Who Should Make Financial Decisions for You?

Who should you trust to manage your financial well being when you are no longer able to do so? A power of attorney (POA), otherwise known as an agent to your principal, has the legal authority to represent and make decisions on your behalf. What characteristics should you look for when designating a power of attorney? No matter what type of power of attorney you seek to arrange, your potential agent must be a person you deem to be trustworthy and honorable to conduct your affairs in your best interest. 

Often the principal who designates the POA may prefer to choose a family member such as a spouse or adult child. If a family member is unable or unwilling to act when needed you can name a trusted friend or retain professional representation to ensure your interests are well looked after.  Some people choose to have co-agents or name a secondary agent in the event another might pre-decease you. 

Stipulations regarding the selection of a POA are minimal. Your chosen power of attorney must meet two legal thresholds; be an adult and not be incapacitated.  There are no special qualifications regarding financial acumen or legal knowledge, and in fact, integrity is considered the most important attribute when selecting your agent. 

Some questions to consider beyond your basic level of trust with this person(s) include:

• How does this person manage their own legal and financial responsibilities? Are they financially responsible? Do they lead a steady life? Are they good at making decisions under pressure?
• Will the person you select charge you a fee for their service? Generally, family members will not but, if you choose professional representation such as a financial planner or an attorney, there is usually a fee associated with their expertise and service.
• Is the person you want to represent you willing to do so? Becoming an agent is a big responsibility to accept, and for many reasons, the person you want may not agree to serve as your agent.
• Your power of attorney agent can have broad or limited legal authority to make decisions and transactions on your behalf about your property, finances, and medical care. The agent’s power is derived through your permissions, and if you are dissatisfied with your agent, you can terminate the POA/agent relationship and create a new one. Your power of attorney must comply with state law. When you work with us, we will make sure yours complies with all applicable laws. 

There are a few misconceptions about the power of attorney. The first is you can create a POA on your behalf after you are incapacitated. You cannot as it is too late. For your power of attorney to be valid, your agent must be appointed before you become incapacitated through illness or disability. If you do not have your POA agent legally in place and are unable to manage your affairs, it may become necessary for a court to appoint someone to act on your behalf. People appointed to represent your interests in this manner are referred to as guardians, conservators, or committees, depending on your local state law. To avoid someone making decisions for you who you may not have chosen, it is imperative to have the proper power of attorney legally in place before you become incapacitated. 

Another misconception is that your POA agent can make whatever financial decision they want to about your estate and that all power of attorney documents are the same. Your selected agent, by law, has an overriding obligation known as a fiduciary obligation to make decisions in your best interests. This responsibility is why it is imperative to choose a trustworthy agent as it can help avoid challenges to and litigation of your estate. You must have full confidence in the actions your agent will take on your behalf. You can appoint different agents for different POA document functions. We can help you figure out which powers should be given to particular agents. For example, you may want a different agent to handle real estate transactions on your behalf. 

Selecting an agent and preparing a financial power of attorney is an important part of your overall plan. We would be happy to help you and welcome your call at 1.800.660.7564 or you can simply email us at info@covertlaw.com.

Gray Divorce is Destroying the Lives of Older Americans

Americans aged 50 or more are experiencing gray divorce more than ever. The term gray divorce generally refers to the baby boomer generation and affects all classes and education levels. Research shows that splitting during middle age is particularly damaging to your financial well being. According to Bloomberg News, the US divorce rate for couples past the age of 50 has doubled since 1990 and occurs most often in people who have married and divorced more than once. The rate of divorce among remarried individuals is 2.5 times higher than those in first marriages. And the financial outlook is usually the bleakest for those who have married and divorced more than once. Losing accumulated wealth for a second or third time can ruin personal finances on an unprecedented scale.

As such, relative wealth can be a protective factor in keeping couples together. Midlife marriages are not always torn apart by empty nest syndrome or a late mid-life crisis. Often, divorcing couples are already experiencing financial problems due to unemployment or job insecurity. These couples may not have the resources to enter into marriage counseling and may not see the point in fighting to remain in an unsuccessful economic partnership. Married couples with more to lose in divorce will often keep a less than perfect marriage viable to protect a lifestyle they are unwilling to forfeit. These couples will often live separate lives but maintain the economic structure within the marriage.

Susan Brown, who is co-director of the National Center for Family & Marriage Research, explains that if you are getting a divorce after the age of 50, expect your wealth to decrease by 50 percent. Brown goes on to state that the depression rate for those experiencing gray divorce is higher than the levels of those who have experienced the death of a spouse. If you are a woman and going through a gray divorce, expect your standard of living to plunge by 45 percent compared to a man’s 21 percent. One of the biggest financial tragedies of gray divorce is there is no appreciable window of time to recover the wealth you lost. The event horizon of your life is shrinking, and there is no time to undo the financial destruction. Even qualified career individuals will find ageism is rife within the corporate hiring sector. The prospects for landing a great new job or winning a lottery are very bleak. Statistics show you will be most unlikely to recoup your previous standard of living. This fact is particularly true in the case of women aged 63 or more who, in part, are experiencing poverty rates of 27 percent because of gray divorce. The Journal of Gerontology projects that by the year 2030, more than 828,000 Americans will be divorcing each year even if the gray divorce rate stays the same.

What to do if you become a gray divorce statistic then? One of the best ways to recover is to re-partner. Many older people are looking to re-couple and the digital age is providing more ways to meet than ever before. Online dating sites for older Americans are popular as are the more traditional senior community centers to make connections to like-aged people. If you choose to remain un-partnered however, you can expect to take about four years to end the depression cycle of gray divorce. However, remarrying or re-partnering will end the depression almost immediately with the stipulation you have chosen your partner wisely. Generally, re-partnering is more successful if you are a man since they tend to look for a partner who is significantly younger than themselves. As women live longer than men and because men do tend to seek younger women, older women are left with a vastly smaller pool of potential partners. 

Protect your well being and financial interests from gray divorce. Your best hope is to stay successfully married and continue on the path of building wealth and enjoying retirement years. If you find yourself going through a gray divorce, be sure to seek trusted legal counsel who can best advise you on how to protect your assets and future retirement years. Whether you are on your first, second, or third marriage take a look at how best to protect your financial picture in the event gray divorce happens to you. Contact our office today and schedule an appointment to discuss how we can help you with your planning.  Call us at 1.800.660.7564 or email us at info@covertlaw.com.

The Truth About Social Security Myths

According to NerdWallet, more than half of Americans apply for social security before reaching their full retirement age, and more than 30 percent of those apply for benefits at 62 years of age. Americans file early for benefits even though researchers claim it would be better to wait to claim their social security benefits. It DOES matter when you opt-in to take your social security benefit. Between the age of 62 and full retirement, your benefits increase by about 7 percent each year and additionally 8 percent each year between your full retirement age and 70. These percentages reflect an actuary adjustment to ensure those Americans who opt for a larger check for shorter periods do not receive less than those receiving smaller checks for more extended periods.

Currently, full retirement age is 66 for those born before 1960 and 67 for those born after that. Social security benefits will max out at age 70 and by waiting that long your checks could be 24 to 32 percent more than what you would receive at full retirement age and a whopping 76 percent larger than what you would receive at 62. However, statistics show that only about 1 in 25 applicants will wait to collect benefits at the age of 70 when monthly benefits hit their peak. Economic hardship for some seniors clearly defines part of the trend in early benefit assumption, but what of those who have retirement planning in place?

Currently, low-interest rates and survivor benefit rules coupled with longer life expectancies generally mean most retirees would benefit by delaying their benefits as long as possible. Those destined to become super-seniors, living well into their 90s and 100s, can quickly run out of savings and may end up depending entirely on their social security benefits check. Having delayed taking social security provides maximum benefits for these super-seniors. Additionally, this older age group typically has qualities in common like a strong work ethic, positive outlook, close bonds with family, and a tendency to be religious. These traits factor into a purposeful life so that even on limited social security benefits when combined with the help of their family and community systems, they can still make ends meet. 

At the other end of the spectrum are those Americans who feel, or know, they will have shorter life term expectancy. The Stanford Center on Longevity, however, reports that most people underestimate how long they will live. Today a 65-year-old man can expect to reach 84 years of age while a woman of the same age will probably reach 86.5 years. Studies by the Society of Actuaries are reporting life expectancies for those currently in their mid-50s (one in two women and one in three men) will live into their 90s. The cautionary tale is even if you project that you may not live long, you might indeed. It is best to anticipate being around and making financial decisions about social security benefits that reflect a longer life.

Claiming benefits early to invest the money does not mean you will come out ahead and may put you significantly behind. There is no guaranteed investment product with a return as high as delaying your application for social security benefits. Claiming benefits early can also shortchange your spouse. A married couple will lose one of their checks when the first spouse dies. The loss of a check can create a severe drop in income even if the survivor receives the larger of the two checks. This benefit loss should incentivize the higher earner of the couple, with the larger check, to delay taking their benefit so that the survivor spouse benefit is more substantial. 

You do not need to claim your social security benefit as soon as you stop working. Most financial planners will suggest tapping into other sources of income like a retirement fund or additional savings that allows your social security benefit to grow. Just delaying your benefits from age 62 to 66 can translate in a sustainable annual increase of 33 percent, so even a four-year delay can provide substantial returns. 

What about 2035 and the projected insolvency to fund social security benefits? If Congress does not act, the social security system will only be able to pay out 77 to 80 percent of the benefits promised. While this is not good, social security is not going bankrupt. The funding mechanisms must, however, get straightened out by politicians who want your vote to keep them in office. The silver tsunami of voters ensures that Congressional leaders and policymakers cannot overlook the senior demographic, which is critical to their re-election.

Each person’s or couple’s situation is different; their savings, assets, debt, work history, and retirement planning all vary widely. Additionally, according to Barrons.com, every state has a distinct annual spending threshold recommended for a comfortable retirement. To learn your best options and create your plan for a successful financial retirement, including when to take your social security benefit, talk to elder counsel. The social security benefit structure and rules are changing, change with it to maximize your benefits. If you have questions, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com. We are here to help.

Common Online Scams and How to Avoid Them

The online world is rife with scams, and the number of people in the online world makes it a target rich environment for scammers. Seniors and near seniors should be aware of some of the more common attacks aimed to gain access to your money as well as identity. If you have social media accounts, email, or shop online, you are being targeted by scam artists. Here is what you need to know about some of the most common online scams. 

The product reads or sounds to be amazing. There are testimonials of success or satisfaction galore with the product that includes a Free Trial Offer! What can go wrong if all you do is pay a modest sum for shipping and handling? Here is what is wrong. Your payment for shipping and handling allowed them access to your credit or debit card information and buried deep in the fine print are the real terms of the deal which obligate monthly payments of some much higher monetary amount after your free trial expires. This payment has to be canceled within the stringent guidelines of the contract you agreed to by clicking a box. Read the user agreement or contract parameters before accepting the free trial. Reputable companies will allow cancellation of the advertised product however, if you cannot get out of the contract immediately cancel your card and negotiate a refund. If that doesn’t work, contact your credit card company and make an appeal for their help to gain restitution.

Always be aware of your digital surroundings as local Wi-Fi zones may leave you vulnerable to a hotspot imposter. In a coffee shop or an airport if you are logging onto free Wi-Fi or what resembles a pay service like Boingo Wireless you may be logging onto an illegitimate site designed to look like the real thing. A criminal can be hosting a false Wi-Fi site near you on a laptop. Free, unsecured sites allow for crooks like this to data mine your computer or phone for credit card, password, or banking information. The information is then typically resold to another criminal who will exploit your information for money. It can be tough to tell what a legitimate Wi-Fi spot is. One protective mechanism is to ensure you are not automatically set up for non-preferred networks. If you are not sure how to do this, ask a trusted internet savvy family member or friend. When traveling pre-purchase a credit gift card through MasterCard or Visa and use this for online purchase for access to airport Wi-Fi to protect your data and do not do banking or internet shopping from any public hot spot unless you are sure the connection is secure as it is not worth the risk.

Don’t fall for click bait. The chances of you being the winner of a contest for a free iPad or other expensive prize is likely a scam to get you to click the link provided to “learn more”. Often the connection is grabbing your IP address and adding your computer to a botnet that can be used for a multitude of nefarious purposes. Before clicking on a shortened URL typically found on Twitter and other social media that limits characters check the profile of the user promoting the link. For instance, if the user is following thousands of people, but no one follows them, it is most likely a bot set up to trap your data. 

Sometimes on a computer, a window will pop up about seemingly legitimate antivirus protection with an alert stating that your machine has been compromised with a dangerous virus, bug or malware. You are then prompted to click on a link that will scan and remove the offending virus for a fee and the promise to clean up your computer. When you click on the suggested link, the bogus company will instead install malware, or malicious software, on your computer, compromising all of your data. The front is to scare you into acting right away out of fear to protect your computer, but the opposite happens. Often the design of these pop-up windows has a look and feel that mimics reputable companies like Microsoft. If a pop-up virus warning appears, close the window without clicking on any links, and then use tools in your operating system to run a scan to check for system integrity.

If your bank sends you a text message on your cell phone stating there is a problem with your account and you need to call right away with account information it is not legitimate. Another text message might read that you have won a gift certificate to a well-known store and that all you have to do is call the toll free number and provide your credit card information is also a scam. The gift certificate scam will ask for payment information for shipping and handling to receive your winnings. This is a technique known as smishing, which stands for SMS phishing. Like its email version counterpart phishing, you will lose control of your credit card data and have to chase down fraudulent charges. A real bank and legitimate store would never ask you to reveal account information over the phone for security or to claim a prize, so don’t do it, ever. 

It is noble to be charitable, and Americans are some of the most generous people in the world. Whether in email, social media, text, or phone call do not donate sums of money to charitable causes as the charity is most likely a scam designed to gain access to your money and banking data. Many of these bogus charitable scams will use current headlines to garner your sympathy and get you to act now. Donate to real charities on their legitimate and secure websites only. Write a check to the Salvation Army or Hospice and send it to their valid mailing addresses. Do not be goaded into immediate action. Have a plan for what you choose to donate to charity and follow your plan. 

One of the cruelest scams online is the dating site or chat room scam which preys upon the lonely elderly. You might play a virtual game together online, exchange pictures, or even talk on the phone; that is the hook. You feel like you have met someone you can relate to that eases your loneliness. Typically what happens next is there is a need to wire money to escape a foreign country, an abusive parent, get medical care, or buy a plane ticket to travel to you. It isn’t true. This person isn’t the new love of your life, and you will lose your money and have your heart broken. Scam artists in online social networking specialize in luring the lonely into friendships and love affairs. Be smart about how you approach dating and social networking sites. The minute someone asks for money immediately sign off and employ these tips for keeping yourself safe from online dating scams.

Even be wary of online shopping sites like Amazon or eBay as they allow resellers access to their platforms. Just because you are on a reputable site does not mean the reseller is trustworthy. In some cases, the scammers will send a product, but it will be counterfeit. In other cases, they will post delivery to you 3 to 4 weeks from purchase date, knowing that Amazon pays sellers every two weeks. The scammer will then receive the money from the you and the legitimate company, and you will never receive anything. They have your money, and you have nothing.

The online world is always changing, and scam artists change with it because it is so lucrative. Even if 1 percent of their targeted victims fall prey to their tactics, scammers can make a lot of money. Don’t let that money be yours! Dealing with reputable companies and trustworthy information is the key to your ability to enjoy a successful aging strategy. Contact our office today and schedule an appointment to discuss how we can help you with your planning by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

A Closer Look at Retirement Savings Statistics

It is all over the media that nearly half of Americans aged 55 and older have no retirement savings in an individual retirement account (IRA) or 401(k) according to the federal Government Accountability Office (GAO). Also, while two out of five households do have a defined benefit plan (traditional pension), a full 29 percent of older Americans have nothing saved for retirement in any of these financial retirement tools. Retirement statistics have wide-ranging implications for the economic well being of aging baby boomers. But are the numbers being interpreted accurately? Contributing Forbes Magazine writer Andrew Biggs, who works on retirement policy, public sector pay and other economic issues facing Americans, says that the claim is factually incorrect. Furthermore, he feels how the media will cover the statistics and interpreted by politicians will continue to distort the facts. 

According to FactCheck.org, the statistic the GAO uses is derived from the Federals Reserve’s Survey of Consumer Finances. This survey excludes those Americans who only have a traditional pension. While that may seem a small exclusion, it significantly changes the retirement savings statistic and forward trends for aging Americans’ retirement economic health. When both traditional pensions and retirement accounts are included, a full 72 percent of households aged 55 or more have retirement savings. In 1989 the same analysis criteria indicated only 64 percent of households had retirement income set aside. Therefore there is a net gain over time of 8 percent since 1989 and about 24 percent better than when looking at current statistics that only include an IRA and 401(k) as retirement savings.

If the statistics look much better when traditional pensions are included, why does the Federal Reserve exclude projected pension income in retirement forecast data? Traditional employer-sponsored pensions have fallen off dramatically for several decades. More often, employers are likely to contribute to a personal employee retirement plan like a 401(k). This makes good business sense for private corporations that only have to match or contribute half of an employee’s contribution and avoids the long term financial planning for employee pensions; in particular indexed pensions which progressively increase in value in an attempt to address inflation and the cost of living. The private sector has been bailing out of the responsibility of individual retired workers pensions for some time and for viable economic reasons.

Meanwhile, America’s public sector job pensions are at risk of becoming too expensive for municipalities, states, and even the federal government to guarantee. Cuts in future public sector pension benefits have become common for civil servants, and the reason is the same as for the private sector, cost. Underfunded and unfunded pensions are becoming the norm, which calls into question the reliability of pension plans themselves.

Retirement security is a serious and significant national issue that typically does not get enough thoughtful analysis. Attention-grabbing headlines can distort truths, but even in its best light, many retiring Americans are at significant risk for economic hardship as people are living longer than ever before. It is widely recommended that a retirement plan make provisions for 30 years and with dementia cases on the rise many of those 30 years for a retiree may become very expensive if it includes dementia care. Many retirees plan to rely heavily on their social security benefits check. The notion that social security benefits will be the social safety net promised is also at risk. Much like pensions, the promise of full benefit payment is now at risk to individuals and many retirees are projected to receive only 77 percent of their promised social security benefit payments according to the Social Security Administration’s (SSA) own admission. 

The truth about retirement savings is as individual as you are. These overall projections can be both frightening and distorted with regards to your personal retirement experience. If you are 55 or older and still working, you have the control to make different and better decisions. Any proactive planning for your future retirement is better than abdicating responsibility to private firms and public employment sectors who may have mismanaged your retirement savings. 

If we can be of assistance, please don’t hesitate to contact us by calling us at 1.800.660.7564 or be emailing us at info@covertlaw.com.

The Looming Baby Boomer Retirement Crisis

A study conducted by The Blackstone Group, an independent research firm, on behalf of Bankers Life Center for a Secure Retirement outlines some very unsettling data regarding middle-income baby boomer retirement care preparedness. According to the survey above, the bleak financial reality of this demographic is that 79 percent of middle-income baby boomers have NO savings put aside to cover their retirement care. Couple this disaster savings scenario with the US government’s admission that for the first time since 1982 Social Security trust funds are being used to pay current benefits to recipients and Medicare’s reserves are being used to cover the costs of that program as well. It is the perfect storm of a looming retirement insolvency crisis.

Middle-income baby boomers for this study are defined as aged 53 to 72 with an annual income of $30,000 to $100,000 and less than one million dollars in investable assets. For those baby boomers in this demographic, a mere 4 percent of them have more than $100,000 saved for health care retirement planning, long term care, and general retirement preparedness. While 65 percent of these survey respondents prefer to receive retirement care in their current homes only 55 percent of them expected to be able to do so, and there is a disconnect at what age these care services will be required. A full 45 percent thought that assisted living circumstances would be needed between the ages of 71 and 80 while 37 percent said it would be between the ages of 81 and 90. The problem with these hopes is the ever-increasing presence of Alzheimer’s and other forms of dementia which can push retirees younger than ever into the need for assisted living and retirement care.

According to the survey, 40 percent of those surveyed consider retirement care planning to be a low priority or not one at all, 42 percent thought it to be a medium priority and only 18 percent identified retirement care planning as a high or very high priority. Incredibly 56 percent expected that Medicare would pay for retirement care as needed, including long-term care needs which Medicare does not cover. The costs of long-term care policies are cited as the biggest reason for not making the prudent insurance purchase. 

Dangerous misperceptions about how much retirement care costs and how to pay for it exist. It may seem incredible, but the truth is that baby boomers are better prepared to die than to live. Among middle-income baby boomers, 81 percent have formally made at least one preparation for when they pass away, usually in the form of a will or trust, while only 32 percent have a plan as to how they will receive retirement health care should it become necessary. 

The message is unmistakable; middle-income baby boomers need to address their underfunded retirement plans pronto. There is an overconfidence in this demographic that allows them to think they will be able to manage their and their spouse’s healthcare costs as they continue to age. The reality is that many of them are one bear stock market or health care crisis away from disaster. The federal government and its programs are just as unlikely to be able to stave off the financial crisis brought about by this willful ignorance of the costs of aging successfully. 

If you are in these incomes and age brackets, it is time to take a realistic look at what you can do to better prepare yourself for the coming years ahead. Being financially unprepared to age brings stress and family discord at a time when you should be living your best life. Be proactive, contact our office today and schedule an appointment to discuss how we can help you with your planning by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Vocational Rehabilitation:  A Powerful Tool for Veterans Wanting to Enter the Civilian Job Market

Prospects for veterans looking to enter the job market have drastically increased since the Great Recession. In 2016, the unemployment rate for veterans (4.7%) was actually slightly lower than the rate for the entire population (4.85%). One factor that has contributed to veteran’s success in the workplace is the Vocational Rehabilitation and Employment (VR&E) service provided through the Department of Veterans Affairs.

 

Through VR&E, eligible veterans or active duty service members are given a wide range of services to assist with job training, employment accommodations, resume development/review, and personalized coaching to assist with job seeking skills. If you want to fan your entrepreneurial flames after returning from duty, VR&E also provides guidance in starting your own business. Lastly, VR&E provides assistance for service members who are severely disabled and unable to work in a traditional work environment.

 

Eligibility requirements for active duty servicemembers:

• Expect to receive a discharge other than dishonorable when leaving active duty
• Acquire a memorandum rating of 20% or more from the Department of Veterans Affairs
• Apply for VR&E services

 

Eligibility requirements for veterans:

• Discharged with a status other than dishonorable
• Have the VA declare you have a service-connected disability rating of at least 10%
• Apply for VR&E services

 

The period of eligibility to register for VR&E services is 12 years from being notified of the latter of either the date of separation from active duty, or date you were first notified of a service-connected disability rating from the VA.

 

After eligibility has been established, you will be directed to a Veterans Resource Center in your area where you will be evaluated to determine your specific abilities and needs. This evaluation includes an assessment of your interests, aptitudes, abilities, and whether your service-connected disabilities impair your ability to obtain/hold a job. Post-assessment, you will be given vocational-specific training aligned with your interests. You will be assigned a case manager who will be in charge of guiding you through this process. Generally, the case manager will directly instruct you on subjects where he/she has expertise, and provide supervision to other instructors who provide supplementary services.

 

During your evaluation, if it is determined that your service-connected disabilities are too severe to participate in the traditional work environment, you may be provided with independent living services. You can only take advantage of these services for 24 months because they are meant to be a point of rehabilitation to help you transition into the workplace, rather than a place to stay. Some of the benefits provided include: making arrangements for consultations with health professionals, counseling services to aid in determining your individual independent living needs, and providing information for home modification benefits you may be eligible for, such as the Specially Adapted Housing grant.

 

By now, you’re probably thinking that this investment will take up a good chunk of your time, and you may be worried about maintaining an income while participating in this program. Another great feature of VR&E is that you may be eligible for a subsistence allowance provided by the VA. The amount you receive depends on your rate of attendance in the program, the number of dependents, and the type of training. To view the different rates, click here.

 

VR&E is just one of the many opportunities offered to veterans seeking to enter the civilian job market. If you would like to learn more about other programs, or need assistance in understanding your rights if you are a disabled veteran, please do not hesitate to contact our office.  Give us a call at 1.800.660.7564 or visit our website:  www.covertlaw.com.

The largest coordinated sweep of identity fraud involving US seniors has recently been conducted. The US Department of Justice has reported that more than one million elderly people have collectively lost hundreds of millions of dollars because of this targeted financial abuse. The Department has criminally charged 200 out of 250 defendants identified in the sweep. These third party scam artists account for 27% of seniors who are financially exploited. 

Con artists and scammers employ many different schemes to defraud seniors of their identity information and money. A large number of them are conducted over the telephone, for instance posing as an Internal Revenue Service agent claiming back taxes are owed, or frightening a grandparent to think that their grandchild has been arrested and needs bail money wired to them. Other schemes include the promise of a prize or lottery cash if they just send a large fee in order to collect their “winnings.”. Seniors become easy victims when targeted by these social engineering schemes and it is likely to get worse because of the proliferation of smart phones and other devices that get seniors to explore the online world.

USA Today reports that while phone scams target one senior at a time the online environment is opening doors to thousands or even millions of seniors falling prey to a single scam. Email and other online channels can reach a vast number of potential victims and more elderly people have an online presence than ever before. 

Romance scams that use to be conducted in person can now be achieved in the online dating environment and even in social media. The attacker can befriend multiple seniors online and then ask for money to cover “travel expenses” to visit them. This is particularly successful as many seniors are dealing with isolation and loneliness. 

The online shopping world is another vehicle employed by scam artists to defraud seniors of money. All that is needed is a picture of an object that seems to be owned by the scammer and you have the potential to sell that item over and over again to thousands of seniors. All the scam artist has to do is set up a mirror web site that appears to be a legitimate online auction house such as E-bay to drain seniors of their money as well as obtain credit card and other identity information. These mirror sites masquerading as official websites are often in the email accounts of seniors and a mere click on a link can download malicious software to their device that is designed to steal critical identity information. 

Of the 27% of seniors who do become financially exploited by a third party, 67% do not exhibit symptoms of cognitive decline. That is a huge number of mentally fit seniors being financially exploited. This is a pervasive problem in the elderly community. According to the Federal Trade Commission’s “Consumer Sentinel Network Data Book 2017” identity fraud is second only to debt collection with regard to consumer complaints. Identity fraud accounted for 14% of all consumer complaints last year. The Commission also reported that seniors who are financially exploited suffer higher median losses than other age groups. 

Many seniors who have been targeted are embarrassed, ashamed, or scared as a result. Many never saw themselves as being at risk, they fear retribution from the perpetrator, and they fear that government agencies or family members will label them unfit to care for themselves. 

Systems can be put in place to monitor senior accounts and make their money less easy to access by scammers. In addition, there are legal documents that can protect the accounts of seniors during their lifetime, and eliminate the chance of fraud or abuse.  Please contact us for more information on how we can help you or your loved ones reduce the chance of financial fraud or abuse.

Middle and Low Income Seniors Facing Affordable Housing Shortage

There is a growing need for affordable senior housing that is only starting to be addressed by businesses that build for this market. If you have a lot of money you typically have a lot of options. At the other end of the spectrum if you have nothing you can qualify for government assistance though these programs, but most often include wait times, years of wait times, due to lack of available housing. The truth is many seniors, nearly 40%, have less than $50,000 in savings, not including the value of their homes, according to a study by the Joint Center for Housing Studies and Harvard University. That doesn’t make them poor but it doesn’t make them rich either. Middle income seniors are stuck in the middle and the statistics are indicative of a looming senior housing crisis. By 2035 one in three households will be headed by someone aged sixty-five or more years and the population aged eighty or more years will have doubled to 24 million.

The truth is that thoughtfully designed housing for senior adults is not being created on a scale that reflects the growing need and the need is palpable. Many aging adults don’t even want to project that one day they will no longer be able to live in their current home. When asked about their forward living plans it usually consists of some variant of “the plan is to die in my home.” Sadly, it is impossible to script your passing and while you might hope it happens gently in your home it is more likely that an adverse event, such as a fall, will change everything and you will require some level of care. The Social Security Administration estimates that if you turn 65 today, you will live to 84.3 if you are a man, and to 86.6 for women. Added SSA: “And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of ten will live past age 95.” (https://www.thestreet.com/story/13640644/1/inside-the-nation-s-looming-senior-housing-crisis.html) Those numbers of longevity represent staggering costs when you consider the likelihood that those oldest years will require the most significant care.

That “significant care” costs serious money. According to “A Place for Mom,” the average national cost for a private assisted living facility is almost $4,000 per month. If you want private nursing home care that cost increases to more than $6,000 per month, depending on where you live. If you compare these costs with the fact that nearly 50% of adults aged sixty-five or older have just enough income to afford basic expenses you can intuit it is a recipe for disaster. The only thing left is to spend assets pay for care. That is not a good option for several reasons. First, you will likely run out of assets quickly due to the current costs of care. Second, you would be unable to leave a legacy to children or continue to provide for a spouse after you are gone. 

That is why the understanding of aging is facing a paradigm shift – many companies that design and build for retirement communities want the word “senior” dropped altogether. Innovative technology companies and non-profits are sounding the alarm and changing the discussion from challenge to opportunity, from health care to health, wellness, and lifestyle, and bringing entrepreneurial ideas to create a positive change. It is a step in the right direction but it does not change the current reality – there is a shortage of affordable senior housing and there is a continuing increase in need for senior residency. 

What is your housing reality and future? Do you have a plan in place to handle the changes that most likely will affect you and your living environment? It is important to have this discussion with your family, and with a professional elder law attorney. Proactive planning is in your best interest. Contact our office today and schedule an appointment to discuss how we can help you with your planning.

A significant portion of Americans are saving nothing for retirement and very little in their day to day lives. While the unemployment rate is low and wages are seeing an increase the American worker is not saving enough of their income which will inevitably lead to short falls of operational cash during an unexpected crisis and in their retirement years further down the road. (https://www.cnbc.com/2018/03/15/bankrate-65-percent-of-americans-save-little-or-nothing.html) 

Bankrate maintains that half of all Americans will not be able to maintain their standard of living once they have stopped working. GoBankingRates corroborates these findings citing that over forty percent of Americans have less than $10,000 dollars saved for their retirement. These statistics point to a dismal retirement future for nearly half of all Americans. 

This doesn’t have to be your future. It doesn’t matter how little you currently save. You don’t have to become the horror story of retiring and meeting financial ruin like so many do. What matters is that you change the trajectory of your retirement life by proactively examining how you are spending and saving. The sooner you begin the better your chances of success. 

The first and most important strategy to implement is learning to live beneath your means. That translates into saving money: probably more than you currently do. Saving money is an underestimated survival skill. To save begin by tracking your spending habits for thirty days. Once you have the data create a realistic and doable budget. Fluid expenditures like groceries, eating out, clothing, gasoline and auto maintenance need to have a set monthly budget. Create a simple two columned sheet of paper with budgeted and actual expenditures to monitor your progress. Typical categories where you can reduce expenditures include; cable packages, phone plans, groceries, entertainment costs, gym memberships, clothing and dining out. Start asking yourself over and over “Is this a need or a want?” and if it is a need, how can you make the cost lower. The game is how much money you can save, not spend.

Consolidate your non essential debt and pay it off, completely. Make it a primary goal to get out of debt. Stop being a debt slave. In the credit card industry there is an insider term used for people who fully pay their credit cards off each month. Guess what it is? It is a deadbeat. Companies cannot make money off of you if you stop becoming a slave to debt. If you can’t afford it then find a way to live without it.

Double check your insurance rates on your car, homeowner, and health. Do not purchase flight insurance, extended warranties, and disease insurance. Check this site for fifteen insurance policies you don’t need. (https://www.investopedia.com/insurance/insurance-policies-you-dont-need/). Get rid of the policy all together or find wiggle room for reduced premiums or get a more competitive provider to save money. 

Get rid of automatic payments attached to your banking accounts. Most people can eliminate expenditures they forgot they are even locked into. This also forces you to take control of your bill/payment cycles. Being involved in the day to day of bill payment keeps you far more aware of your financial situation and keeps your mind active.

Consider downsizing your home. If you are in a two story house it is inevitable that one day you will not be able to climb those stairs. A one story home or a first floor condo or apartment can help you purge your life of ‘stuff’ you no longer need. Some of those things can be sold and the proceeds can be saved. Any profit left over from downsizing immediately goes into savings or a financial investment vehicle to provide and protect your senior years. 

These are some but not all of the ways it is possible to change your savings habits. Guidance from a trusted professional is key to the pathway of success because there will always be roadblocks and setbacks that you must make adjustments for. Structuring a legal plan in connection with a retirement plan can provide added protection and allow you to enjoy retirement more thoroughly.

Contact our office today and schedule an appointment to discuss how we can help you with your planning.