Retirement Living News

March 2007

HEADLINES  (Click on headline to read story)

• Communities Struggle To Accommodate 'Boomerang' Effect 
  of Retirees With Health Problems
• Arkansas, Louisiana and Texas Beginning to "Certify" Cities as Retirement Destinations
• SEC Warns of Bogus Senior Investment Specialists Targeting Boomers
• Minnesota Study Finds Baby Boomers Seek Innovations on Retirement-Related Products and Services
• Bush Proposes to Eliminate States' Right to Increase 
  Medicaid Home Equity Limit
• Major Increase Forecast for Medicare Part B Premiums next Year
• New Book: Moving in The Right Direction

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Communities Struggle To Accommodate 'Boomerang' Effect of 
Retirees With Health Problems 

Seniors from the Northeast and Midwest who flocked to Florida and other Sun Belt states in early retirement are now returning home because they are "lonely, in failing health or want to be near family." Last month USA Today ran a front page story about "boomerang retirees" and the efforts by communities to accommodate aging seniors returning home. Such retirees are "challenging communities that already are grappling with the needs of an aging population." The number of such retirees will likely increase as the 79 million baby boomers age and their longevity increases, says another USA Today story.

"People relocate in their 60s when they're in good health and often move to active adult communities," says Sandy Markwood, CEO of the National Association of Area Agencies on Aging. "When they face either a dramatic illness or the death of a spouse, all of a sudden these active adult communities are away from the support system they have and they're not as attractive as they once were." They usually return to the place they came from, especially if their children live there, she says. 

Markwood also says that a study conducted in 2006 found that more than "half of the communities in the country had not begun to plan for the aging of their existing population, much less contemplate a boomerang population coming back in their community." As a result, a number of private companies are "sprouting to fill the void in public services for the aging," These reverse moves aren't made for warm weather and entertainment, says Charles Longino, director of the gerontology program at Wake Forest University. He has studied the movement of seniors over two decades and refers to this group as "assistance migrants." 

His research focuses on moves by the elderly to and from Florida - the state that annually attracts the largest number of retirees - and New York, New Jersey, Pennsylvania and Ohio. He uses the 2000 Census data which has information on the migration of people over age 60.
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Arkansas, Louisiana and Texas Beginning to "Certify" Cities 
as Retirement Destinations

A number of states are beginning to help communities market themselves as good retirement destinations, much like Mississippi did in 1994. That state now has 21 "certified retirement communities." 

The Texas Agriculture Department, which is running the Texas program, began taking applications from cities last June. The effort is part of a new marketing program aimed at attracting retirees to the state. Cities pay 25 cents per resident to apply, or $5,000 if the city is under 20,000 people. It recently announced the first three cities to be certified - Athens, Lufkin and Nacogdoches County - which are three of East Texas' most populous areas. Among the criteria used in the evaluation process are housing availability, medical services, education, leisure living, festivals and events, and sports. 

Arkansas Rep. Steve Harrelson, D-Texarkana, recently filed legislation creating the Arkansas Retirement Community Program to enhance the state's focus on attracting retirees. He said the proposed legislation closely mirrors the state program in Texas. A 2005 study conducted for the Texarkana Chamber of Commerce pointed to that city as being a prime retirement destination. Harrelson said the state's program would be run by the Department of Economic Development. 

In Louisiana the New Iberia City Council is taking the first step to become one of Louisiana's certified retirement communities. Only six cities in the state will earn the title, which comes with a  $10,000 grant to support the program. In April the state will review applications, and in May will announce the winners. For more information, click here
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SEC Warns of Bogus Senior Investment Specialists Targeting Boomers

The invitation to attend an investment seminar or workshop might come by telephone or mail. You'll be invited to attend a meeting that may include a free meal. The pitch will come from a so-called senior specialist who claims expertise in investments for those over age 55. 

During the seminar, the specialist will review your portfolio and typically recommend that you liquidate stocks and invest instead in variable or equity-indexed annuities. Both investments are high-commission vehicles with long holding periods and gigantic early-withdrawal penalties, making them inappropriate for seniors. 

The Securities and Exchange Commission warns that agents with the designation "senior specialist," "retirement counselor," or "senior counselor" might not have completed much training and might not be registered to sell investments or insurance. Before handing money over to them, read the SEC brochure "Check Out Brokers and Investment Advisers," at www.sec.gov/investor/brokers.htm. You'll find some questions that you should ask about investment products, the people who sell those products, and the people who provide investment advice to you. It also includes some tips on how to monitor your investments and handle any problems
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Minnesota Study Finds Baby Boomers Seek Innovations on Retirement-Related Products and Services

Ecumen, Minnesota's largest non-profit senior housing company, released last month their Age Wave Study, the largest ever conducted of Minnesota baby boomers and their views on longevity, images of aging, technology, independence, housing and more. 

Among the multitude of findings the study says Minnesota baby boomers (age 42-60) want more public policy, personal finance and technological options to help them maintain independence and stay in their own home even if it means raising their taxes. 

The Ecumen Age Wave study, conducted by Decision Resources Inc. for Ecumen, notes that 0 percent of baby boomers said they want to live in a nursing home -- even if they or a spouse have a debilitating illness. The vast majority, 89%, want to live at home, and nine out of 10 anticipate that technology will help them live longer and more independently. Over half of baby boomers said they'll pay $100 per month for digital health technology and five percent said they'll spend $500 per month. Nearly nine out of 10 (87%) support state funding for a research center to develop digital health technology that will help people stay independent. 

"The age wave demands innovation across the board, including public policy, financial products, personal technology, housing, community design, and delivery of care," said Kathryn Roberts, a baby boomer and CEO and President of Ecumen. "Baby boomers are telling us that they want more flexible options that provide value by helping them maintain their independence. We must revolutionize and reinvent how we approach aging. Aging isn't partisan. Nor does it discriminate. We're all growing older. And we're in this together." 

Nearly 85 percent say they would support a proposal that includes an increased tax credit for long term care (LTC) insurance, the Vermont Model (detailed below), access to the state employees' LTC plan, tax credits for technology purchases that help people stay independent, and a state web site that helps citizens sort through LTC insurance options. 

Baby boomers, most of whom expect to live beyond 80 (59%), and find long-term care insurance difficult to understand (54%), support a variety of options for paying for care if they need it, including: 

• Vermont Model (89% support): Allows a person to use Medicaid dollars to pay a relative or friend to provide care in one's own home. (Program is currently being piloted in Vermont.) 
• Payroll Tax (86% support): A payroll tax of up to $12 per month to pay for a year of guaranteed care if needed. 
•  Health Insurance (85% support): Would make LTC insurance part of health insurance. Others would like it part of life insurance (76%) or disability insurance (72%). 
• State Employees Plan (85% support): Would allow access for everyone to purchase long-term care insurance (LTC) from the state employees' plan. More than half (53%) support this option even if it required a tax increase. 
• Lifecare Annuity (80% support): In return for a single payment, a person would receive a consistent stream of income to pay for care costs if needed. 
• Tax-Free Savings (80% support): Similar to health savings accounts, a person could save up to $5,000 for care costs. 
• Long-Term Care Partnership (70%): A Minnesota plan where a person could preserve a portion of assets even if they qualify for Medicaid by purchasing a state-approved LTC insurance plan. 

Ecumen (www.ecumen.org) is Minnesota's largest non-profit senior housing company. The name Ecumen comes from the Greek word for home: "Oikos." Ecumen seeks to create "home" for older adults wherever they choose to live. The company is affiliated with the Evangelical Lutheran Church in America (ELCA). 

To read the full report, click here. 
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Bush Proposes to Eliminate States' Right to Increase 
Medicaid Home Equity Limit

The Deficit Reduction Act, enacted last year, bars Medicaid coverage of long-term care services to anyone with a home valued at more than $500,000, but gives states the option to increase that limit to $750,000. Included in the billions of  Medicare and Medicaid cuts called for in President Bush's 2008 budget proposal is a provision that would set the home equity limit at $500,000 and do away with the states' option to increase it. 

The Deficit Reduction Act of 2005 (DRA) amended a federal law making individuals with home equity exceeding $500,000 ineligible for Medicaid. The limit does not apply to applicants who have a spouse or a minor or disabled child living in the home. However, the DRA allowed states to increase that limit to $750,000 at their discretion, and several states, including New York and Maine, have so far chosen the upper limit. Bush's 2008 budget proposal seeks to remove the states' right to increase the home equity limit and proposes that the limit be fixed at $500,000 nationwide. 

To see an overview of the President's proposed Fiscal Year 2008 budget for the Department of Health and Human Services, click here. 
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Major Increase Forecast for Medicare Part B Premiums Next Year

Medicare Part B premiums are forecast to increase by $15.90 in 2008, the largest single-year hike in the history of the program, according to a new analysis by TREA Senior Citizens League (TSCL). The 17 percent increase would bring the premium to $109.40, up from $93.50 in 2007. Medicare Part B pays for doctors' visits, tests, and outpatient hospital care. 

The large Medicare premium increase could mean that many seniors will see no increase in their Social Security checks. The Congressional Budget Office (CBO) estimates that seniors will receive just a 1.5 percent Social Security Cost of Living Adjustment (COLA) in 2008. For the person with an average monthly Social Security benefit of $1,044, that would result in a $15.70 monthly increase-less than the increase in Medicare premiums. Almost all beneficiaries have their Medicare Part B premiums automatically deducted from their Social Security checks. 

The reason for the forecasted increase is the growing deficit in the Medicare program. In 2006, Medicare's Trustees announced that closing the deficit would require an 11 percent increase in Part B premiums for 2007, but the Bush administration, which sets the final rate for Medicare premiums, opted instead for a lower 5.6 percent increase. 

Over the past five years, Medicare Part B premiums have skyrocketed 60 percent, while the COLA has increased just 14 percent. If these new projections for 2008 prove correct, it will mean Medicare Part B premiums will have soared 77 percent in six years, while the COLA, intended to help seniors offset the effects of inflation, will have increased just 15 percent. 

TSCL also reports that the Medicare Trustees will likely announce their early estimates for 2008 Medicare Part B premiums at the end of this month. "Their estimates may be lower (i.e. more optimistic) than ours. Due to current law, their estimates are required to assume that Congress will cut physician reimbursements by 10 percent. Since that will almost certainly not happen, the estimates provided by the Trustees will likely be lower than the final figure, which will be released later in the year - and will likely be closer to our forecast." 

TREA Senior Citizens League, with 1.2 million members, is one of the nation's largest nonpartisan senior groups. Visit http://www.tscl.org for more information. 
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New Book: Moving in The Right Direction

If you have retired and are planning to move, the idea of selling your home probably seems overwhelming. You are not alone! A great number of seniors put off making arrangements to downsize even when their home no longer fits their needs or has become a burden to maintain. 

Bruce Nemovitz, a Senior Real Estate Specialist and Certified Senior Advisor, has written a straight-forward, helpful guide that provides a step-by-step plan to overcome the fear of change seniors sense. He also explores which housing options might best suit them. In his book, Moving in The Right Direction, Nemovitz draws on his 30 years of experience as a real estate professional to provide a compassionate guide for those struggling to make the life-changing decisions needed to secure their future. 

Most people enjoy the privacy that comes with owning their home, but the upkeep for some is a hardship, or declining health means it is no longer a safe a wise choice. This 78-page book shows seniors how to be proactive and not wait until an unexpected hardship, such as illness or financial setback, forces a move. 

The book can be purchased on Amazon.com by clicking here 
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