbook For Dummies.
Subscribers also will receive my brief guide to this important topic, and a free chapter download from Sheryl’s book.
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Economists call it the “old-age dependency ratio” - a rough measure of the balance between people who work and retirees.
The ratio compares the number of people over age 65 - classified as “old” - with those aged 15 to 64 - and it is not headed in a healthy direction: by 2040, there will be 2.7 working-age Americans for each retiree, down from 4.8 in 2010.
That number from the Federal Reserve Bank of Atlanta points toward a shortfall of workers available to support an aging population, and it is cited often to justify doom-and-gloom warnings about economic growth, federal spending and the health of our social insurance programs.
But don’t tell that to Chris Farrell. The senior economics contributor to "Marketplace," American Public Media’s nationally syndicated public radio business and economic program, is bullish on aging. Farrell is the author of a new book, Purpose and a Paycheck: Finding Meaning, Money, and Happiness in the Second Half of Life, that seeks to upend a range of myths about old age and dependency, replacing them with a new vision of contribution to society and purpose-driven living.
In this week’s podcast, I talk with Chris about some of the key ideas in his book:
Why the "dependency ratio" is nonsense;
Who is working longer - and why;
Which industries and companies are accommodating older workers;
The influence of women on the composition of an older workforce;
Government polices that could make it easier for people to work longer.
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This podcast is excerpted from a series delivered each week to subscribers of the RetirementRevised newsletter. The newsletter delivers a concise summary of the week’s news on the retirement and aging beat, along with my most recent articles for Reuters, WealthManagement.com, Morningstar.com and The New York Times. Each edition includes a premium, full-length podcast featuring top experts on retirement planning and investing, Social Security and Medicare and the challenges of working longer.
Recent episodes have featured:
Nancy Altman, a leader in the progressive movement to strengthen and expand Social Security - and a scholar on Social Security’s history who has written several important books on the program;
Jill Schlesinger, the personal finance guru at CBS News and author of The Dumb Things Smart People Do with Their Money;
Mitch Tuchman, a pioneer in robo-advisory services and founder of Rebalance;
Elizabeth White, author of 55, Underemployed, and Faking Normal, a remarkable personal narrative about the traumatic experience of job loss at midlife.
Richard Johnson, director of the program on retirement policy at The Urban Institute, for a discussion of the pros and cons of a higher Social Security retirement age.
Dan Prescher, co-author of The International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25,000 a Year.
I hope you’ll agree that the newsletter and podcast are a great way to stay on top of trends in retirement and aging.
Click here to view a sample edition of the newsletter, featuring my podcast interview with Jill Schlesinger. Or, just click the little green button below. You know what to do.
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What is the state of the job market for older workers? How can we better manage our careers as an asset that is part of a retirement plan? What are the prospects for people thinking of launching second careers as entrepreneurs.
This week on the RetirementRevised.com podcast, we get the view on these questions from two of the nation’s top experts on 50+ careers - Kerry Hannon and John Tarnoff. Both are speakers and best-selling authors, with books to their credit advising older workers on how to navigate the job market. But they look at the 50+ job market through somewhat different lenses.
Kerry is a journalist by background; her most recent book is Great Jobs for Everyone 50+, and she has a new book coming on this spring focused on older entrepreneurs, called Never Too Old to Get Rich: The Entrepreneur’s Guide to Starting a Business Mid-Life.
John has worked as an executive and producer in the entertainment industry, and as a technology entrepreneur. His own career hit a wall at age 50, which led him to his current work as a career coach helping people navigate job transitions. In 2017 he published a best-selling book, Boomer Reinvention: How to Create Your Dream Career Over 50. In 2017, he was named by PBS/Next Avenue as one of its Influencers In Aging.
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This podcast is excerpted from a series delivered each week to subscribers of the RetirementRevised newsletter. The newsletter delivers a concise summary of the week’s news on the retirement and aging beat, along with my most recent articles for Reuters, WealthManagement.com, Morningstar.com and The New York Times. Each edition includes a premium podcast featuring top experts on retirement planning and investing, Social Security and Medicare and the challenges of working longer. Recent episodes have featured:
Nancy Altman, a leader in the progressive movement to strengthen and expand Social Security - and a scholar on Social Security’s history who has written several important books on the program;
Jill Schlesinger, the personal finance guru at CBS News and author of The Dumb Things Smart People Do with Their Money;
Mitch Tuchman, a pioneer in robo-advisory services and founder of Rebalance;
Elizabeth White, author of 55, Underemployed, and Faking Normal, a remarkable personal narrative about the traumatic experience of job loss at midlife.
Richard Johnson, director of the program on retirement policy at The Urban Institute, for a discussion of the pros and cons of a higher Social Security retirement age.
Dan Prescher, co-author of The International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25,000 a Year.
I hope you’ll agree that the newsletter and podcast are a great way to stay on top of trends in retirement and aging.
Click here to view a sample edition of the newsletter, featuring my podcast interview with Jill Schlesinger. Or, just click the little green button below. You know what to do.
Subscribe at retirementrevised.substack.com
My guest on the podcast this week is Mitch Tuchman, a pioneer in what we now call the roboadvisor business - that is, investment advisory services that rely on software and algorithms to manage client portfolios. Mitch saw the need for a new low-cost approach to portfolio management back in 2008 when he started MarketRiders, one of the very first robos. But the model quickly evolved beyond just software to a blend of technology and human advice in the successor company he started, called Rebalance
Mitch has an interesting personal story - Rebalance is a second career that was born out of a deeply personal mission stemming from challenges that his own family faced. We talked about that, and a range of other current topics in the retirement investing world, including what he thinks people approaching retirement really need today in terms of planning services. We also reflected on the legacy of Jack Bogle, the founder of Vanguard who passed away recently.
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The in-depth version of this interview is available to subscribers to the RetirementRevised newsletter. I’m making this shortened version of the podcast available for free.
But even this free version contains none of the annoying advertising you face - or jump past - in most of your favorite podcasts. My pledge to you: I will never talk to you in my most sincere voice about the most comfortable mattress I’ve ever slept on, or the best meal delivery service on the planet. Even more important - no pitches for investment products, insurance or anything else. The RetirementRevised podcast is ad free now, ad free forever!
You’ll also receive the newsletter each week, chock full of my rantings on the key news of the week - stuff my editors would never let me print, but hey this a newsletter, just between you and me. This week, I look at the regulation formerly known as fiduciary - the SEC “Regulation Best Interest.” Find more info on the newsletter here, along with a link to a recent sample edition.
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My guest this week on the podcast is Richard Johnson. Rich directs the program on retirement policy at The Urban Institute in Washington, D.C. He is an economist by training, and a great deal of his research is focused on the labor market for older workers, and their employment and retirement decisions.
Recently Rich published an intriguing paper with a question in the title -- “Is it time to Raise the Social Security Retirement Age?” This is an idea that crops up often as a partial fix for the long-term financial challenges facing Social Security. It usually is justified by pointing to gains in longevity - if we’re all living longer, we should wait longer for Social Security benefits - right?
This isn’t the only idea out there for fixing Social Security’s financial problems, of course. The other way is to raise more money through higher payroll tax rates or other taxes. And the Democratic Party increasingly is looking to expansion as part of the fix.
Johnson’s paper does a great job of analyzing the retirement age question, looking at the pro and con arguments in great detail. Give it a listen.
This is listener-supported media - so subscribe already!
The in-depth version of this interview is available to subscribers to the RetirementRevised newsletter. I’m making this shortened version of the podcast available for free.
But even this free version contains none of the annoying advertising you face - or jump past - in most of your favorite podcasts. My pledge to you: I will never talk to you in my most sincere voice about the most comfortable mattress I’ve ever slept on, or the best meal delivery service on the planet. Even more important - no pitches for investment products, insurance or anything else. The RetirementRevised podcast is ad free now, ad free forever!
If you haven’t thought about subscribing to the newsletter, do it now - this is listener-supported media. It’s the future, so please get on board!
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My guest on the podcast this week is Elizabeth White -- author of a remarkable recent book on the traumatic experience of job loss at midlife - 55, Underemployed, and Faking Normal.
We hear so often about out-of-work baby boomers and the problem of age discrimination. But Elizabeth has written an intimate account of what happened in her own life when the bottom fell out in 2008 and 2009. She wrote the book after speaking out about her experiences in a 2016 Facebook post that went viral, called You Know Her:
You know her.
She is in your friendship circle, hidden in plain sight.
She is 55, broke and tired of trying to keep up appearances. Faking normal is wearing her out.
To look at her, you wouldn’t know that her electricity was cut off last week for non-payment or that she meets the eligibility requirements for food stamps. Her clothes are still impeccable, bought in the good times when she was still making money.
But if you paid attention, you would see the sadness in her eyes, hear that grace note of panic in her otherwise commanding voice.
The overwhelming reader response to that essay allowed Elizabeth to include in her book the voices of many other older Americans struggling with the uncertainty and loss of income that comes with being cast out of the job market earlier than they expected or wanted.
For this week’s podcast, Elizabeth and I talked about her career story, how things went south and how she has found equilibrium - also, her tips on how people can "small up."
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The in-depth version of this interview is available to subscribers to the RetirementRevised newsletter. I’m making this shortened version of the podcast available for free.
But even this free version contains none of the annoying advertising you find in most of your favorite podcasts. No sincere pitches from me on the most comfortable mattress you’ve ever slept on or the best meal delivery service on the planet. Ad free now, ad free forever!
If you haven’t thought about subscribing to the newsletter, do it now - this is listener-supported media. It’s the future, so get on board.
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My guest on the RetirementRevised podcast this week is Jill Schlesinger. You probably know Jill from her reports on business for CBS News, or her national weekly radio program on personal finance, Jill on Money.
Jill has just published her first book, The Dumb Things Smart People Do with Their Money. I don’t read many personal finance books or write about them very often - too often, they seem like homework and use simplistic formulas. Or, they’re selling a get rich quick formula (Bitcoin in your retirement account comes to mind). But Jill has a knack for boiling things down, and her great sense of humor makes it all go down easy. So do the funny stories she tells about her own financial mistakes along the way.
Before getting into journalism, Jill got her start on Wall Street, and she also is a certified financial planner. In her book, she runs through 13 of the most costly blunders people make with money; we focused our conversation on four of those mistakes that can do real damage to a retirement plan.
The in-depth version of this interview is available to subscribers to the RetirementRevised newsletter, along with my analysis of key things to keep in mind if you are contemplating retirement abroad. I’m making this shortened version of the podcast available for free.
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Subscribers get the full-length podcast interviews, plus my weekly deep dive into news and trends about retirement and aging via email. The newsletter aims to provide a must-read weekly summary of developments for retirement and aging professionals – and for anyone else with a deep interest in the field.
The first edition of the podcast a few weeks ago featured Nancy Altman, who heads up Social Security Works, one of the key grassroots group pushing for expansion of Social Security and an admired historian of the program. Last week, I spoke with Dan Prescher of International Living magazine about retirement abroad. And next week, my guest will be Elizabeth White - author of 55, Underemployed, and Faking Normal, just out from Simon and Schuster. Elizabeth’s book is an intimate account of the loss of employment and career at midlife - both her own, and hundreds of people who she has spoken with since she first started speaking out on the topic in 2016. Don’t miss it!
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My guest on the RetirementRevised podcast this week is Jill Schlesinger. You probably know Jill from her reports on business for CBS News, or her national weekly radio program on personal finance, Jill on Money.
Jill has just published her first book, The Dumb Things Smart People Do with Their Money. I don’t read many personal finance books or write about them very often - too often, they seem like homework and use simplistic formulas. Or, they’re selling a get rich quick formula (Bitcoin in your retirement account comes to mind). But Jill has a knack for boiling things down, and her great sense of humor makes it all go down easy. So do the funny stories she tells about her own financial mistakes along the way.
Before getting into journalism, Jill got her start on Wall Street, and she also is a certified financial planner. In her book, she runs through 13 of the most costly blunders people make with money; we focused our conversation on four of those mistakes that can do real damage to a retirement plan.
Illinois debate raises questions on taxing retirement income
Illinois is one of the few states that have an income tax but do not tax any retirement income. Two leading business groups recently renewed their calls to change that as part of broader, desperately needed fiscal reforms. The ensuing debate casts a spotlight on an important national conversation about how states should tax retirement income, if at all.
The federal government taxes income from tax-deferred retirement accounts, but Social Security benefits for lower-income retirees are exempt. And taxpayers over age 65 also can take an extra deduction of $1,300 (joint filers) or $1,600 (single filers).
But state policy is all over the map. Data provided by the Institute on Taxation and Economic Policy shows that 11 states tax some portion of Social Security benefits, usually mirroring the federal formula. Many others tax pensions and tax-deferred accounts, although some have exemptions that protect lower-income, public sector workers and military personnel.
Aside from Illinois, just two other states that levy income taxes exempt all retirement income: Mississippi and Pennsylvania.
Learn more in my Reuters Money column this week. You can find more detail on how retirement income is taxed in this backgrounder.
Who spends the big lobbying bucks in financial services?
The fight to protect retirement investors from conflicted advice has been long and difficult. If you’ve ever wondered why some politicians are so eager to fight against the best interests of their own constituents, check out this new ranking of the largest expenditures for lobbying by financial services firms. It’s dominated by trade groups for stock and insurance brokerages and Wall Street. Keep that in mind as you watch the Securities and Exchange Commission cobble together something to replace the U.S. Department of Labor’s now-deceased fiduciary rule.
The SEC is calling its rule “Regulation Best Interest,” and it would be a win for the traditional commission-based stock brokerage industry. As one dissenting commissioner has said, “Perhaps it would be more accurate to call it regulation status quo.”
Jack Bogle, inflation fighter
Vanguard founder Jack Bogle, who passed away in January at 89, sparked an investing revolution by inventing low-cost, passive mutual funds. Some experts think the Vanguard effect puts $100 billion or more back into investors’ pockets every year.
But it turns out you can measure this another way, as Jeff Somer reports in The New York Times:
Now, it turns out, cost savings from various types of index funds, run by Vanguard, BlackRock, Fidelity, Schwab, State Street and others, are having a measurable impact on inflation much as prices for groceries and gasoline do.
In January alone, the Bureau of Labor Statistics found, overall portfolio management costs in the United States “plunged 5.2 percent,” Michael Feroli, the chief United States economist at J. P. Morgan, said in a note on Feb. 14.
Until then, I hadn’t realized that the government tracked management expenses paid by investors. But Mr. Feroli set me straight. He said the effect of falling fees was great enough to make a difference in inflation numbers broadly.
In an email, he said most of the decline in portfolio costs, which the Bureau of Labor Statistics incorporates in the Producer Price Index, could be attributed to cuts in fund fees. That includes traditional mutual funds and exchange-traded funds, a type of index fund.
Who knew? Certainly not me.
Falls can kill you; here’s how to minimize the risk
Falls are the leading cause of fatal and nonfatal injuries among older adults. Every 19 minutes in this country, an older person dies from a fall. But falling is not an inevitable consequence of aging, notes New York Times aging columnist Jane Brody. Most age-related falls are preventable once you know why they happen and take steps to minimize the risk for yourself, relatives and friends whose age or health status renders them especially vulnerable.
Coming up on the podcast
Next week, I’ll be talking with Elizabeth White, author of 55, Underemployed, and Faking Normal, just out from Simon and Schuster. Elizabeth’s book is an intimate account of the loss of employment and career at midlife - both her own, and hundreds of people who she has spoken with since she first started speaking out on the topic in 2016. Don’t miss it!
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The idea of retiring abroad holds a certain allure: great weather, new experiences and a fresh perspective on life. And then there are the living costs: living abroad can be a way to cut expenses dramatically.
How dramatically? My guest on the podcast this week, Dan Prescher, is the co-author of The International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25,000 a Year.
Prescher is senior editor of International Living, a magazine and website that can be a terrific resource for anyone thinking about retiring abroad. Dan and his wife Suzan have lived in four countries over the past 18 years as they research and write about the ex-pat lifestyle. International Living publishes an annual Global Retirement Index that ranks top destinations. This year, they also feature a break-out of the types of extra “benefits” retirees get in various countries, mainly big discounts on transportation, entertainment and the like.
But it’s important to understand that retirement abroad can be complicated. In this week’s podcast, I interview Dan about how to pick a location, along with implications for your finances, healthcare and more.
The in-depth interview is available to subscribers to the RetirementRevised newsletter, along with my analysis of key things to keep in mind if you are comtemplating retirement abroad. I’m making this shortened version of the podcast available for free.
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If you haven’t checked out subscription to the weekly RetirementRevised newsletter, please consider it now! The weekly podcast is just getting started, and will feature interviews with some of the smartest people around on retirement aging. The first edition last week featured Nancy Altman, who heads up Social Security Works, one of the key grassroots group pushing for expansion of Social Security and an admired historian of the program.
Along with the weekly podcast, you’ll get my weekly deep dive into news and trends about retirement and aging via email each week. The newsletter aims to provide a must-read weekly summary of developments for retirement and aging professionals – and for anyone else with a deep interest in the field.
Learn more about the newsletter here, or click the little green button below to subscribe now. $10 per month or $120 annually; cancel anytime with no obligation.
Subscribe at retirementrevised.substack.com
Welcome to the first edition of the RetirementRevised.com podcast!
The plan is to serve up interviews with the smartest people I can find on the retirement and aging beat - policy experts, researchers, economists, journalists and authors, financial planners and other top thinkers in the field. The podcast will be a weekly feature for paid subscribers to the RetirementRevised.com newsletter, and I’ll be tossing a few out for free, too (like this one). Probably once a week, we’ll see how it goes.
I’d love to have your feedback and ideas for future podcasts - drop me a note in the comments field on this page, or here.
This week . . .
My guest this week is Nancy Altman - one of the most knowledgeable people in the United States on Social Security. You may have heard of Nancy’s work as a progressive advocate for Social Security expansion - she heads up Social Security Works, one of the key grassroots group pushing for expansion as part of an overhaul that also would restore 75-year solvency to the program. But Nancy also wrote the book on the history of Social Security and why it should be expanded. Correction, she actually has written three authoritative books on Social Security. Nancy has been involved with Social Security policy since the 1980s, having served as a staffer on the Greenspan Commission, which crafted the last major Social Security reforms.
She also is a major mover/shaker on the latest proposals to expand Social Security, but I also wanted to chat with her about the program in the broader context of our current approach to retirement security. We discussed the evolution of the Democratic Party's approach to Social Security reform; the current proposal on the table in the House; the state of right wing privatization strategies; and the proper balance between private saving and Social Security.
Learn more
For further reading on some of the topics discussed on this podcast, check out Nancy Altman’s books. She also blogs at Huffington Post. I mentioned a study by the Urban Institute study on older workers and the risks posed to them by a higher retirement age; here’s a link to my recent column on that study.
Subscribe!
If you haven’t subscribed yet to the weekly newsletter, do it now! Along with the podcast, you’ll get my weekly deep dive into news and trends about retirement and aging via email each week. The newsletter aims to provide a must-read weekly summary of developments for retirement and aging professionals – and for anyone else with a deep interest in the field. Not every story – just the ones that matter most from the perspective of a journalist who has been covering the beat for nearly 15 years now.
Learn more about the newsletter here, or click the little green button below to subscribe now. $10 per month or $120 annually; cancel anytime with no obligation.
Subscribe at retirementrevised.substack.com