New Seniors » Money and You

New Seniors must face the new realities of Medicare

-NewSeniors Editorial — Wed, 06 Jul 2011 13:16:42 +0000

Based on the current rhetoric, Medicare has become “Mediscare,” but neither political party seems to let the truth get in the way of their agendas. Those of us 65+ have a vested interest in the effects of health care reform, as do citizens of all ages. The problem is Medicare has already been targeted cuts of $500 billion, which few talk about.

As part of the president’s health care plan that was signed into law, we were told that the half-trillion dollars would be realized by eliminating waste, fraud and abuse within the system. These cuts will include paying less money to doctors and force them, along with hospitals, out of the Medicare system in the future, making it increasingly difficult for older Americans to find health care providers willing to accept Medicare.

The good news is that both the president’s health care law and congressman Ryan’s proposed plan will not affect anyone 55 and over. The bad news is if something is not done to reduce the growth of health care costs the tax burden will double within the next two decades.

Under the current plan, reducing the amount of money the government spends for Medicare will eventually result in fewer benefits. At the same time, taxes will increase to pay for the growing number of people who will qualify for Medicare coverage. Younger Americans will have to shoulder the rising costs from an already out-of-control system. And, they will wait longer to receive whatever benefits that can be squeezed from a shrinking budget allotment for each individual.

The only thing left to do is reform the system so it still exists for those now under 55 when the reach the time for Medicare to kick in. A combination of some form of medical saving account and boosting the age for qualifying will likely produce the best results. Younger adults will complain. Do you remember when the Baby Boomers were faced with moving the age for full Social Security benefits? They may not have liked it, but now it’s simply the way the program works.

Don’t forget, under the president’s law an additional 32 million people will be insured. They were previously uninsured, so the money has to come from somewhere. Some will come from the $500 million being cut from the Medicare budget. Higher taxes, yes. More efficient system operations, doubtful (after all the government is running this). Fortunately, the folks under 55 will have several years to save for what will certainly be increased health care costs when they reach retirement age.

So, today’s New Seniors have little to worry about, right? Wrong! There will be more health care regulations in place, which could adversely affect those 65+. One major concern is the establishment of a government run Independent Payment Advisory Board.
This panel will have the responsibility to approve when to get health care, where to get it and whether to extend care or not. That’s why it is incumbent upon all New Seniors to contact their elected representatives and say, “No death panels.”

Are Americans willing to accept less government spending?

-NewSeniors Editorial — Mon, 13 Jun 2011 03:12:20 +0000

Half of likely voters oppose the president’s budget proposal, according to a recent Rasmussen poll. However, the budget passed by the House (the Ryan plan) is considered unacceptable by some, particularly younger voters. With nearly 50% of Americans receiving entitlement dollars, it will be difficult to balance the budget or come close to it without re-evaluating government programs once considered to be untouchable.

Fewer than 3 in 10 of the respondents between the ages of 18 to 39 followed the news reports about the presidents proposed budget. However, a Gallup/USA Today poll showed young voters overwhelmingly siding with the president’s budget by a margin of 23 points (53% for and 30% against). About half those 65+ preferred the House plan, and the 50 to 64 age group was not far behind.

The Rasmussen study also shows a great disparity between races. With whites, 56% of those surveyed opposed the president’s plan. Only 3% of blacks were against the plan, while 55% of “others” (primarily Hispanics and Asians) responded negatively.

When asked about the appropriateness of the spending cuts in the president’s budget, 54 % of the total sample thought it was too little as did 58% of whites, 56% of others but only 16% of blacks. In terms of the proposed deficit reductions 40% of white respondents said the president’s plan relied mostly on tax hikes with 14% saying spending cuts. The other category answered 47% and 11% respectively. Blacks, however, answered 11% and 33% when asked the same question.

There are obviously differences by political party affiliations as well, but the lack of understanding regarding the fiscal condition of the country and what is required to fix the problems may be coming from the misinformation machines. Scare merchants on both sides of the political fence are accentuating the negatives and ignoring the positives regarding changes in established government programs.

Medicare and Social Security are two subjects that get a great deal of media attention without helping the general population understand the problems and solutions needed to get the nation’s finances under control. The fact that more and more people will be eligible for Social Security and fewer people will be paying into the system must be addressed. Medicare is also in trouble as the 76 million boomers continue to turn 65 at the rate of 4 million people each year for the next 19 years. Americans must understand that something must be done before the country goes the way of Greece, Ireland, Portugal and other European countries.

In the meantime, the media has got to stop scaring the older part of our population, those 65+. This age group, in fact those 55 and older, won’t be affected by any of the proposed changes. The costs will be the basic responsibility of those who will ultimately reap the benefits. So, let’s get the information needed for everyone to make enlightened decisions that will help turn the country around and allow the USA to be stable once more.

What will your home be worth in 5 years?

-NewSeniors Editorial — Mon, 06 Jun 2011 02:11:33 +0000

If you’re like most Americans, the value of you home has already dropped significantly. And, home prices have continued to decline so far this year. There’s no real recovery in sight as attested by a recent poll showing just 15% of homeowners believing their house will be worth more next year. A look inside the numbers indicates the future is troubling.

First consider the short-term market attitudes. Following a survey conducted in mid-April by Rasmussen it was reported that 15% of homeowners thought their homes would go up in value next year, 33% expected they would be worth less and 50% said they would retain their current value.

Of course, by maintaining a home’s market value today means it may sell for 20% less than just a couple of years ago. That’s a big loss of potential income for anyone, especially New Seniors who expected their homes would help finance retirement expenses. Many of these 65+ homeowners hoped to sell the house and move to smaller quarters. Some wanted stay put and get a reverse mortgage. Others planned to wait until it was time to go into a retirement community before placing their homes on the market.

In the meantime, those who are decades away from retirement continue to worry about making monthly payments and hope things will eventually turn around. However, their attitudes suggest a bleak picture going forward. In April 2009, 55 % of respondents said the value of their home would increase in the next 5 years. In April 2011 the number dropped to 39%. This is down by 5 points in a single month and represents the highest negatives in a 2 year period.

Men have a more positive attitude toward home values increasing over the next half-decade (45%) compared to women (33%). For prices remaining the same, 31% of men said they would as did 42% of the women. Among those believing prices will continue to fall, men and women were about equal at 18% and 19% respectively. And, attitudes tended to become more negative with age; nearly half (49%) of those 30 to 39 saying prices will go up in the next 5 years while only 37% of those 65+ shared this belief.

Waiting for the market to get healthy can be an expensive proposition. Energy costs are on the rise as are the prices for building materials needed to keep a home looking good. All the while, many homeowners are faced with rising property taxes. So owning a home has become less attractive to some. This makes the potential buyers pool even smaller.

Nonetheless, most Americans dream of owning a home and still consider it a good investment. This means saving for a down payment rather than getting into a place for nothing down and interest only for several years. Smaller homes at lower prices are growing in popularity. Multi-generational families (grandparents living with their adult children and the grandkids) may influence marketplace dynamics. One thing is certain; there will always be a real estate market in this country. We just don’t know what it will look like as changes occur in the months and years ahead.

Corn is becoming gold-like on the world market

a NewSeniors contributor — Wed, 04 May 2011 01:07:38 +0000

The United States is the number one producer of corn in the world. We grow twice as much as second place China and more than the rest of the top ten combined. An important food commodity in countries around the globe, corn is also an ingredient in many processed food and in many non-foods products we use daily. American farmers will plant a record 92 billion acres of corn in this crop year. But there is a problem.

Demand has caused corn prices to rise. Worldwide population has doubled over the past 50 years from 3 billion in 1960 to nearly 7 billion in 2010. Last year 2.6 billion bushels of U.S. corn went into ethanol production. The EPA (Environmental Protection Agency) has decided to stick with gasoline standards that include ethanol, even though onetime supporter Al Gore admits he was wrong about the policy to subsidize this effort that costs taxpayers billions of dollars annually.

As ethanol production takes more of the corn crop the price of this commodity will continue to increase. This hurts people in countries that depend on corn as an important part of their diet, in fact their very existence. Many of our processed foods and other goods use corn and its byproducts as an ingredient. This, along with ethanol being 10% of every gallon of gas sold, will end up hurting Americans in the wallet.

Here are a few of the processed products using corn: baked goods, brewed and carbonated beverages, cheese, cereals, condiments, chewing gum, pancake and biscuit mixes, gravies and sauces, canned and dehydrated soups, coffee creamers, condensed milk, fruit products, frostings and icings and powdered sugar.

In addition, corn can be found in these products: vinegar, distilled beverages, baby formulas, many fried foods, candy, ice cream, cured meats (bacon, luncheon meats and hot dogs), peanut butter, frozen seafood, instant tea mixes, low calorie sweeteners, most snack foods, canned vegetables, gelatin desserts, margarine and nutritional supplements.

Non-foods using corn include: adhesives, aspirin, talcum powder, paper cups, toothpaste, medicines (syrups, ointments and lozenges), laundry starch and chalk. And the big one, which uses about 40% of total U.S. corn production, is livestock and poultry feed thereby pushing up the price of meat and chicken at supermarkets and restaurants.

At a time when government spending continues to run wild, the subsidies for corn producers should be reconsidered, because higher prices mean higher profits for farmers; however, politicians in corn producing states will resist. The EPA shows no interest in readdressing the ethanol fuel requirements, so gas prices will continue to climb.

Some manufacturers have found a way to disguise price increases. They have reduced the amount of product in their packages. Take a look at the items bought on a regular basis, many have reduced the contents by10% or more. The only good news is that we may actually eat less. Does this mean waistlines will shrink by 10%, too?

What happens after reaching retirement age?

Don Potter: Editor-in-Chief — Fri, 29 Apr 2011 01:04:16 +0000

Over the past few weeks, I talked with several acquaintances that were retired or qualified for it. I asked each one how they enjoyed their new status and what they do with their time. The answers are surprising as well as disappointing.

Two of the four men had done well in the business world and had solid pension plans. Both have been retired for two years. Both belonged to country clubs and played golf on an average of four times each week. And, both complained about being bored although one said he tried to spend time with his grandkids and the other had a couple of hobbies he dabbled in. However, it was apparent that each man missed their jobs and the camaraderie they had in the workplace.

Of the other two men, one had been eased into retirement and was looking for some kind of work to supplement his resources, which he admits were barely adequate. The other man was still working, although he was beyond retirement age. He needed the money and was completely unprepared for living on what he called meager savings. So he was fearful of getting sick or losing his job for any reason. Each had worked a lifetime without much to show for their efforts.

The situations were somewhat different for the two women with whom I spoke. One had a small business that she sold. And with the money she brought to the table along with her husband’s retirement fund, there was no financial pressure. However, in the year since she stopped working, she had not found a comfort zone in retirement. The other women and her husband work part-time jobs to help make payments on a major asset, their home. This was necessary, since refinancing for extra cash in the good times left them with a substantial monthly mortgage payment in retirement.

These situations are not necessarily projectable to the entire New Seniors population. But there are likely many of those 65+ that may identify with the boredom, financial insecurity and confusion of life when it should be a time of joy. The dream of freedom, time to do the important or fun things in life and being able to relax with a feeling of accomplishment for jobs well done have yet to materialize for many New Seniors.

Economic conditions in America and around the world have left even those believing they are secure to have concerns. However, New Seniors have added financial worries such as the fate of Medicare and Social Security – programs that could see major changes in the benefits they provide.

Probably the best advice for all these folks is to accept their situation. In fact, they should embrace it. Once they realize where they are on life’s path, maybe living in the moment will have more allure. And, with that fears lose power and life somehow seems better. Then, they’ll be free to help others that are less fortunate or have special needs. That’s when the real joy of living can be found.

New Seniors will be hurt more by inflation than other age groups

-NewSeniors Editorial — Mon, 25 Apr 2011 01:36:28 +0000

Why? Because food prices climbed 3.9% in a single month, due in part to vegetable costs jumping by 50% along with higher distribution costs resulting from soaring gasoline prices. Petroleum price hikes are also responsible for higher prices for many products purchased by those 65+ as well as anyone on fixed incomes.

The wholesale price of food increase is the biggest since 1974, with harsh weather and energy costs being blamed. In the warmer months ahead, supply problems are likely to result in continued higher gas prices. Some experts are predicting this trend will continue for the remainder of the year. This means inflated costs for home heating next winter.

In the meantime, the Federal Reserve continues to print US dollars, which decreases the value of the dollar making the price of imported raw materials and finished goods higher. So the Fed must deal with a double-edge sword of reduced consumer purchasing power and inflation. Solving one issue requires lower interest rates while the other calls for raising them.

If demand for products and services diminishes, the slow recovery will become even slower and possibly come to a halt. This could be when stagflation sets in, much in the way it did in the late ‘70s. These problems are occurring in the second year of the cost of living adjustment (COLA) freeze on Social Security benefits. So Americans on fixed incomes are feeling the bite in three vital areas: food, gasoline and energy costs.

On top of the apparent problems that can be seen at the cash register, there are hidden problems facing New Seniors and other fixed income groups. If the federal government does not get the deficit under control, entitlement programs such as Medicare and Social Security will suffer or taxes will go up. Some states are raising taxes; others are trying to extend or make permanent those taxes and fees that were supposed to be temporary. And local counties and municipalities are faced with similar financial problems.

Unemployment benefits continue for nearly 4 million people, the new health care program will provide insurance for about 33 million people. The cost at the federal and state levels is enormous, since half the newly insured will be covered by Medicaid with the states picking up about half the costs. Where will the money come from?

New Seniors must let their federal, state and local elected representative know how they feel about the financial situations that are causing our quality of life to be pushed to the breaking point. They say our taxes won’t go up and our benefits won’t be taken away. But paying higher prices for the things we need means we have less money to spend, so this is tantamount to a tax increase.

Remind the politicians that those 65+ accounted for nearly 25% of the vote in the last election. Tell them if they don’t take appropriate actions now, we will take actions at the polls in the next election, which is only about a year-and-a-half away.

Americans are unhappy with direction of the country

a NewSeniors contributor — Wed, 30 Mar 2011 02:15:46 +0000

Nearly 70% of US citizens are dissatisfied with the federal government’s size and the power it wields. And 7 out of 10 adults surveyed believe the moral and ethical climate of the country is wrong, which represents a seismic attitudinal shift in less than a decade.

The Gallup organization first asked questions about the following topics in early 2001. Over the past ten years, the pollster asked questions about several aspects of American life. These included quality of life, effectiveness of government and the system, moral and ethical climate, individual opportunities to succeed through hard work, attitudes toward big business and the influence of religion.

In 2001, the numbers for federal government and how it works were the direct opposite from the poll taken earlier this year. Then, only 30% were dissatisfied with the size, influence and workings of government. The highest positives were recorded in early 2002, just a few months after the 9/11 attacks, when 76% indicated their satisfaction.

By contrast, this year only 29% of respondents indicated satisfaction with the size and influence of big business in their lives. Dissatisfaction was 67% The best ranking for major corporations was 50% satisfaction in 2002.

Better than half, 55%, of those surveyed said they were satisfied with an individual’s opportunity to pursue the American dream and get ahead through hard work. The dissatisfaction level was 44%. As recent a 2008 satisfaction was 68% and dissatisfaction was 31%. Satisfaction was at 76% a decade ago.

Overall, 8 in 10 Americans are generally satisfied with the quality of their life, although this is declined by 6% over the past 2 years. Satisfaction with the influence of organized religion started the decade at 61%, spiked at 69% the next year and is now at 58%.

The moral and ethical climate in the country experienced large swings with the highest decade-long positive level registered in 2002 when 47% were satisfied compared to just 30% today.

With the public unhappy with big government and big business, they seem more reliant on themselves and on their individual faith to accomplish positive goals in the months and years ahead. This may explain why, with negative feelings about the moral and ethical climate of the times, an overwhelming number of Americans are still satisfied with their quality of life.

Now, we must do the things needed to accomplish worthwhile goals. As we do this, let us take the time to share our good works with others. Hopefully, they will do the same. And before we know it, America will be back on the right track. This will take us beyond petty political squabbling or worrying about what others have and put us in the position working together while reaching for our personal dreams.

Trading stamps are not gone; they have returned in a high tech form

Don Potter: Editor-in-Chief — Mon, 28 Mar 2011 19:10:51 +0000

What New Senior can forget being given the distinction of licking and pasting a kitchen drawer full of S&H Green Stamps into the collection books so Mom could go to the redemption center and turn them in for merchandise rewards? It could have been Top Value, Triple S, Plaid or Blue Chip stamps. For many years, these bonus stamp programs played a big part in determining where American families shopped.

The whole thing stated back in 1896 with two men named Sperry and Hutchinson (S&H). They began offering stamps to merchants as a way of rewarding current customers for their loyalty and attracting new ones. The concept caught on in many parts of the country, although some states had restrictions such as requiring the stamps be redeemed for cash rather than merchandise. Where this was the case, such as Wisconsin, people would actually drive to another state to find a redemption store.

Most folks viewed the stamps as a way to get “free” merchandise just by patronizing their favorite supermarkets, drug store and gas stations. This belief carried through the mid-1960s. After a series of recessions, retailers lost interest in trading stamps and began offering price discounts to attract customers who now took the stamps more or less for granted. Aggressive retailer promotion got the consumers to consider price as an immediate reward rather wait to redeem stamps for some yet-to-be-determined merchandise in the future.

It did not take long before the stamps started to disappear from the retail checkout counters. Then redemption centers closed. The stamp companies tried other ways of promoting their reward programs, but nothing really took hold. Years later the Internet came on the scene, and marketers looked for ways to sell products and services through this new medium. It was the need to differentiate, reward customers and garner new ones that brought the century old S&H rewards program to Internet retailers.

The name of the program has changed, as did S&H’s ownership (the company was bought and sold several times in recent years), but its core concept remained the same. “Greenpoints” are offered by many online retailers: Target, Home Depot, Kohl’s, Drugstore.com, Dell, Old Navy, Kmart, Flowers.com, Office Depot, Sears, Shoes.com, iTunes and others.

This phenomenon is not surprising since most marketing concepts are cyclical in nature. Aren’t the airline mileage programs a variation of this? American Express offers hotels and other vacation amenities for using the travel points. The company also has an online program to redeem the points for merchandise. Does this seem like a repackaged version of the S&H program?

Of course, the nice part of the modern stamp programs is there’s no need to have a special drawer devoted to stamp storage. And, nobody has the job of licking stamps and placing them in a book. Isn’t progress wonderful?

Who is really to blame for the bad economy?

-NewSeniors Editorial — Mon, 28 Mar 2011 01:56:43 +0000

The finger-pointing continues as the economy remains stalled, unemployment stays high and inflation creeps into all our lives. Politicians blame the opposing party. Voters think both sides are responsible. Most Americans believe they know more about economic issues than their elected representatives.

A recent Rasmussen poll asked who is responsible for the country’s economic problems? Respondents placed the blame on the past administration versus the current one by a margin of 52% to 41%.

All age groups answered in much the same way, with the exception of the youngest and oldest age cells. Those 18 to 29 placed the blame on the previous administration by a 68% to 27% margin. Respondents 65+ saw things differently; 44% of New Seniors said it was the last president’s fault compared to 49% who affixed the problem to the current administration’s policies This was the only age group were a plurality saw it this way.

There were wide variations by race. Among whites 44% believed the country’s economic problems were due to the recession that began with the past administration. The current administration was named by 47% of these respondents. With blacks, 95% blamed Bush and only 3% attributed the problem to Obama’s policies. Those classified as “other” were in the middle with a response of 60% and 36% respectively.

Respondents were also asked whose judgment you trust more, yourself or the current president, when it comes to economic issues facing the nation? Less than 1 in 4 selected the current president while 6 out of 10 said themselves.

Only 48% of those18 to 29 expressed self-reliance when answering the above question. In all other age groups, the majority said themselves. Again, the greatest differences are by race. With white respondents 66% said themselves compared to 22% who answered President Obama. Others weighed in at 60% and 24%, which mirrors the total sample. Blacks relied on themselves only 19% of the time and 54% went with the president.

Blaming politicians is a natural reaction. The results of the 2008 and 2010 elections clearly indicate the voters’ dissatisfaction with past and present administrations. The 2012 balloting will reflect the tone of the population, as well. Both parties have an opportunity to act like adults and deal with the problems confronting us now and in the future rather than playing political games at the country’s expense.

Do you like the way your elected representatives are doing their jobs? If not, have you let them know how you feel and why? If we all do that, maybe the politicians will finally realize they work for us and not the special interest groups. That’s when the government will get back to taking care of the people’s business.

New Seniors should be concerned about debt for future generations

a NewSeniors contributor — Wed, 23 Mar 2011 01:13:14 +0000

The national debt has increased to more than $14 trillion dollars as of mid-February, 2011. This translates to about $125,000 per US household. Without serious spending cuts and major changes in the way government handles the money we entrust to it, future generations will drown in a sea of debt, which we created.

Those over 65 can act smug and say it wasn’t our fault. The truth is we let government get out-of-control by not paying attention to what was going on in Washington, let alone our state and local governments. Electing the same politicians to office, again and again, or not participating in the voting process took place on our watch.

Thinking that the money the elected officials spent was somebody else’s, such as taxes from big corporations or rich folks, has come back to haunt us. Businesses had to pass on their added costs of doing business to us, which has helped fuel inflation over the years. And, when the rich could not make up budget shortfalls, the burden fell on us in the form of additional and often hidden taxes as well as fees and up charges for services.

In the past two years the federal government has borrowed an addition $29,660, according to CNS News. Over that period the national debt soared from $10.79 trillion to the current level of $14.13 trillion. This 30% increase over 2009 is unsustainable, yet the president’s recent challenge to his cabinet called for cutting budgets by only $100 million, which hardly makes a dent in the debt.

Politicians are known for using the tactic of “kicking the can down the road.” This is simply a way of delaying making difficult decisions, those that might adversely affect their reelection, and leaving the problem for someone else to solve. Entitlements have always been considered the third rail in political circles. And, that belief prevails today.

If the government cut all discretionary spending, the deficit would not be eliminated. So it is the untouchable programs that must be examined and reformed. Unless our elected representatives are willing to address the sacred cows of Social Security and Medicare/Medicaid, there is little hope for getting the federal budget back in line. We New Seniors participate and are deeply concerned with these programs. Therefore, we have strong opinions about their sanctity.

Since we are living with Social Security and receive government sponsored health care benefits, New Seniors know what they mean to us. Each of us should contact our representatives and express our opinions, both for the importance of the programs and how they might be improved for the generations not yet of age.

Since those 65+ accounted for nearly one in four votes cast last November, politicians must listen to our voices now if they want our votes later. Let them know what you think works and what doesn’t work. Give them thoughts for improvements as well as cost savings, because we must get involved for our sake and the sake of generations to come.