Saturday, November 18, 2017

There's a Generation Z -- Who Knew?

     We all know about the Greatest Generation and the Silent Generation and the Baby Boom Generation. And then there's Generation X, the people who followed on the heels of the baby boomers.

     And of course we've all heard about the millennials -- ad nauseum -- who are also known as Generation Y. By and large, these are the children of the baby boomers, born in the 1980s and 1990s. This cohort is some 80 million strong, and believe it or not, they now outnumber the baby boomers.

     And we thought we were the biggest kids on the block!

     Just f.y.i., there were some 76 million births in the United States from 1946 to 1964, the baby boom era. Of those original 76 million, about 13 million have died. But there are some 11 million immigrants who are now in their 50s and 60s. So if you count these "replacements" there are still some 74 million people who make up baby boomers in the U. S.

     But now I've come to find out there's a new generation. Generation Z. Jeez, doesn't that make you feel old?!?

     Generation Z consists of people born in the late 1990s and early 2000s. The oldest Generation Zers are beginning to graduate from college. And according to some reports, they have their own distinct view of the world.

     Gen Z is the first generation that grew up with the Internet and smartphones. These kids only know about things like landlines and AOL through history books and movies. They also grew up in a time of economic and political uncertainty -- think recession of 2002 and the bigger one in 2008-9 -- and have watched their millennial predecessors struggle to find jobs and become financially independent. Gen Zers are well-versed in technology. The brass ring in terms of jobs hangs in Silicon Valley, or other technology hubs, or else in the technology divisions of major companies.

     They grew up with social media, and so they want to work in collaborative teams and learn from their peers. They are less likely than millennials to want to be entrepreneurs. They would rather work for a big company that offers benefits and flexible work hours.

     Many of Gen Zers studied abroad in college and so they are interested in traveling for work and even exploring opportunities to work in another country. They are also used to real-time responses, and so are pushing for more frequent feedback at work. The annual performance appraisal is giving way to regular, ongoing feedback programs.

      On the other side of the equation, a survey of corporate managers found they are worried that Generation Zers will be hard to communicate with and hard to train. Older managers fear that Gen Zers feel entitled, and lack a purposeful work ethic. And they believe this younger generation may have difficulty making personal connections and working with others .

     But I remember when we baby boomers were entering the workforce, back in the 1970s. People thought we were lazy. They thought we only liked to sit around with our friends and get high. They thought we had it easy. We'd never experiencing the Depression, or a World War, and we were supposedly handed everything on a silver platter by our post-war parents. We felt entitled to a good job and respect from our bosses, simply because we were young and thought we were so wonderful.

     So . . . have things changed all that much? Well, one thing has changed. It turns out that the millennials and Generation Z are not really official generations, after all. They are merely convenient constructs developed by demographers and marketers. In fact, the baby boomers are the only demographically significant "generation" officially recognized by the U. S. Census Bureau. The baby boomers changed the world, like no other generation.

     Besides, there's another issue. What comes after Z? They've run out of letters!

     B and I had a grandchild born earlier this year. What are they going to call him and his friends? How will they get categorized? Right now he's just a baby, no different from my kids when they were babies, probably not much different from us when we were babies. But what is he going to be like -- what's the world going to be like -- in 20 or 25 years when he enters the workforce?

Tuesday, November 14, 2017

Pick Your Favorites

     As I mentioned in my November 4 post, I'm taking a photography course at home. While I'm here in South Carolina, as part of the course, I'm putting together a portfolio about the beach in November. The idea is to show the beach in its more natural state, after all the crowds have gone home.

     Most of the photos feature shots of sand and water and jetties. But I want to include a few photos of town as well. After all, when you think of the beach, don't you also call up the image of the dive bar, or the souvenir shop, the ice-cream stand or the restaurant with fishnets hanging from the ceiling? Here's a photo of a restaurant, taken through the front window.

     Ultimately I'll probably include two or three town shots in my portfolio. So, if you would do me the favor, could you tell me in the comment section below, which of these rank as your favorites. Here we have a souvenir shop, looking in the front door.

     Or . . . maybe this photo of a display which I found along the side of a building.

     Or, of this dog trying to look cool . . .

     But like I said, it's the people who count the most. Here's a fisherman out on the pier.

     And a woman lying on the beach . . .

     Or, do you prefer the long shot of the couple on the beach?

     Then we have a bird's eye view.

     And a seagull who ... she looks cold, doesn't she?

     Finally, a more abstract look at a fence.

     That's all I have for now. Again, I'd value your opinion on which are your favorites, hoping that at least a couple of them are interesting enough to catch and hold your eye.

     When I get home, and after I present my portfolio to the class, I'll be sure to bring you the results -- meaning, what the teacher and my classmates said about them. Thanks again!

Friday, November 10, 2017

What's a Snowbird?

     B and I are spending the first three weeks of November in the Carolinas. We came here to enjoy the warmer weather, to be sure, but the main reason we drove down here is because we stopped to see my daughter, who lives in Raleigh, NC, and then we're visiting with B's son (and now a grandson!) who lives in Charleston, SC. (We don't stay with her son . . . no way. We rent our own place out at the beach.)

     We will go home for Thanksgiving and Christmas. Then I will depart for three weeks in Florida, before meeting up with B to spend the month of February back in Charleston.

     I invite B every year to go with me to Florida but she only went once . . . and won't go back. She doesn't like Florida. It might be interesting to interview her and do a post on all the things that are, in her mind, wrong with Florida.

     So anyway, we had this same schedule last year. It seems to be our developing pattern, now that B is retired. Three weeks in November, then for a month in February, with me taking a side trip to Florida. So . . . does that make us Snowbirds?

     I don't think so. The Carolinas are a place where many Northerners go to retire. But they're not visiting; they live here. It's a compromise. The winter can be chilly, but there's no snow like in the north. The summers are hot and muggy, but not as bad as Florida, and the brutal heat of summer doesn't last as long either.

     Not too many people come to the Carolinas just for the winter. The true Snowbirds go farther south, usually to Florida. From my experience you have to get south of Orlando before you can rely on a balmy January or February.

     Of course the West Coast has its own version of Snowbirds. They go from Oregon or Washington, usually to Arizona. If you live in California -- like the Carolinas -- you don't need to go anywhere else.

     But I don't think the Carolinas qualify us for Snowbird status. And three weeks in Florida is not enough time. Besides, doesn't Snowbird have a slightly negative connotation?

     Snowbirds are kind of a cliche. They are old and retired and wear funny-looking clothes. They are kind of selfish, only concerned with their own comfort level, people who abandon friends and family at the first sign of cold weather. They are, literally, fair-weather friends. Or maybe they're the much-hated one-percenters who can afford two homes and are gaming the tax system by claiming residence in a low-tax state, while they really continue to live and enjoy the amenities of the North.

     Okay, now I'm going too far. I don't mean to insult anybody. After all, my parents were full-fledged Snowbirds and they weren't one-percenters -- although they did wear funny-looking clothes. My dad favored a checked sport jacket, turquoise pants and he sometimes wore a hat and a tie that were at least 30 years old. (He never got a pair of white shoes, though . . . gotta give him that!)

     Besides, if I had my druthers, I'd probably be a Snowbird myself. Personally, I like Florida. I was even there once in the summer, watching July 4th fireworks, and I didn't find the heat and humidity all that oppressive. I already play golf, which seems to be a prerequisite for retiring to Florida (and Arizona too?). And according to B anyway, I already wear the funny-looking clothes. So, uh, I guess credit goes to B . . . for keeping me from becoming a cliche.

Monday, November 6, 2017

Which Do You Like Better?

     I am taking a photography course with an organization called the Center for Learning in Retirement, held at our local university in Pennsylvania. For our final project we have to put together a portfolio based on a certain theme.

     B and I just arrived at the beach in South Carolina. We'll be here for two weeks, seeing B's son and grandson, who live nearby in Charleston . . .  and, well, enjoying the sand and the surf and the little beach town and, hopefully, some warm weather.

     So I picked for my photography theme: November at the Beach.

     Ultimately, I have to put together a portfolio of about a dozen photos that encapsulate the feel of the beach at this time of year -- the Carolina beach after the season is over, after the crowds go home.

     So I'm asking for your help. I have a few photos here. Can you tell me in the comment section which of the two photos you like better? Or, please let me know if you don't like either of them -- be honest because I'll have to show these photos to my teacher and the rest of the class ... and, you know, I don't want to embarrass myself by presenting lousy photos. One problem with beach pictures is that they tend toward the cliche -- the setting sun, the breaking waves, the pretty flowers. Of course, a lot of what makes a good picture is not the subject matter, but how you look at it, the point of view.

     So anyway, if you'd do me the favor, please let me know which you like better . . .  Number 1:

No. 1

     Or Number 2:

No. 2

     I know, the photos are similar. But which captures the mood better? Or, again please be honest, are they both boring or too familiar?

     How about Number 3:

No. 3

     Or Number 4? They cover the same subject, but they are somewhat different, aren't they? Which one speaks to you better, No. 3 or No. 4?

No. 4

     How about this look at a beach road, with the shadows . . . You like Number 5 better:

No. 5

     Or this one, Number 6, which is a road of a different kind  . . .

No. 6

     And then I've got a closeup of a shell. Number 7 shows the shell through the water.

No. 7

     But does Number 8, with the shadow, seem better than No. 7 -- or are they both kinda boring?

No. 8

     And finally, which of these three do you like best . . . all playing with the late-in-the-day shadows. Number 9:

No. 9

     Or Number 10:

No. 10

     Or Number 11:

No. 11

     I appreciate your "votes" and thank you for your help. If you think this is fun, I'll show more photos later in the week. If it's not fun . . . well then, I'll just bug B with my photos. She's stuck here with me for two weeks and can't get away!

Saturday, November 4, 2017

New Tax Plan -- Fair or Not Fair

     If I had to bet, I would bet that the proposed Republican tax reform bill does not get passed, that it never actually makes it into law. However, I also know I am not very good at predicting the political future, so let me put in my two cents' worth about the tax reform proposal ... what it proposes, and whether it's fair or not. My information about the proposal comes from U.S. News, which I assume is accurate but not necessarily comprehensive.

     First of all I agree that the tax code ought to be simplified. Does this proposal accomplish that? Well, it reduces the tax brackets from seven to four; it raises the standard deduction so more people will be able to file without having to itemize deductions. Perhaps it's a small step in the right direction. But it FALLS SHORT in accomplishing a true simplification that would allow the majority of people to understand the code and do their own taxes.

     The most-advertised change is the lowering of the business tax from 35% to 20%. People will argue all day long about whether or not this is a good thing. Proponents say it will spur investment, jobs and income. Opponents argue that it will add to the federal deficit and that most of the benefits will go to the rich. The truth is, NOBODY KNOWS what the effects will be. So it's hard to say whether this is fair or not.

     The current seven tax brackets will be reduced to four, ranging from 12% to 39.6%. The highest rate has not been reduced. So ... FAIR.

     Certain deductions are capped. The mortgage deduction is currently capped at $1 million. In other words, mortgage interest is tax deductible up to the interest paid on a $1 million loan. The proposal calls for lowering the cap to $500,000. Despite howls of protest from the real-estate industry, this only seems FAIR to me. I think it's a good idea for the federal government to encourage home ownership, because it is generally considered a social good. But come on. There should be a reasonable limit on how much the rest of us subsidize people buying million-dollar-plus McMansions, don't you think?.

     The other cap is for state and local property tax. Currently, all real-estate tax is exempt from federal income tax. The proposal calls for a cap at $10,000. In effect, this increases taxes on people living in wealthy areas, who benefit from the extra services their $10,000-plus property taxes pay for. Again, I think we should subsidize local governments, particularly local school systems. But there's no reason why regular people should subsidize other people's $10,000-plus luxuries. So ... FAIR.

     The Republican tax plan would eliminate the tax credit for buying electric vehicles. FAIR, BUT NOT SMART. It would eliminate deductions for state and local income taxes, casualty losses, medical expenses (currently deductible at over 10% of income); alimony payments and moving expenses necessary for a job. To compensate the Republican bill would almost double the standard deduction from $12,700 to $24,000 for a married couple and from $6,350 to $12,000 for single filers. It would also increase the child deduction from $1000 to $1600, but eliminate the personal exemption. On balance this would benefit families and punish single people, but the effects would be minimal. So all this pretty much comes out in the wash, and simplifies the tax code. FAIR.

     The plan would also eliminate the alternative minimum tax -- originally designed to make sure the very highest-income individuals pay at least some tax, even if they pile on the deductions and other tax dodges available to those with high incomes and high-priced accountants. But the AMT has morphed into a complicated add-on that now affects not just the super-rich, but also significant numbers of upper-middle-income filers. FAIR.

     The plan would not eliminate the so-called carried interest clause, which offers select financial executives a huge tax break by classifying their income as capital gains instead of regular income, thus taxing it at a lower rate. Donald Trump railed against this tax break during the campaign -- as did Hillary Clinton and Bernie Sanders and virtually every other candidate. But despite the protests, this particular tax break for the favored few has not been eliminated. NOT FAIR.

     The plan would also phase out the inheritance tax (or the death tax, in Republican parlance). Currently, estates worth over $5.5 million are subject to estate tax. Under this plan no estate tax would be levied on even the wealthiest of the wealthy. NOT FAIR.

     One last thing. There was talk of putting more severe caps on the amounts people could put into their 401K accounts. This element was dropped. So workers will still be able to deposit up to $18,000 in a 401K account. Yet people who do not work for a big corporation, who do not have a 401K, and instead rely on an IRA, are limited to a $5,500 contribution (or $6,500 if you're over 50). In my opinion, everyone should have the same caps on their contributions. Everyone should be treated equally. So ... UNFAIR.

     As I said, I do not know if this is a comprehensive look at the new tax plan, but it covers the basics. Some good things; some bad things. But is it progress? The beat goes on.

Tuesday, October 31, 2017

Packing in a Lot of Food

     With all the Halloween talk about treats and candy, B and I last Sunday thought we could pitch in for a more serious effort to help feed the children. It's an initiative through B's church, which gathered together 424 volunteers at our local university to help pack food that will be sent to poor children in some 80 countries around the world.

     The sponsor of the event was an organization called Feed My Starving Children, which is a Christian non-profit that has been distributing food to poor people since 1987.

Hard at work
     So we gathered in an auditorium, listened to a hymn, heard a prayer, then got the instructions on what to do. B and I headed off to a table where we were packing meals called Manna Packs. Each individually packaged meal basically consists of rice, fortified with soy, dried vegetables and powdered vitamins.

     Each table involved a 15-man operation. Four people ladled in the ingredients; two people funneled them into  plastic bags, two more checked and weighed the ingredients, two more folded the bags, and then one person heat-sealed the bags. Then a crew of four people packed the bags into boxes.

     Other volunteers were bringing in the ingredients and the empty boxes to the tables. Then the filled boxes were picked up by more volunteers and hauled off to a loading dock, where still others were loading the boxes into trucks. Meanwhile, there were a few Feed My Starving Children staff members who set up the production line, coordinated our efforts, and provided instructions, advice and general support.

Not me ... but a proud volunteer
     We were just one three-hour "shift" in a four-day operation that was packing and sending some 1.2 million meals around the world. A few members of B's church had been to Haiti to view one of the receiving ends of the operation -- where the food actually made it into the hands of poor, starving children. It was heartening to see the effects. They had "before" pictures of obviously malnourished children, and "after" pictures of the same children, only a few months later, who had been given a steady diet of these fortified meals.

     Our group packed over 100,000 meals, which sounds like a lot. But actually, it's a drop in the bucket. This would provide a two-week supply. But there was more to come, since another group was following in after us for another shift of packing food.

     Honestly, I don't know where they get the food, or how they process it into the ingredients that we poured into the Manna Packs. But I can tell you, I came away with a better appreciation of the difficult and enormous logistical job it is to meet even some of the needs of crying and starving children around the world.

      And also, after spending most of a morning on a production line, sealing plastic bags, and then ladling soy granules into a funnel, it gives me a better appreciation of the difficulty of working on an assembly line. My wrist was killing me by the end of the day, and B had a sore back. But if it saved even a few lives, it was worth the effort.

Wednesday, October 25, 2017

Summer Leaves, Autumn Nights

     I don't know what's it's been like where you live. But where I now reside, in southeastern Pennsylvania, outside of Philadelphia, the weather is still warm -- 74 degrees today -- and because of the unusually warm September and October, the leaves have yet to turn in any significant way.

     My windows are open. The air is humid. And darned if I didn't get a little sunburn when we were lying out in the backyard yesterday afternoon.

     Still, the season is upon us. And no matter the weather, the ghosts and goblins and skeletons come out to play.

    What I didn't know, before we moved here, is that Halloween is taken quite seriously around these parts. We used to live in the Hudson valley of New York, where Washington Irving's headless horseman haunts the byways and highways.
     But something is spooking the Delaware valley as well, though I don't know what it is. Even a harmless lawn chair makes you wonder: Who was sitting there, where have they gone, what happened to them?

     To bolster our defenses against the encroaching darkness, B sent me out to buy a treasure chest full of candy. If our clean living is not clean enough, if our good deeds are not good enough, then we are prepared to bribe any and all specters and phantoms to entice them to go haunt other victims.

     I happen to know, from previous experience, that Skittles are a favorite of any beguiling young enchantress who might happen by the house one evening.

    And we now have sugar-coated ammunition to fend off the pirates who might wash up on our shores in the dark of night.

     So beware, don't let the benign summer weather, the pleasant breezes that linger into fall, lull you into thinking that all is right with the world. Be afraid of the darkness, my friends. Do not venture down that empty lane, for you know not what evil lurks on the other end.

Thursday, October 19, 2017

5 Questions to Ask Yourself After You Retire

Retirement is a destination, for sure, one that we have been working toward for decades. But retirement is also a journey. It begins when we leave work, and can easily last for 20 or 30 years. As with any journey, it sometimes makes sense to stop and review where we’ve been and where we’re going.

Here are five questions I can think of that are important to ask ourselves, when we first retire, then again on a regular basis throughout the rest of our lives. Maybe you have other questions that you think are important. But the point is, just because we're retired doesn't mean that life is over. It means we're living for ourselves rather than someone else, and we should examine our situation every once in a while . . . so we stay true to ourselves.

1. Am I on track? You probably had a vision -- or at least some dreams – of what retirement would look like long before you accepted your Apple watch. You might even have had some concrete plans – and maybe even a budget by the time you actually left work. Now we should ask ourselves:: How am I doing?

Think about your lifestyle. Are you retired to Arizona, like you planned? Or are you still living in your family home, cutting the grass, shoveling snow, and storing old textbooks for your kids? If you haven’t launched your retirement life, what’s stopping you? Is it an emotional issue, or a financial problem? If you haven’t made a plan, or have deferred a lot of decisions, now is the time to take control and get on with your life. 

2. What has changed? Retirement involves a transition from working and saving to relaxing and spending, from answering to others to answering to ourselves. But the way we begin our retirement may not involve the same lifestyle that we settle into a few years down the line.

In my own case, the early retirement years looked similar to my working years, since my partner hadn't yet retired and we were living in the same house, with the same friends. Now we've relocated to Pennsylvania. We're finding new activities, new friends, and trying to figure out how to spend the winter in a warmer clime. Eventually we'll settle down – and we can then re-evaluate our expectations after we’ve tried out our new lifestyle for a while and have a better sense of what the future holds.

3. What do we want to change? We might get a few surprises when we compare the vision we had for retirement with the reality of our current life. So is there anything about your new lifestyle that hasn’t measured up to expectations? Maybe you’ve checked off a few items on your bucket list, and now you’re ready for more. Or maybe some of your original items no longer seem interesting.

Change doesn’t stop just because we’re retired. Some people relocate to Florida only to find they can’t stand the heat, and they move back home – or halfway back to the Carolinas. However far you’ve come in your retirement voyage, stop and consider if you still want to continue in the same direction, or if it’s time for a course correction. 

Don't let the retirement train leave without you
4. Are any surprises in store? When you set your retirement budget, you presumably projected the everyday expenses that will likely not vary much from month to month or even year to year. Then you took into account some discretionary items – a new car or a trip to Hawaii -- and developed a plan to balance your financial resources with your spending expectations.

But sometimes we get a surprise. If you’ve received an inheritance, you might make more ambitious plans. If you faced an unexpected medical bill  or major home project, you might have to make some cuts in your discretionary expenses. The recent surprise in my life? My daughter got married. Yeah, I know, I should have figured she would get married eventually. But who knew they would be sending me the bills . . . and that it would cost so much?!? Anyway, if you haven’t yet been hit with one of life’s surprises, look ahead to see if any unexpected events could be on the horizon.

5. We should have a plan … and be willing to change. It’s prudent to plan ahead. But it’s also important to remain flexible, especially from a financial point of view. We make a plan based on everything we know, plus some reasonable projections. But every once in a while we have to stick our heads out the window to see if the weather is changing – and make adjustments as needed. If you’re overspending, for example, you might consider cutting back on discretionary items or taking a part-time job to fill the gap.

          More importantly, if you realize that you're not doing what you want to do in retirement, that your retirement has gone off the rails, there's no reason in the world why you can't get back on track Sometimes retirement doesn’t play out exactly the way we envisioned when we were younger. There may be periods of uncertainty. But if we’re flexible, and periodically review our situation, then we will most likely find a clear road ahead.

Sunday, October 15, 2017

New Ideas for Old Problems

     I have been AWOL from blogging for the last couple of weeks. My time has been consumed first by a short-term job that I agreed to do, and then by my daughter's wedding which took place in Brooklyn, NY, last weekend.

     I realize that the typical blogger would post lots of wedding photos when their daughter got married. But I must confess, I am a rather private person. Now that may seem odd coming from someone who's been blathering on about this and that for the last -- gosh, it's been seven years now! But, actually, for the most part I try to keep my family out of it. After all, they have nothing to do with retirement, and they are vaguely embarrassed by their dad and all his Baby Boomer friends.

     (My daughter, walking around hipster Brooklyn, getting ready for her hipster wedding ceremony, finally admitted to me: "Well, Dad, I guess I am a Millennial after all." But she still won't admit that she's a hipster.)

Street scene from the 2nd best place to retire

     Anyhooo . . . this week it's time for me to file a report from the group of bloggers called the BBB, or the Best of Boomer Bloggers. And if we're not the best, we are at least a representative sample. So here goes:

     Kathy Gottberg produces a blog called Smart Living 365. So it should be no surprise to find out that she's smarter than I am. She's been on vacation, but instead of ignoring her blog as I have, she signed up guest blogger Lynne Spreen of Any Shiny Thing. Spreen has posted an article Your Big Empty-Next House Could Be the Solution to 3 Problems which connects grandparents to a new trend in housing -- and offers an idea for retirees who might want to find more use for their too-big empty nest.

First buss at a hipster bar in Brooklyn

     Meryl Baer of  Six Decades and Counting has also been on vacation. She spent time in her old hometown, where she lived for 30 years while working and raising a family. Then she moved away, only to discover that in her absence the area has become a top retirement destination. Read about her short visit -- and what city is ranked by U. S. News as the 2nd best place to retire -- in Stopover at the Old Hometown.

     Meantime, if Meryl Baer has a knack for leaving town at just the wrong time, apparently Laura Lee Carter became an author at just the wrong time . . . and perhaps many of us will feel her pain. According to Carter in Amazon Says: Save Money, Don't Pay Authors, Amazon has betrayed authors by allowing third-party sellers to deceive customers into buying "new" books that do not come from the publishers, thus cutting authors off from their royalties. But, as Carter admits, all is not lost, for we do not really write for money or fame; we write to learn about ourselves and to make connections with others.

Rita is safe from the sun
     On Heart, Mind, Soul Carol Cassara reports on how a group of women found a more positive way to use Amazon. As we all know, technology and social media can be full of discord and disharmony, but Cassara knows that it can also bring out the best in people. Check out her post Generosity Revolution to see why it's important to look beyond our own limited experiences and reach out to other people in need.

     On the Survive and Thrive Boomer Guide, Rita R. Robison has discovered another benefit to our new technology. She points out that even with something as simple as an oil change, a Smartphone Can Be a Great Help, allowing consumers to compare prices and get the best deal. Then she finds out she needs to Wear Sunglasses and a Wide-brimmed Hat -- and we should too, not just in the summer but all year long, to protect our eyes as well as our skin.

    And finally, a new member of our group, Rebecca Forstadt-Olkowski of Baby Boomster, this week offers an overview of a conference called The New Old Age, hosted by The Atlantic magazine. The conference gathered together a distinguished group of experts who explored the way age is marketed in the media and offered a variety of ways we can change our vocabulary to bring a more positive perception of aging.

    So hats off to Rebecca for a fine wrap-up . . . er, figuratively speaking, since we're all keeping our wide-brimmed hats firmly in place. Have a good week!

Sunday, September 24, 2017

FAQs on Long-Term Care

     Realistically speaking, most of us will need some kind of personal care at one time or another. I posted an article on the subject, Is Long-Term Care Insurance for You? that covered many of the basics, brought to us by Jeremy A. Kisner, a financial expert at Surevest Wealth Management in Phoenix, Ariz.

     Kisner is a Certified Financial Planner and Chartered Life Underwriter, with a degree in economics from UC Santa Barbara. He also writes an informative Retirement Blog that covers various aspects of personal finance and retirement issues.

     As Kisner reports, not much has changed on the issue of long-term care. But there are always more details, more questions. So here are the Frequently Asked Questions he sees regarding long-term care:

Q: What is long-term care?

A: Long-term care is both medical and non-medical assistance that hopefully you will never need. However, as you age, at some point you may need help performing the activities of daily living such as bathing, dressing, eating, toileting, transferring. Long-term care is not designed to cure or rehabilitate you. It is just to help you do the things you need to do each day.

Q: What is the probability that I will need long-term care?

A: Approximately 68% of 65-year olds will require some long-term care during their lives. The statistics vary depending on the source, but a rigorous study of the incidence of long-term care, which was cited in Forbes, projected that 58% of men and 79% of women who are currently 65 or older will need LTC services at some point in their lives.

Q: How long do people typically require long-term care services such as home healthcare, assisted living, or nursing home?

A: Some LTC events are brief. Half of them last one year or less. The other half have an average duration of 3.9 years. Many times, the services can be provided by family members. Other times, the need for care is beyond the scope of what friends and family can do for you.

Q: How much does long-term care (e.g., home healthcare, assisted living, or nursing homes) cost?

A: The cost depends on the type of care and where you live. The least expensive type of care is non-medical home care (e.g., bathing, eating, etc.). The national median cost for non-medical home care is around $20 per hour or about $46,432 annually if you need this help 8½ hours a day, 5 days a week. The other end of the cost spectrum is a private room in a nursing home (AKA: skilled nursing facility). The median cost for a private room in a nursing home is $253 per day or $92,378 annually. Look up Long-Term Care Costs in Your State. These costs are typically not included when most people plan budget for healthcare costs in retirement.

Q: Who pays for long-term care services?

A: There are basically three funding options:
  1. Self-fund using your income, savings, and/or liquidating assets to pay for care,
  2. Buy private insurance
  3. Qualify for Medicaid. Medicaid is a welfare program that is only available after you have spent down your assets and do not have enough income to pay for care. There may also be free or subsidized long-term care coverage for veterans through the VA.

Q: What does long-term care insurance cover?

A: Once upon a time, LTC was thought of as nursing home insurance. Most policies today cover home healthcare, assisted living, memory care communities, and skilled nursing facilities. Some policies also cover hospice care. Most long-term care services required are non-medical and provided in the person’s home.

Q: How do I find the right LTC facility for my loved one?

A: Step 1: Ask friends and family whether they have any suggested facilities.

Step 2: You can use these two tools: the Eldercare locator from the Department of Health and Human Services, and /or Medicare’s online nursing home comparison tool. Medicare’s comparison tool can help you evaluate nursing homes based on quality to see whether there are any blips in health and safety inspections. It also offers insight into how people rate a facility’s staff.

Step 3: There is no substitute for boots on the ground (AKA: the good old-fashioned site visit). While you are there, do not hesitate to ask residents and their families how they like the facility and staff.

Q: Do you recommend LTC insurance?
A: Everyone should have some plan to pay for LTC if the need arises. This is most important for married couples so that one spouse does not use up all the assets and then leave the other spouse destitute. The plan to self-insure (i.e., pay out of pocket) may be appropriate for mid to high net-worth households (typically over $2 million). Another option is to depend on Medicaid, which is not a great plan unless you do not have a lot of assets to protect. Medicaid is a welfare program that is only available after you have spent almost all your assets. The third solution is to buy insurance so you don’t have to spend down your hard-earned savings. The prime target for LTC insurance solutions are couples with $200k - $2 million in investible assets.

Q: Can the insurance company increase my long-term care insurance premiums?
A: It depends on the type of policy. Traditional LTC insurance (pool of funds) are “guaranteed renewable,” which means the insurance company may increase premiums, but only on an entire class of policies, not on an individual policy. This used to be rare, but now almost every company has raised rates on in-force business. Hybrid products are classified as “non-cancellable,” which means that the insurance company cannot change the rates.

Q: What are “hybrid LTC products”?

A: The insurance solutions include: traditional LTC insurance, as well as hybrid insurance products. The hybrids include life insurance policies that allow the death benefit to be used to pay for LTC or an annuity with a rider that increases your payments during a qualifying LTC event. There are a couple of obvious advantages to the hybrids. Specifically, the death benefit on the life insurance or account value of the annuity is paid to your beneficiary if you do not use the funds for LTC while you are alive. This is a big difference from traditional LTC insurance, which does not have a cash value or death benefit.

These products become more attractive at older ages for two reasons:
  1.  Inflation protection associated with traditional LTC insurance becomes less important when purchased at older ages.
  2.  Underwriting guidelines are more lenient on the hybrid products than on traditional LTC insurance. The one downside of hybrids is a large single premium is usually required to fund these products.

Q: How do I qualify for Medicaid?
A: You must spend all your non-exempt assets, which includes investment accounts, savings accounts, retirement accounts, and the cash value of any life insurance—down to $2,000 if you are single before Medicaid kicks in. If you’re married, there are spousal impoverish standards that allow the healthy (community) spouse to keep assets up to the “community spouse resource allowance,” which is set by your state—ranging from $24,180 to $120,900 and monthly income “minimum monthly maintenance needs allowance” of $2,030 - $3,022 (as of 2017).

Exempt assets are not counted and include your wedding ring, one car, and your house. However, there are limits on home equity ($560 - $840k) depending on your state, and many states will put a lien on the house to collect retroactively after both spouses have passed or sold the house.

Q: What is the best age to purchase long-term care insurance?

A: The average purchaser of LTC insurance is 57 years old. Naturally, all insurance solutions (traditional LTC insurance, hybrid life insurance and annuities) have a lower annual expense when purchased at younger ages.

Q: Is it difficult to qualify for long-term care insurance?
A: Yes. If you have a hang nail, you will not qualify. Okay, that’s a slight exaggeration, but it has gotten significantly more difficult to quality for traditional LTC Insurance. The insurance company bases its underwriting on your medical history, family health history, current health status, and lifestyle. When you apply, you must be mentally fit and able to perform all activities of daily living, which are defined as bathing, dressing, eating, toileting, continence, and transferring. Life insurance with a LTC rider is easier to qualify for, and annuities with LTC riders are the easiest. In fact, most of the annuity solutions do not have any medical underwriting. Sadly, they also provide the least effective LTC coverage.

Q: What do these LTC insurance terms mean: elimination period, benefit period, and pool of funds?
A: Traditional long-term care works like most types of insurance. There is a deductible, which is known as the “elimination period.” This is the time -- typically 90 days -- when you must pay out of pocket before the insurance kicks in. Once insurance starts, you have a daily or monthly maximum the insurance will cover. For example, you would be required to pay the $50 out of pocket if your cost of care is $250 but your daily max is only $200.

There is also a “benefit period,” which is the number of years the insurance will cover you if your cost of care is equal to or greater than your daily maximum. You can figure out your total “pool of funds” by multiplying your daily maximum x 365 days x the number of years. For example, if your daily max is $200 and your benefit period is 3 years, you would have a pool of $200 x 365 days x 3 years = $219,000. Your benefits would last longer if your care costs less than your daily max. For example, your pool of funds would last 6 years if your care was only $100 a day, even though the stated benefit period was 3 years because you would still have money left in your “pool.” These policies have a host of riders that enable you to customize coverage. This is why it really helps to work with an agent who is well-versed in LTC.

Q: Are LTC Insurance premiums tax-deductible?

A: Premiums for “qualified” long-term care insurance policies are treated like any other medical expense for tax purposes. You only get a deduction for the amount of total unreimbursed medical expenses (including Medicare premiums) that exceed 10% of your Adjusted Gross Income (AGI). A policy is “qualified” if it was issued after January 1, 1997 and meets certain requirements.

Q: Are LTC benefits taxable?

A: Benefits are tax-free as long as they are less than $360 a day or the cost of care, whichever is greater.

Q: What is the LTC Partnership Program?
A: The Long-Term Care Partnership Program is a Federally-supported initiative that allows individuals who purchase a qualified long-term care insurance policy to protect a portion of their assets from Medicaid spend down.

For example, if you purchase a qualified LTC policy and subsequently collect $300k in benefits, you (or your spouse) would be able to qualify for Medicaid while keeping $300k of additional countable assets. Here's a list of states that participate in the Partnership program.