Eldercare Locator – A Free, Public Service For Connecting Older Adults and Caregivers with Community Resources

The Eldercare Locator is a service of the U.S. Administration on Aging.  It’s been around for nearly 20 years.  Its toll free number is 800-677-1116.  Its website is http://www.eldercare.gov.  It  provides information about long-term care alternatives, transportation options, caregiver issues and government benefit eligibility.  This information is also available in Spanish and other languages.  There is an extensive database of links, publications, and other resources.

ID Thieves Target Kids

The latest form of identity theft doesn’t depend on stealing your Social Security number, according to an article published by the Milwaukee Journal Sentinel. Now thieves are targeting your children.

Nowadays children have Social Security numbers practically from birth, years before they even think about establishing a credit rating. Unscrupulous businesses are using computers to find these dormant Social Security numbers, and selling those numbers to help people establish phony credit and run up huge debts they will never pay off.

Online companies use computers and publicly available information to find random Social Security numbers. The numbers are run through public databases to determine whether anyone is using them to obtain credit. If not, they are offered for sale for a few hundred to several thousand dollars.

Because the numbers often come from young children who have no money of their own, they carry no spending history and offer a chance to open a new, unblemished line of credit. People who buy the numbers can then quickly build their credit rating in a process called “piggybacking,” which involves linking to someone else’s credit file. Many of the business selling the numbers promise to raise customers’ credit scores to 700 or 800 within six months.

If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again, causing a steep spiral of debt that could conceivably go on for years before creditors discover the fraud.

The crime can come back to hurt children when they get older and seek credit for the first time, only to discover their Social Security number has been used by someone else.

Experts say the fraud is difficult to stop because it’s so easily hidden and targets such vulnerable people. Other than checking with the credit bureaus to see if there is a credit file associated with your child’s Social Security number, there are no specific tools for safeguarding the number.

The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies (Equifax, Experian, and TransUnion) every 12 months.  (AnnualCreditReport.com is the only authorized source for the free annual credit report that’s yours by law.)

Monitoring your credit is one of the best ways to spot identity theft. The Federal Trade Commission recommends checking your credit report at least once a year to correct errors and detect unauthorized activity. Rather than getting three reports at once, we advise people to obtain one credit report every four months from one of the three credit reporting companies on a rotating basis. By requesting the reports separately, you can monitor your credit more frequently throughout the year.

We’ve always recommended doing it for yourself. Now do it for your kids too.

Enroll for Medicare Online

The Social Security Administration (SSA) has just launched a new service that allows people to enroll online for their Medicare benefits even if they are not yet ready to file for Social Security benefits. About a half million Americans enroll in Medicare each year without applying for Social Security benefits.

The new online Medicare application makes it easier for people to enroll in Medicare. It saves a trip to the Social Security office, and you can complete the application at your own pace at home. The SSA says it takes less than 10 minutes to complete.

You can use the online Medicare application if you are at least 64 years and 8 months old, do not want to start receiving Social Security benefits in the next four months, and live in the U.S. or one of its territories or commonwealths. The application guides you through a brief set of questions that will help you consider either filing for Social Security and Medicare benefits, or filing only for Medicare. There are links to more information for people who have questions.

To use the new online application, click here.

Baby Boomer Social Security Dilemma Revisited

If an opinion piece in the Sunday Milwaukee Journal Sentinel Crossroads section is any indication, there is going to be a lot of discussion of the subject of Social Security in the years to come. Not all will be good advice.

In the article (To collect or not to collect), Carolyn Kott Washburne shares her personal struggle with the decision about whether or not to start collecting Social Security benefits at age 66. The author had a friend do the math and determined she would have to live to age 80 to recoup what she would lose by not starting at age 66.

The decision seems shortsighted to me. By focusing solely on how long she will have to live to break even if she delays collecting until age 70 – at which time her checks will be almost 30 percent more than if she starts collecting at 66 – she omits pertinent factors in making a sound decision.

She does not consider what affect her decision will have on a spouse. Taking it earlier may decrease the amount her spouse can take, depending on his work history. And it appears she doesn’t expect to live to age 80 or beyond even though her life expectancy is 84. In fact, life expectancy statistics indicate that she has a 50 percent chance of surviving past age 84, and 33 percent chance of living beyond 93. Every day people spend a lot of cash on lottery tickets with much higher odds against them.

I am about to leave on vacation so you probably won’t be hearing from me until the end of next week. At that time I intend to pick up where I left off with my thoughts regarding long-term care insurance.

Statistics – Long-term Care Insurance

I have discovered that getting good statistics on long-term care is equally as difficult as getting them for disability. After reading the New York Times article on disability statistics, I couldn’t help thinking that there might be the same problems with what was being said to encourage people to buy long-term care insurance. I made some inquiries and today I got a 137-page report on the subject from the Society of Actuaries.

I intend to read it this weekend. I’ll report back next week with my conclusions.

This is especially important to me because I am in the process of buying long-term care insurance for my wife and myself. As many of you may know, I have been an advocate of this insurance. Now I’ll be forced to reexamine my thoughts on the matter.

There are Statistics, and then there are Statistics

On Saturday, February 6, the New York Times had a great article about disability insurance. As a lawyer dedicated to helping people protect their families and businesses, the article shed light where there had been little in the past.

My experience is that disability planning tends to be neglected. Few do it, but nearly everyone should. In an earlier blog entry, I discussed one element of disability; setting aside cash equal to six months to two years of gross income. The New York Times article discusses disability insurance as a legitimate planning tool. The article points out that insurance companies and planners have been overstating the odds of being disabled. For years we have been hearing that a 25-year-old has an 80 percent chance of suffering a disability before age 65 that would result in being out of work for at least 90 days.

As it turns out, for a variety of reasons, this was not accurate. An analysis by the Disability Experience Committee of the Society of Actuaries shows that a 25-year-old actually has a 30 percent chance. Actuaries are high-power mathematicians trained to do these studies.

Personal factors can make your chance even less. White collar workers have less chance. If you have no chronic conditions, eat healthy, and avoid cigarettes, your odds may drop to 10 percent.

Even then, disability planning is important. You may get little or no disability pay from your employer. Social Security may not provide help. It can take more than a year for your claim to be processed. If you have to appeal, it will be much longer. Besides, Social Security disability payments may be too small to cover your needs.

If you are interested in more information on this subject, you can find the original article and additional details here.

Continued Travails of a Baby Boomer

Like many, I get my health insurance through my spouse’s employer. It’s great coverage, but things really change when I turn 65 and am eligible for Medicare. I will no longer get coverage. That is not necessarily the result for all employer plans. You need to check the actual policy to be sure.

In any event, I have to make sure I have alternative insurance in place when I turn 65. I don’t want to be like a client I once had who also lost coverage at 65 and assumed that he was automatically enrolled in Medicare. He continued to work and did not apply for Social Security. About three months after turning 65, he had a major medical problem that cost tens of thousands of dollars. That’s when he found out that he did not have insurance and did not have Medicare. He was on the hook for all of it. Needless to say, it put a dent in his retirement plans.

Medicare has four components: Part A is hospital insurance, Part B is medical insurance (physicians, outpatient services, medical supplies and home health care), Part C is the alternative option of managed care, and Part D is the prescription drug benefit.

People are automatically enrolled in Part A when they apply for Social Security. For people like me who are not going to apply for Social Security until later, there is a separate Medicare application. I intend to get started on that application at least 90 days before I turn 65.

I am also going to get Part B. It’s not hard because everyone who gets Part A is automatically enrolled in Part B. You have to decline enrollment if you don’t want it. I am going to enroll in Part B (regardless of whether or not there is coverage under my wife’s insurance at that time) because there is a 10 percent penalty tacked on to the premiums for each 12 months of delay after age 65. I don’t want that additional cost later.

Besides Medicare, I am going to get long-term care insurance and a medigap policy. A medigap policy is health insurance sold by private insurance companies to fill the gaps in Medicare plan coverage. Medicare does not have any really effective benefits for long-term care, whether in the home, assisted living, or a nursing home. Medicare has gaps in coverage (some great names for them… donut holes). These policies will address those gaps.

We are all waiting anxiously for the outcome of the continuing healthcare debate in this country. It’s likely to go on for quite some time. But these are my conclusions for handling the baby boom problem, especially if you are not retiring at 65.

“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt

Travails of a Baby Boomer

I admit, begrudgingly, that I am a baby boomer and will turn 62 this year. Like many of my generation, I have no intention of retiring. Some are making that decision as a matter of necessity. Others, like me, are continuing to work because they like what they do.

In any case, age 62 (and then 65) requires some real important decisions.

The first decision is whether to start taking Social Security. This decision is laden with fear about the financial soundness of Social Security. You can start at 62. Right out of the box, many will say, “I am going to take Social Security now because Social Security is bankrupt and I want to get as much of my hard-earned money back as I can.” Understandable, but for some this may not make sense. There are other things to consider. If you take Social Security at 62, you get less. How much less? About 20 percent as compared to the amount received if you wait until your full retirement age.

And this reduction affects more than just you. If your spouse will receive Social Security based on your account at your death, then your spouse will also get less.

If you continue working like me, there is another consideration. There is an earnings penalty. If you earn more than a certain amount (It changes, but in 2009 it was $14,160), you lose $1 of every $2 above that amount. There is a different penalty in the year you would have been entitled to get full Social Security benefits. Once you reach full retirement age (66 for me), you can earn any amount without penalty. Besides the penalty, Social Security may be taxable to you. It’s complicated but it depends on your income.
I’ve decided to hold off on Social Security until age 69. The amount I will be entitled to will grow by eight percent between now and then. Plus, my income would wipe out my getting Social Security before the year I turn 68 anyway. And, taking it earlier would hurt my wife in terms of the amount she might receive after my death.

Next topic… Medicare.