November 16, 2019

A Retirement Reality That Is Important To Remember

On a regular basis, readers will leave comments that remind me of one important reality of retirement that doesn't seem to generate enough attention:

Simply put, retirement is a self-correcting process.

OK, that needs explanation. Regardless of what part of your non-work life we discuss, this principle remains the same. We constantly adjust to what is our reality at that point in time.

This should be quite comforting. All the worry we put ourselves through is because we get hung up on what we want to happen, or what we think should happen. That causes us to become fearful that the money we set aside will never be enough. Our health will fail us so completely we will be unable to do anything we enjoy. We will become bored silly. Our relationships will weaken, leading to divorce, no friends, and a solitary future. Looking back to a previous post, we will find ourselves helping to support or care for a grown child. Retirement will not be what we dreamed it would be.

I will say right now: retirement will not be what you thought it would be. OK, maybe you are one of the few who are living precisely how you want. Everything you planned for came true. You wish you had started years earlier. You are living your retirement dream.

This outcome is not unheard of, but not the norm. Just one caution. At some point it is likely one of the three stool legs that are supporting you: finances, health, and relationships,  will break, or at least wobble. Are you confident in your ability to adjust? My message is, you should be. 

Maybe the whole experience is completely different than what was in your mind's eye. Maybe it is so much richer, full of experiences that make your days fly by. You have discovered new facets to your personality and talents that you never knew you had. You couldn't plan for what has unfolded because your dreams didn't expand that far.

Or, it is certainly possible that this phase of life will throw enough struggles your way that you are thinking of renaming yourself Job. Nothing is how you planned it, and that isn't good. You wish some parts of your life were different, or at least easier, but that is not how things are going.

No matter in which of these three scenarios you find yourself, the truth that retirement is a self-correcting process remains. We have the remarkable ability to take what we are given and make it work for us, the best it can, at that moment.

Retirement is self-correcting. I wish I had understood that much earlier in my journey. Now that I do, my worry meter is dialed way back. I am confident I can, and will adjust as circumstances present themselves.

So will you.

November 12, 2019

Hidden Treasures In A Closet

While going through a closet for our fall declutter project, I stumbled across two interesting items we removed from my  parent's apartment years ago when dad moved to assisted living. One was an envelope stuffed with index cards. On both sides of each mom had listed every book she had read from the mid 1990's until her eyesight started to fail in 2004.

Included was either a star for a good book, or a emphatic "No" for the ones that didn't please her. Fiction was her favorite, especially crime mysteries and historical romance novels.

I found it fascinating to look at her choices. I made a list of all the non-romance books she liked and have started my own list to read through them. It will be nice to know she and I are sharing some of the same experiences.

I also found a complete set of travel journals. Mom and dad loved to take road trips - everything from a few days away to 45 day marathons. Mom recorded her reaction to every day of every trip, even to the point of listing the cost of the meals and gas fill ups.

 As I reviewed each journal I was reminded how often they were on the road. Beginning in 1994 and continuing until early 2002, I was hard-pressed to find more than two months between entries. Even if it was just a quick overnight trip to Tucson, mom and dad were most happy driving somewhere. 

During that period they went to Europe twice. Just like the road trips, mom recorded her reactions to everything, both good and bad. While I think they enjoyed their time overseas, I sensed both were happiest inside the Toyota putting miles between them and home and then back again. 

As I read each journal mom's health decline was quite obvious. Toward the end of the 1990s she began referring to the use of a wheelchair or walker. Trips to an emergency room happened with regularity as she battled chronic knee and back pain, or her congestive heart failure symptoms became more apparent. I was unaware of dad's various fainting episodes on these trips until I read about them. My parents never wanted to worry Betty or me, so most of their medical issues during these years were their private secret.

As I progressed through the  nine years of trips I became aware of a few important messages I was receiving from mom a decade later. Obviously, that wasn't her intent, but that is what has happened. 

1) Certainly, of primary importance, is one's health. It was very clear that her enjoyment of traveling declined along with her strength, mobility and eyesight. The journal entries from 1994-1998 contain very few references to health problems. That began to change during a trip to Europe. Her limitations and their impact on my dad were obvious. As I read through the next few journals, there were:

...more references to her wheelchair or walker and how tough it made enjoying a trip

...memory lapses meant forgetting to bring essential items on a trip. 

...becoming tired and irritated at things that earlier she would have joked about

...trips being canceled at the last moment due to her health

...several trips to the emergency room and hospital stays while away from home along with a desire to get home to her regular doctor.

...Dad's fainting episodes.

2) Their long driving trips were recorded honestly as a mixture of boredom and joy, mundane activities and beautiful sights, bad meals and hard beds, or a good steak dinner and pleasant room at the end of a long day of driving.

In fact, as I started to make notes of what she had written it became clear that a good bed, a nice meal, a pretty sunset, a simple card game at the end of the day or sunshine after rain were enough to interrupt a gloomy narrative. Travel is no different than home life. It is a blend of good and bad, exciting and boring, uplifting and depressing. The trick is to notice life's small joys and blessings and dwell on them. 

3) Mom always over-packed. It was a rare trip that she didn't mention she had brought too many clothes for both of them. They did occasionally use the laundry facility in a hotel, but apparently were afraid of running out of clean clothes. So, they dragged around (or, rather dad dragged around) much more than they needed.

4) As she became more physically challenged, mom became more easily irritated and angry. To her credit, she didn't shy away from venting on these journal pages, though I doubt she considered that anyone else would ever see them. I would guess that her various limitations were increasingly frustrating to her. Never one to ask for help until she simply couldn't manage on her own, the closing in of her world made her more prone to lash out at things.

Besides seeing some sides of mom I wasn't aware existed, I did take away a reinforcement of a few important life lessons:

*Travel whenever and wherever you can while you are healthy enough to enjoy the experience. Soon enough, physical ailments will make trips more difficult and, eventually, unpleasant.

*Especially on longer trips don't expect every day to be great. Travel is just home life but in a different place. Accept the bad as part of the journey and relish the small stuff that can brighten an otherwise rotten day.

*Under-pack. No one cares (or will even notice) that you wore the same sweater and jeans three days this week. Don't spend time and energy lugging excessive belongings around. And, there are virtually no places you can't find a laundromat if needed.

*Fight the natural tendency to become an angry, crabby, old person. Not only doesn't anyone else want to be around you, but it brings you down, too. Getting angry at your declining health is pointless. Instead, get even: do all you want before that happens!

Thanks, mom. I found it fascinating get this glimpse into your life all those years ago. Even now, almost nine years after your passing, you are still teaching me lessons.

November 8, 2019

Medicare: What You Need To Know

We are in the midst of the annual Medicare enrollment period, a time when Medicare recipients can make changes to their coverage for a start date of January 1, 2020. Ending December 7th, this is the time each year when you are allowed to change from Medicare to a Medicare Advantage program, or back to traditional Medicare from an advantage plan. You can change from one supplemental policy or company to another, and change your Part D drug coverage. In case you had forgotten, the flood of junk mail over the past few weeks would have served as a strong reminder.

Does it pay to switch? Not always, but looking at options every year is a wise decision. Betty and I are switching to a different Part D coverage plan, for example. The one we have this year imposed a 100% rate increase...yep, double. Instead, we picked one that covers the drugs we take at the pharmacy we use at 50% less than this year's monthly premium. Just by spending 20 minutes on line, we saved nearly $1,000 in costs for next year.

So, this post has a dual purpose: urge you to do some comparison shopping, and for those approaching Medicare age, a brief review of what can be a complicated system.
 I am covering Medicare, not Medicaid which is an entirely different program. As with most federal programs and health insurance coverage, there are enough exemptions and differences to fill 20 posts. I will only attempt to explain the usual, most common situations.

Medicare is a federal program that pays for certain health-related expenses for people 65 and older (and younger in certain situations). While many costs are covered, an individual enrolled in Medicare is responsible for certain deducibles and copays. Some services are not covered at all and others for only a limited period of time.

There are four parts of Medicare:

Part A is hospital insurance. Copays, and deductibles will determine what you pay. Usually there is no premium for Part A.

Part B is medical insurance that helps pay for doctor visits, outpatient care, preventive health care, and equipment. There is a monthly premium for Part B.

Part C is better known as Medicare Advantage. This is coverage provided by Medicare approved private insurance companies.

Part D is prescription drug coverage. This is also run by Medicare-approved private insurance companies.

Most folks get Part A and Part B automatically. If you receive benefits from Social Security you will automatically get Part A & B coverage starting the first day of the month you turn 65.  If you aren't yet receiving Social Security (because you are still working for waiting until your full retirement age of 66) you must sign up 3 months before your 65th birthday to get Medicare coverage. In this case you will get a bill every three months to cover your Part B premium.

If you must sign up (as noted above) there is something called the Initial Enrollment Period which is the period from 3 moths before until 3 months after your 65th birthday. If you miss this window your benefits will be delayed.

If you decide to wait until after the Initial Enrollment Period, there is a general Enrollment Period during the first three months of each year. However, if you use this option, realize your part B premiums will be higher for the rest of your life.

If you are covered by a group health plan at your place of employment  and then want to start Medicare, there is another time period, called the Special Enrollment Period that generally allows you to avoid the higher premiums for late sign up.

With me so far?

Other Factors to Consider

Medicare does not pay 100% of most services. So-called Obamacare has put in place several free screening tests for those on Medicare, like colonoscopies and mammograms. The current political system keeps changing the parameters of what Medicare will or will not cover, so don't take what I am writing today as gospel truth for the future. Double-check your specific situations.

Most doctor visits, tests, drugs, and equipment are going to cost you money...usually something approaching 20% of the total, discounted rate. That's where Medigap coverage enters the picture. This is a policy, sold by a private insurance company, that acts as secondary coverage to Medicare. It pays what is left over after Medicare pays what it will. As a point of reference, our Medigap, or supplemental policy, has worked perfectly for the last several years. We have had to pay nothing for any service or procedure after Medicare and the supplemental policy have taken care of all charges.

Just like the rest of Medicare there is a specific enrollment period for Medigap coverage. You can buy any policy that is offered for sale in your state, regardless of your health status. The amount of supplemental coverage, the monthly cost, and any deductibles are different for each policy offered. You decide how much supplemental help you want and can afford. A word to the wise, though: if you decide to buy a less expensive policy at some point in the future from the same company it may be allowed to prevent you from doing so due to pre-existing conditions, at least for a period of time. 

Speaking of costs, Part A Medicare coverage costs you nothing since you already paid into the Medicare fund while you were working. Part B coverage does carry a monthly cost. For 2019 most have paid $135.50 per month. Higher income folks will pay more and the rate is likely to increase slightly next year.  There is also a $185 deductible. 

Part D prescription coverage costs vary depending on the plan you select and the level of drug coverage. Again, Obamacare has lowered the payments you must make when you enter the drug "donut hole." 

What is Covered?

There is no simple answer to that question. Medicare publishes a booklet that is an excellent resource. In general, here is what you can expect:

Part A pays part or all of inpatient hospital care, inpatient care at a skilled nursing facility, hospice care services, and home health care services for a defined period of time. As you might guess there are all sorts of qualifications and exclusions for this list but this is the primary purpose of Part A coverage.

Part B helps cover medically necessary services like doctor visits, outpatient care, durable medical equipment, and several preventive services and screenings.

Part C is the designation of Medicare-approved private insurance companies that has various coverage options and costs. You still have Part A and Part B coverage, but the specifics are likely to be different from original Medicare. Generally, coverage is more complete and the costs may be lower. But, that comes with network restrictions and gives the company the ability to deny coverage for certain procedures or tests.

Part D covers some of your prescription drug costs. If you don't need a lot of drugs now, it still may be wise to take this coverage because of late enrollment penalties. Part D is provided by private insurance companies and varies widely in costs and coverage. There are usually copays and deductibles involved. As my example above notes, rates can vary widely and change dramatically from year to year. 

Importantly, these items are not covered by Medicare (not a complete list...some of these services are covered by some Medicare Advantage Plans):
  • Routine Dental care
  • Dentures
  • Cosmetic surgery
  • Hearing Aids
  • Exams for fitting hearing aids
  • Long term care

If you'd like more detailed information or see if specific services are covered, this government website should be your first stop.

On a personal note, Medicare, along with a supplemental policy and Part D drug coverage, has been a blessing for us. While we are still spending close to $700 a month for premiums and prescriptions, the process is so simple: no paperwork, no claim forms, no hassle. Before both of us reached coverage age we were spending over $900 a month. Today I am sure we would be forced to pay almost double that for much poorer coverage through the private insurance market, if we weren't Medicare-qualified.

There are many advantages of turning 65, but one of the most cherished in Medicare coverage. It is a life-changer!

Questions? Feel free to ask. Comments? Feel free to type away!

November 4, 2019

Helping an Adult Child: Pitfalls and Positives

I have noticed a lot of web articles recently that deal with the issue of grown children and retirement. A descriptive phrase like "boomerang kids" is common. "Helicopter Parents" is usually used to explain overly involved parents during a child's educational career, but I guess it could fit here, too.

The adult child has to move back home due to a lost job, or medical condition. The grown child needs help to pay for additional education to reenter the job market. A divorce may mean that child brings along his or her own children when moving back home. This is not a rare occurrence. One survey I found showed that 44% of jobless 18 to 34 year-olds live with their parents. Almost 25% with jobs are still at home.

Some of the articles take a firm position As parents, you have already done your job. The grown child is on his own. The money saved for retirement is not going to be used to solve someone else's problems. Maybe a small loan here and there, but no full scale bailout. You are not going to become a full time babysitter for your grandkids. The house is no longer set up to handle an extra person, or two or three.

The flip side to that is your child needs your help and you are going to provide it. When you became a parent you believe your responsibility doesn't end after a certain age, regardless of the circumstances.  You do what you have to do to provide shelter and food, or money for an education or a car to get to work, or whatever. If your retirement savings take a hit, so be it. Family comes before your portfolio.

So, what do you do? Cut the cord and tell the robin to fly, or provide support, both emotional and financial, as long as needed? How much should your own future be adjusted for an adult child?

Here is another toughie. I received an e-mail from a fellow a month or so ago asking for feedback and ideas from readers on another adult child-parent issue. His youngest daughter was into her final year of  college. She had done her part by getting scholarships and taking on a rather sizable student loan. Even so, helping her with college tuition put mom and dad further behind each month. Saving for their own retirement had to be delayed and their own debts were increasing.

This couple is within a few years of retirement. They are worried that the financial hole they have dug for themselves means retirement may be just a dream. The fellow's question was a simple one: if you have committed yourself to doing what you must for a child, do you have to accept that retirement is not a likely scenario? Is working well into the future the only option? They willingly helped their daughter and are not interested in abandoning that promise. Yet, they wonder where they are headed.

These are not easy questions. Society continues to change, making the answers and solutions less obvious. When we were a rural society this type of problem rarely arose. Everyone stayed close to home or accepted that each family member was responsible for the well-being of the rest of the family regardless of age or circumstances. That model no longer exists for most of us. Multi-generational living is still the exception rather than the norm.

Do you have any experiences in this area to share? Can you give some solace to the parents who have put their own retirement in the deep freeze for their daughter? Do you have feelings about where and when the obligations of parents ends...if it does?  Would the door to your home and bank account be closed or open in a similar situation?

Are you helping or hurting a grown child if you provide support and lodging? How much enabling is too much? 

Toughies, I know.

October 31, 2019

Back To The Future

Still one of my favorite movies, Back to the Future, gave us a fun way to escape the mid 1980's and watch Marty McFly travel back to 1955 and almost mess up his own future and his very existence.

Recently I re-watched the movie (again!) and thought how much today's satisfying retirement could be described as going back in time to save our future. Most of us agree that retirement today is not at all like it was for our parents and grandparents. The concept of retiring did not exist until the Industrial Revolution and didn't become possible for many until Social Security was implemented in the 1930's.

For the period after World War II until the mid 1990's, retirement usually meant a decent company pension and medical coverage until death. It meant a safe and secure time after 30 or more years of working for one or two companies.

As we know this scenario began to show some cracks during the huge bust of 1997-2001. Many companies failed. Retirement plans were put in jeopardy. But, that upheaval was nothing like the 2007-2009 meltdown. The underpinning of millions of retirement accounts, pensions, and real estate holdings were wiped out. Massive financial failures brought us as close to another Great Depression as we have ever been.

Now, an economy that has been growing for almost a decade is starting to show some wear and tear. a recession isn't expected by most economists, but those are the same folks who missed the warning signs in 2007, so.....

Where does all this leave us in 2019? Do we have to go back to re-discover our future? Unlike Doc Brown and Marty we can't adjust a flux capacitor to change what happened to us. But, I can certainly look at how my family lived almost over a half century ago (wow, is that possible?) and see if there is anything that translates well to 2019.

A few memories spring to mind:

...Stuff can't replace relationships and the gift of time. My parents always made time for each boy and the family. Dad was always home for dinner and we ate together at least 5 nights a week. As I have noted in earlier posts dad was unemployed for various stretches of time during my youth. But, that never affected our family time.

We were not a family of shoppers. Mom did like to buy clothes, but overall we had a home uncluttered with things. When one of us boys wanted something there was almost always a waiting period. Once we were given a regular allowance, our own saving became part of the process. That taught us the importance of delayed gratification. 

The biggest gift our family received from each other was that of time and attention. Mom and dad were never too busy for us, as a family and as individuals. Sadly, that doesn't seem to be the case in too many families today.

...Waste not, want not. For most of their married life, my parents each held a job, raised three sons, and did it with just one car. We had a television set for over twenty years that was rather small, a little green in its color mix, and kind of tinny. Leftovers at least twice a week were normal. Clothes were replaced when we outgrew them or something become too worn to wear. Hand-me-downs were standard operating procedure.

We were a frugal family, sometimes by necessity, often by choice. The thought of throwing away food bought at the supermarket a week or two earlier just never happened. The idea of buying new clothes just because we could never entered our minds. Dad's 20 year old telephone answering machine sat on the desk until it finally quit recording on that little tape cassette. His first response was to get it fixed, not replace it. 

The reality is most of us have all we need to be happy and satisfied. Making do, re-purposing something, and using an item up before disposing of it makes as much sense today as it did in my family's home in 1959.

...The less clutter the less stress. Our home was rather minimal in its decorations and furnishings. We had the normal sofa, easy chairs, coffee table, dining room set and so on, but nothing "extra." Generally if something was in the house it had a function.

A console stereo set remained in the living room for at least 15 years after it quit working. It became a plant stand. I remember a rolling portable dishwasher that had to be hooked up to the kitchen faucet and plugged into a wall outlet to work. Well after built-in dishwashers were considered normal kitchen equipment we used this rolling monster because it still worked.

Mom was not fanatical about house cleaning so things stayed dusty for periods of time. Of course, this was well before men were expected or even encouraged to do "women's work" around the house so things were often less than spotless. Dad would have been glad to help out, but I'm pretty sure mom insisted that was her domain. This reality meant the fewer belongings the less cleaning to be performed. The fewer possessions the less stress to repair, replace, or upgrade.

In at least one instance going back would not be wise.  So, one trap I would avoid if I could go back to the future:

...Follow the crowd and lose yourself.  This time of American life was all about conformity. Television networks started showing the same entertainment to millions. Commercials told all of us what to buy to be happy and successful. We dressed the same and drove the same cars. Sexism, racism, and a very strong uneasiness around people who might be different were a part of daily life. Those problems continue today but at least aren't buried and shushed up like they were 60 years ago.

No one who wants a satisfying retirement today wants it to look like everyone else's. We realize retirement is an adventure we just can't wait to start. We aren't stopping anything, just moving to other passions and interests. Don't follow the crowd and find yourself is much more like it. Following the crowd and blending in is one part of the 1950's that none of us miss.

Sometimes it is good to remember our past. There were approaches and concepts that worked well then and still make sense. In other instances, the past should remain "past." 

Isn't the key to be able to tell the difference?