In 2018, Social Security recipients will get their largest cost of living increase in benefits since 2012, but the additional income will likely be largely eaten up by higher Medicare Part B premiums. Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a small boost in 2018, amounting to $27 a month for the typical retiree. The 2 percent increase is higher than last year’s .3 percent rise and the lack of any increase at all in 2016. The cost of living change also affects the maximum amount of…
Q: My wife and I have just become agents under a power of attorney for her parents. They are both in their late sixties, and her mother has just been diagnosed with terminal cancer. We moved them into a retirement home so her mother can get the extra help she needs. After gaining access to their finances, we’ve discovered that her father has accumulated over $100,000 in credit card debt spread among several cards. We purchased their home, and they recently sold some land that was in a trust. Her mother just transferred to my wife a 25 percent interest…
The main purpose of a will is to direct where your assets will go after you die, but it can also be used to instruct your heirs how to pay your debts. While generally heirs cannot inherit debt, debt can reduce what they receive. Spelling out how debt should be paid can help your heirs. If someone dies with outstanding debt, the executor is responsible for making sure those debts are paid. This may require selling assets that you would like to leave to specific heirs. There are two types of debts you might leave behind: Secured debt is debt…
Q: My mother was admitted to a nursing home in November 2016. At that time we applied for Medicaid and she was approved. In April 2017, she had a stroke and my sister decided to take care of her at my sister’s house. My mother’s house is valued at around $80,000, and she has a mortgage with a $57,000 balance. No one is currently living in the house and between the mortgage, insurance, and taxes, it is a financial burden to keep the house. I think it is best to let the house go into foreclosure, but my sister wants…
Planning for these Economic & Political Times FIVE THINGS TO DO TODAY!!! What it takes today to prepare for a successful retirement tomorrow. Although you may have worked hard throughout your life, the economy does not care. There could be more recessions, inflation diminishing your purchasing power, the growing national debt, and the end of entitlement programs, i.e. Social Security, Medicare and Medicaid. So what will happen to you? How do I make sure I have enough income for me and my spouse through retirement? What happens if I get sick? How will I pay for my care? What are…
The main goal before you retire is to make sure that you have enough money when you do retire so you can maintain your standard of living. How much is enough depends on when you wish to retire, what your anticipated living expenses will be, what rate of return you can expect on your savings, and whether you will continue to work at all after retirement. The anticipated date of your retirement affects two important factors: how much time you will have to save up for retirement and the number of years you can expect to live after you retire….
Retirement has changed radically over the last several decades in America. Years ago, you expected to work most of your life for a single, large employer and you then count on a pension. “Retirement planning” meant figuring out how to use your free time. Today, in all likelihood you will be living in retirement on money you, yourself, saved. “Planning” means calculating rates of return and deciphering tax rules. Without question, the core strategy to succeed in having enough for retirement is living well within your means. Keep in mind, there are significant differences in approach depending on your priorities,…
In order to be eligible for Medicaid, applicants must have no more than $2,500 in countable assets (the dollar figure may vary, depending on the state). Applicants for Medicaid and their spouses may protect savings by spending them on non-countable assets. The following are examples of such expenditures: prepaying funeral expenses paying off a mortgage making repairs to a home replacing an old automobile updating home furnishings paying for more care at home buying a new home In the case of married couples, it is often important that any spend-down steps be taken only after the unhealthy spouse moves to…
Congress has established a period of ineligibility for Medicaid for those who transfer assets. For transfers made prior to February 8, 2006, state Medicaid officials would look only at transfers made within the 36 months prior to the Medicaid application (or 60 months if the transfer was made to or from certain kinds of trusts). But for transfers made after February 8, 2006, the so-called “look-back” period for all transfers is 60 months. While the look-back period determines what transfers will be penalized, the length of the penalty depends on the amount transferred. The penalty period is determined by dividing…
After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient’s care. This is called “estate recovery.” For most Medicaid recipients, their house is the only asset available. Life estates For many people, setting up a “life estate” is the simplest and most appropriate alternative for protecting the home from estate recovery. A life estate is a form of joint ownership of property between two or more people. They each have an ownership interest in the property, but for different periods of time. The person holding the life…
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