What Japan Can Teach Us About Long-Term Care...

Here’s a sobering calculation: The odds that Americans turning 65 today will eventually need assistance with bathing, dressing and other personal activities are about 50/50. And those who’ll need long-term care can expect to incur costs of $138,000, on average, estimate Melissa Favreault of the Urban Institute and Judith Dey of the U.S. Department of Health and Human Services. Yet people age 55 to 64 with retirement savings accounts have a median balance of $104,000 in them, according to the National Institute on Retirement Security, a nonprofit based in Washington, D.C. See the problem? America’s Broken Long-Term Care System Sad to say, America’s system for financing long-term care is badly broken. If we take a few ideas from Japan, though, we could help avoid a long-term care catastrophe. Japan has the highest proportion of people 65+ in the world. And 20 years ago, its long-term care approach looked much like the current failed U.S. system. But Japan took a few key initiatives in 2000 that are widely admired among long-term care policy experts. Before I explain what they did, first let me offer a brief look at the U.S. situation. Long-Term Care Financing in the U.S. America’s private long-term care insurance market is contracting and its policies are expensive. Only about a dozen companies now sell coverage, compared with about 100 more than a decade ago, according to Marc Cohen, chief research and development officer at LifePlans, a firm that helps health- and long-term care insurers manage risk. Tom McInerney, chief executive officer at Genworth, the nation’s largest long-term care insurer, estimates that between half and two-thirds of Americans can’t afford to buy in the traditional long-term care insurance market. A 60-year-old married couple would pay $3,930 per year, on...

The New Boomerang Workers: Rehired Retirees...

How to go back to work in retirement where you had a full-time job   You’ve no doubt heard about boomerang kids who return to their parents’ homes in their 20s (maybe you have one). But there’s a growing group of boomerangers who are typically in their 60s: retirees who return to work part-time or on a contract basis at the same employers where they formerly had full-time jobs. If you’ll be looking for work during retirement, you might want to consider avoiding a job search and becoming one. Employers That Rehire Their Retirees A handful of employers have formal programs to rehire their retirees. The one at Aerospace Corp., which provides technical analysis and assessments for national security and commercial space programs, is called Retiree Casual. The company’s roughly 3,700 employees are mostly engineers, scientists and technicians, and Aerospace is glad to bring back some who’ve retired. “With all the knowledge these people have, we get to call on them for their expertise,” says Charlotte Lazar-Morrison, general manager of human resources at Aerospace, which is based in El Segundo, Calif. “The casuals are part of our culture.” The roughly 300 Aerospace casuals (love that term, don’t you?) can work up to 1,000 hours a year and don’t accrue any more benefits (the company’s retirees already get health insurance). Most earn the salary they did before, pro-rated to their part-time status, of course. Why Aerospace Corp. Brings Back ‘Casuals’ The “casuals” program lets Aerospace management have a kind of just-in-time staffing system. “It allows us to us to keep people at the ready when we need them,” says Lazar-Morrison. Ronald Thompson joined Aerospace’s casuals in 2002, after retiring at age 64. He’d worked for the company full-time since 1964,...

What It Takes to Turn Your Passion Into a Career...

Enthusiasm isn’t enough. Follow these tips from the author of ‘What Is Your What?’ (The following is an adaptation from What Is Your WHAT?, the new New York Times bestseller by Steve Olsher. You can now get a free copy of the book at the What Is Your WHAT? website.) We’re often told that if we pursue our passion and do what we love as a career, we will — to quote Confucius — never have to work a day in our life. And let’s not forget Oprah who popularized the phrase: “Do what you love and the money will follow.” In theory, pursuing your passion as a career should be easy, effortless and create a monetary nirvana where income flows and happiness prevails. Reality, however, demonstrates that few who follow such advice will ever reach their desired destination. When Passion-Following Turns Sour It seems like a dirty trick. We’re encouraged to chase the carrot and before we know it, we’re miles down the rabbit hole with nothing to show for our efforts but mountains of debt that may take decades to repay. Consider the countless examples of those who quit their day jobs to pursue passion-related opportunities (cupcakes anyone?) only to end up emotionally, spiritually, and financially drained. When you throw in the harsh realities of capitalism, the happy-go-lucky “if you build it, they will come” rhetoric is a blatant disservice to those who lack clarity on the elements truly needed to bring their anticipated utopia to fruition. Now, before the hate mail starts rolling in, I’m not saying passion isn’t important. I am saying that you need to focus on cultivating a sustainable career… not merely engaging in a hobby. Creating a flourishing existence that provides a...

Federal Agency Jobs Just for People 55+...

These two programs specifically want older workers to fill their openings Gary Olson put in 32 years as an analytical chemist at Kodak in Rochester, N.Y., including stints in R&D and on digital innovations. “I had a great career there,” Olson says. “I was never bored.” But worn down by Kodak’s constant restructuring and layoffs, in January 2002, at 56, Olson took a generous buyout offer. He and his wife moved to Seattle, Wash. to be closer to their daughter and her family and Olson kicked back for a few years. In 2005, he spotted a Craigslist job posting by the National Asian Pacific Center on Aging for a “senior environmental employee” at the U.S. Environmental Protection Agency (EPA). The Senior Environmental Employment Program and position were reserved for workers 55 and older. Intrigued, he applied. “I wasn’t going to do what I did for more than 30 years,” says Olson. “I wanted to do something different.” He got the job. The 2 Programs for Workers 55+ Ever heard of the EPA’s Senior Environmental Employment Program, which has been around for 31 years? How about the comparable, seven-year-old Agriculture Conservation Experienced Services Program of the U.S. Department of Agriculture? I hadn’t. These jobs are specifically designed to tap into the experience of boomers, yet not once in interviews for my Next Avenue column on job opportunities for people in their 50s and 60s did these programs or ones like them come up. (The idea for this column came from my editor who learned about them at the American Society on Aging’s recent Aging in America Conference. ) “Older workers are a largely untapped resource,” says Gregory Merrill, President and Chief Executive Officer of the National Older Worker Career Center,...

6 Credit Score Myths Debunked...

How these scores really work and can affect your finances You likely know that your credit score is the litmus test lenders use to determine whether you’ll be a responsible borrower and deserve to be approved for loans and credit cards. But there’s a good chance you have one or more misconceptions about how credit scores are calculated and what can nick yours. While the actual calculations used by the three major credit reporting bureaus (TransUnion, Equifax and Experian) are confidential and complex, the underlying concept behind them is fairly straightforward: if you have a history of paying your loan payments on time and in full, generally you’ll have a great credit score. Credit scores may seem a bit complex and convoluted. However, it pays to understand how they work so you can make informed decisions about your finances. Here are six of the most common credit score myths to stop believing: Myth No. 1: Closing out your credit cards improves your credit score. If you’re thinking about terminating a card to boost your credit score, think again before you reach for the scissors. Here’s why: One of the five factors that determines your credit score is your debt utilization ratio, which is how much debt you carry relative to how much credit is available to you. So when you close a credit card, your available credit decreases, your debt utilization ratio increases and your credit score drops Myth No. 2: Closing a credit card erases its history from your credit report. Some people believe that once you close a credit card, its history disappears. This is false. Sure, it would be great if late payments and overdrafts on a card could be wiped away by closing the card....

Retirement Health Costs: Planning for the Wild Card...

What you might owe and 8 ways to prepare Be honest, now: When you do your retirement planning, do you factor in potential health care costs and long-term care costs? Odds are, you don’t, figuring there’s no way to know what they might be — not to mention the subject is depressing and the numbers could be scary. But ignoring what Ken Dychtwald, CEO of the aging consultancy Age Wave agewave.com, calls “the retirement wild card” could be the biggest retirement planning mistake you’ll ever make. And you actually can plan for health and long-term care costs; I’ll give you eight ways shortly. Age Wave and Merrill Lynch today released a fascinating, if disconcerting report (Health and Retirement: Planning for the Great Unknown) based on a comprehensive survey of 3,303 adults. They call health care expenses “the missing link in retirement planning.” The Survey Says… Five of the survey’s striking findings: Health care expenses are the top financial concern for retirement among Americans age 50+, regardless of their wealth level Only 15 percent of pre-retirees have tried estimating how much money they might need for health care and long-term care in retirement Just 7 percent of those 55 to 64 feel very knowledgeable about Medicare options; a mere 19 percent of Medicare recipients do 71 percent of couples age 50+ haven’t discussed how much they need to save to pay for health care during retirement Health problems were the No. 1 reason people retired earlier than expected Nationwide Insurance has also polled boomers about retirement health care costs. “The one word that comes up is ‘terrified,’” says Kevin McGarry, director of the Nationwide Financial Retirement Institute. The danger of not penciling out health- and long-term care costs, and taking...

Why 50+ Women Should Take Control of Their Money...

It’s not too late to start managing your financial future. Here’s how. When I ask my working girlfriends when they plan to retire, or if they plan to retire, I usually get a quizzical look — and then a shrug. Most of them are in their 50s and 60s and they all seem to think the notion of not working for pay is rather unrealistic. Why? “If I stop bringing home a paycheck of some sort, I’m afraid I’ll outlive my money,” one of my college friends, who is single, told me recently. Even the ones who are married and have a spouse who has presumably also been socking money away echo that deep-seated sentiment. It’s there lurking in the shadows and pushing many of us out of bed to get to work: the bag lady specter. While I truly dislike this image, there is a grain of reality in the fear. Retirement Fears Are Pervasive A 2013 survey from PNC Financial Services Group found that more than half of women agreed with the statement: “I’m afraid I may not be able to retire.” And 38 percent of women said they believed they were prepared for retirement; 48 percent of men felt that way. For women over 50, the stakes are especially high. “Women age 50 and older — especially unmarried women — face extreme financial risks and potential poverty in retirement,” Transamerica Center for Retirement Studies President Transamerica Center Retirement Research told me. Many of these women who Transamerica has surveyed say they plan to work until age 70 or later or don’t plan to retire at all. That plan, however, might be faulty. “Life’s unforeseen circumstances such as health issues or a job loss can derail the...

Social Security: Best Ways to Max Out Your Benefit...

A ‘Get What’s Yours’ author says claiming as early as you can is ‘crazy’ You think taxes are complicated? Try figuring out the best time and best way to claim your Social Security benefits. Laurence J. Kotlikoff, co-author of Get What’s Yours: The Secrets to Maxing Out Your Social Security says: “There are 2,728 rules in Social Security’s handbook and maybe another 500,000 — it’s impossible to count them.” Hence the instructive 324-page book he just published along with financial writer Phillip Moeller and PBS NewsHour business and economics correspondent Paul Solman, to help people make wise Social Security claiming decisions. How Much We Expect From Social Security “At the beginning of this project, my coauthors thought I was far too angry about Social Security. They didn’t get my anger because they didn’t know the rules,” Kotlikoff told me. “By the end, they were saying tougher things than I would.” Although Kotlikoff is a Boston University economics professor, his book is anything but academic. After all, according to a Bankrate.com survey to be released tomorrow, 27 percent of Americans expect Social Security to account for at least half of their retirement income. I recently interviewed Kotlikoff for his advice on how to get the biggest Social Security benefit allowable. “There’s no perfect rule for everyone. You need to be strategic about your options,” he said. Highlights of our conversation: Next Avenue: Why is it so hard for people to figure out when and how they should claim Social Security? Kotlikoff: The bureaucrats and politicians over the years have made this the most complicated social insurance system you can imagine. Everything you say about Social Security has to come with a ‘but’ or an ‘if’ or five ‘buts’ or ‘ifs.’...