As our aging population continues to grow, more and more families will face the need for long-term care for their loved ones. If that care is received in a nursing home, these families will face costs of $10,000 – $15,000 per month (and that number increases each year). Since Medicare does not cover the cost of skilled nursing home care (except for limited rehab stays), most residents must pay the full cost of skilled nursing home care. At $10,000 – $15,000 per month, the average family will exhaust their life savings within the first year of nursing home care. Most nursing home residents will eventually end up…
Grandparents may be tempted to leave an IRA to a grandchild because children have a low tax rate, but the “kiddie tax” could make doing this less beneficial. An IRA can be a great gift for a grandchild. A young person who inherits an IRA has to take minimum distributions, but because the distributions are based on the beneficiary’s life expectancy, grandchildren’s distributions will be small and allow the IRA to continue to grow. In addition, children are taxed at a lower rate than adults—usually 10 percent. However, the lower tax rate does not apply to all unearned income. Enacted to prevent…
The Department of Housing and Urban Development (HUD) has announced changes to the federal reverse mortgage program. Citing the need to put the program on better financial footing, HUD will raise reverse mortgage fees for some borrowers and lower the amount homeowners can borrow. A reverse mortgage allows a homeowner who is at least 62 years old to use the equity in his or her home to obtain a loan that does not have to be repaid until the homeowner moves, sells, or dies. In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank,…
What happens if you are a high-income Medicare beneficiary who is paying a surcharge on your premiums and then your income changes? If your circumstances change, you can reverse those surcharges. Higher-income Medicare beneficiaries (individuals who earn more than $85,000) pay higher Part B and prescription drug benefit premiums than lower-income Medicare beneficiaries. The extra amount the beneficiary owes increases as the beneficiary’s income increases. The Social Security Administration uses income reported two years ago to determine a beneficiary’s premiums. So the income reported on a beneficiary’s 2015 tax return is used to determine whether the beneficiary must pay a…
The recent tragedy in which nine Florida nursing home residents died when the nursing home lost power during Hurricane Irma is causing government officials to rethink disaster planning. In response to the deaths, Florida Governor Rick Scott announced a new emergency rule, requiring nursing homes and assisted living facilities in the state to have generators capable of maintaining comfortable temperatures for four days after a loss of power. Fire marshals must inspect the generators within 15 days after installation. The rule goes into effect immediately and lasts 90 days, after which it needs to be renewed. Florida already required nursing homes to…
One of the greatest fears of older Americans is that they may end up in a nursing home. This not only means a great loss of personal autonomy, but also a tremendous financial price. Depending on location and level of care, nursing homes costs over $120,000 per year. Most people end up paying for nursing home care out of their savings until they run out. Then they can qualify for Medicaid to pick up the cost. The advantages of paying privately are that you are more likely to gain entrance to a better quality facility and doing so eliminates or…
You may have a vision for your retirement, but does your spouse share that vision? Spouses often disagree about many key retirement details. It is important to work together to come up with a plan you both can accept. A 2011 study by Fidelity Investments found that many husbands and wives are not in accord about retirement. For example, the study found that one-third of couples disagreed or don’t know where they were going to live in retirement and 62 percent didn’t agree on their expected retirement ages. Here are some important things to discuss with your spouse as you…
A joint opinion by three New Jersey Supreme Court committees bans web-based services that match litigants with attorneys run by Avvo, LegalZoom and Rocket Lawyer due to ethics concerns. A bar association in New Jersey requested a formal opinion on “whether it is ethical for New Jersey lawyers to participate in on-line lawyer referral services offered by Avvo, Legal-Zoom, and Rocket Lawyer for customers of the companies.” The inquiry was jointly considered by the Advisory Committee on Professional Ethics, Committee on Attorney Advertising, and Committee on the Unauthorized Practice of Law. The Committees issued a joint opinion backlisting the referral…
Around the country, a handful of nursing home companies have begun selling their own private Medicare insurance policies, pledging close coordination and promising to give clinicians more authority to decide what treatments they will cover for each patient. These plans are recent additions to the Medicare Advantage market, where private plans have become an increasingly popular alternative to traditional fee-for-service coverage. Unlike other plans, these policies offered by long-term care companies often place a nurse in the skilled nursing facility or retirement village, where they can talk directly to staff and assess patients’ conditions. Some provide primary care doctors and…
After initially delaying a rule intended to prevent financial advisers from steering their clients to bad retirement investments, the Department of Labor (DOL) announced that the rule will go into effect on June 9, 2017, but its future is still unclear. Earlier this year, President Trump signed an executive order delaying the so-called fiduciary rule, the first part of which was scheduled to go into effect in April 2017, and calling for a review. The DOL is still reviewing the rule and can still make changes to it or repeal it based on the review, but the agency said there…
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