Most Men Unaware that Early Retirement Adversely Impacts Their Spouse's Social Security Benefits

According to a recent study released by the Center for Retirement Research at Boston College (http://crr.bc.edu), most men begin drawing on their Social Security retirement benefits at age 62 or 63, rather than waiting until their full retirement age or even age 70.  The early receipt of benefits means that both the husbands and their wives will receive less each month than they would if they waited.

According to the study, written by Steven A. Sass, Wei Sun and Anthony Webb, this early election has no effect on average on the men.  On average, though men will receive a smaller benefit check each month, this will be offset by the checks they receive between the ages of 62 and normal retirement age.  Because this is based, on average, there are obviously exceptions.  For example, men who are in ill health would do better to take early retirement and men who expect to live a long time should postpone their receipt of benefits for as long as possible.

The same statements also hold true for single women, meaning on average they do about as well in terms of lifetime Social Security benefits no matter whether they start earlier and get more smaller checks or start later and receive fewer larger checks.

But for today's seniors, most wives' benefits are based on their husband's work record.  If husbands choose to take benefits before the full retirement age, their wives are penalized twice -- first while their husband's are alive when they get a reduced benefit, usually half of the husband's benefit, and second when the husband dies (which often happens due to women's greater life expectancy) when they receive their husband's benefit rather than their own.

If these decisions were based upon informed appreciation of the adverse impact upon the spouse's benefits, perhaps we could dismiss them as simple life choices. The researchers conclude, however, that they are not, that instead most retiring men simply don't understand the implications of claiming benefits early.  More education may change their behavior, although the researchers note that "financial education has not been especially effective in changing behavior." As an alternative, they suggest a number of potential policy changes, such as requiring spouses to sign off on the decision to claim Social Security before the beneficiary's full retirement age.

Interestingly, while the Social Security Administration's Web site (www.ssa.gov) has a number of excellent calculators to assist beneficiaries in deciding when to retire, none appear to calculate spousal benefits.  Based on the Boston College report, adding such calculators would be a good first step.

To read the report, go to:  http://bit.ly/10PhPBr.

Avoiding the Nursing Home - New Technologies Help Keep Seniors Safe and Healthy at Home

eNeighbor® Remote Monitoring System by  Healthsence®

A recent New York Times article explains how new technology is being used to help ensure the safety and health of elderly individuals who live at home. One such technology, called  “eNeighbor,” a system of sensors that are placed all over the home, is used to monitor the movements of elderly citizens and alert emergency responders if any non-typical movements occur, or if usual movements do not occur. The article relates the story of Bertha Branch to illustrate how eNeighbor works. Bertha is 78 and lives alone in her home. One morning, a wireless sensor under her bed detected that she had gotten out of bed, but other sensors in the house registered that she had not been to any of the other rooms in the house, including the bathroom attached to her bedroom. After it became clear that either Bertha was standing in the same spot when she normally would have already visited her bathroom or had fallen, eNeighbor system made phone calls to neighbors, family, and finally to 911. When firefighters arrived, Bertha had been on the floor, where she had fallen and found herself unable to get up, for less than an hour.

Other systems are used to remind and assist people in checking their vitals each day. The same machine can assess and record your weight, blood pressure, temperature, and send all of the information to a monitoring program. If your vitals show evidence of a risk to your health, a nurse from the monitoring program will call you and ask that you see your doctor right away. These, and other technologies also remind you to take medications, and ask questions that prompt new instructions. Machines may, for example ask questions like: “Are you experiencing more difficulty breathing today?” or “Are your ankles more swollen than usual?”

Of course, technologies like eNeighbor are new and unproven. They are also often expensive and are not yet covered by government benefits or private insurance plans. Doctors are also not yet trained to treat patients using remote data, and currently have no mechanism to be paid for doing so. And like all technologies, the devices — including motion sensors, pill compliance detectors and wireless devices that transmit data on blood pressure, weight, oxygen and glucose levels — may have unintended consequences, substituting electronic measurements for face-to-face contact with doctors, nurses and family members. 

But as similar technologies become more mainstreamed and dependable, they could be used to help ensure a higher quality of life for elderly citizens who live at home, and could allow them to stay at home much longer than they would have been able to before such technology existed.

Real the full New York Times article.

Reverse Mortgages Are Causing Some Homeowners to Lose Their Homes

A reverse mortgage can be a great tool in the right circumstances, but if you aren't careful you could end up losing your home. A recent front-page article in the New York Times lays out some of the problems homeowners are encountering with these mortgages.

You must be 62 years or older to qualify for a reverse mortgage, which allows you to use the equity in your home to take out a loan. The loan does not have to be paid back until you sell the house or die, and the loan funds can be used for anything, including providing money for retirement or to paying for nursing home expenses.

It all sounds like a no-lose proposition, but there are downsides. For example, these loans carry large insurance and origination costs, they may affect eligibility for government benefits like Medicaid, and they are not ideal for parents whose major objective is to safeguard an inheritance for their children. There also have been complaints about aggressive marketing techniques.

In addition to these drawbacks, the Times points out two more important potential pitfalls:

• Pay attention to whose name is on the mortgage. When purchasing a reverse mortgage, be sure to put both spouses' names on the mortgage. If only one spouse's name is on the mortgage and that spouse dies, the surviving spouse will be required to either pay for the house outright or move out. This might happen if only one spouse is over 62 when the mortgage is signed. According to the Times, some lenders have actually encouraged couples to put only the older spouse on the mortgage because the couple could borrow more money that way.

• Watch out for a lump-sum loan. Usually reverse mortgages come in a line of credit with a variable interest rate. This allows homeowners to take money only when they need it. According to the Times,some brokers have been pushing lump-sum loans because the brokers earn higher fees. The problem is these loans have a fixed interest rate. The interest charges are added each month, so that over time the total amount owed can surpass the amount of the original loan.

The Consumer Financial Protection Bureau, which was created in the wake of the mortgage crisis in part to scrutinize consumer mortgages, is working on new rules to better regulate reverse mortgage lenders and provide disclosures to seniors.

To read the New York Times article about reverse mortgages, click here

Single? You Still Need an Estate Plan

Many people believe that if they are single, they don't need a will and other estate planning documents. However, estate planning is just as important for single people as it is for couples and families.

Estate planning allows you to ensure that your property will go to the people you want, in the way you want, and when you want. If you do not have an estate plan, the state will decide who gets your property and who will make decisions for you should you become incapacitated. An estate plan can also help you save on estate taxes and on court costs for your loved ones.

The most basic estate planning document is a will. If you do not have a will directing who will inherit your assets, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children or to other living relatives if you don't have children. If you have absolutely no living relatives, then your estate will go to the state. You may not want to leave your entire estate to relatives -- you may have close friends or charities that you feel should get something. Without a will, you have no way of directing where your property goes.

Many single people have significant others, perhaps with whom they live.  Unfortunately, without a will, it is unlikely that any of your estate will benefit your significant other, even if you live together.  Moreover, your significant other may lose important real or personal property, creating great hardship.  At a minimum a simple will can resolve some of these issues.

If you are single and have a child, you may be initially comforted by the fact that your estate benefits your child upon your passing.  What may concern you, however,  is that without an estate plan, you can't be sure who manages the estate you leave to your children.  Often, the determination of who manages your estate makes a difference in whether the assets are best managed for the benefit of your child.   

The next most important document is a durable power of attorney. A power of attorney allows a person you appoint -- your "attorney-in-fact" or "agent" -- to act in your place for financial purposes when and if you ever become incapacitated. In that case, the person you choose will be able to step in and take care of your financial affairs. Without a durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer.

In addition, you should have a health care proxy. Similar to a power of attorney, a health care proxy allows an individual to appoint someone else to act as their agent, but for medical, as opposed to financial, decisions. Unlike married individuals, unmarried partners or friends usually can't make decisions for each other without signed authorization.

If you are planning to give away a lot of your money, there are ways to do that efficiently through the annual gift tax exclusion and charitable remainder trusts. Other estate planning documents to consider are a revocable living trust and a living will.

Don't think that because you are single, you don't need an estate plan. Contact your elder law attorney to find out what estate planning documents you need.

Live Up to Your Commitment to the Nursing Home, or Beware

A recent Connecticut case highlights the risk to family members of nursing home residents who don't live up to their financial commitments to such facilities.

When her mother was admitted to the Cook Willow Health Center, Judy Andrien signed an admission agreement on behalf of her mother as "responsible relative," agreeing to take steps to ensure that the nursing home would be paid from her mother's assets or by Medicaid.

The facility sued Ms. Andrien, claiming that she did not live up to this commitment. Ms. Andrien asked the court to dismiss the case, arguing that she cannot be held liable because she did not agree to use her own funds to pay for her mother's care.  

The Superior Court of Connecticut has ruled in the facility's favor, stating that the claim is not that Ms. Andrien personally guaranteed payment, but that she is in breach of contract for not using her mother's funds to pay the nursing home or taking steps to get her mother Medicaid coverage. The court's ruling means that the case will continue to trial on the nursing home's claim, which it still must prove.

Nursing Homes Overcharge Medicare More than One Billion Dollars Annually

Hundreds of nursing homes overcharge Medicare every year for so-called skilled services, adding $1.5 billion in annual costs to the program, according to a federal report.  About one-fourth of Medicare bills from facilities examined in the report were incorrect. The majority of these claims involved  "upcoding," where a nursing home or other provider inflates the cost of its bill to Medicare by claiming more intensive services were done than actually performed.

 In other cases, nursing homes provided treatments that were inappropriate for the patient.  Documents show that facilities billed for high-intensity work, such as speech therapy and occupational therapy, that went to patients who couldn't benefit from it. One patient under hospice care refused physical therapy but was given the therapy anyway, and Medicare was billed, officials said.

The report was prepared by the The Office of Investigations (OI), which  conducts criminal, civil, and administrative investigations of fraud and misconduct related to Health and Human Service programs, operations, and beneficiaries.  OI utilizes its resources by actively coordinating with the Department of Justice and other Federal, State, and local law enforcement authorities.  The investigative efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties.

In recent years, the Office of Inspector General had identified a number of problems with billing by skilled nursing facilities (SNF), including the submission of inaccurate, medically unnecessary, and fraudulent claims.  Further, the Medicare Payment Advisory Commission has raised concerns about SNFs’ improperly billing for therapy to obtain additional Medicare payments.  In fiscal year (FY) 2012, Medicare paid $32.2 billion for SNF services.

The Report made a number of recommendations.  Recognizing that the Centers for Medicare & Medicaid Services (CMS) had recently made several significant changes to SNF payments, the Report stated that    "more needs to be done to reduce inappropriate payments to SNFs."  Accordingly,   it was suggested that   CMS:  (1) increase and expand reviews of SNF claims, (2) use its Fraud Prevention System to identify SNFs that  are billing for higher paying services, (3) monitor compliance with new therapy assessments, (4) change the current method for determining how much therapy is needed to ensure appropriate payments, (5) improve the accuracy of Minimum Data Set items, and (6) follow up on the SNFs that billed in error.  CMS concurred with all six recommendations.