ShAARP Session: Observations from AARP

There is plenty of useful information for you in the Wall Street Journal's online "Ask Encore" page from this weekend. First, AARP provides the answer to a reader's question on reverse mortgages: why aren't the interest charges and fees on reverse mortgages tax deductible? According to the answer from AARP, it's because with a reverse mortgage, the "actual payment" doesn't happen until the borrower sells their home or dies - so the borrower cannot claim a tax deduction until that point. Check out the page - the WSJ also tackles questions this week on Roth IRAs and inheritances.

From CNNMoney.com today, there is an article bringing a "little-noticed" proposal to light - one that would set aside $8 million for states to help protect seniors who are buying complex investment products. States would get money to investigate and prosecute fraud against seniors and would target annuities, which are "contracts in which customers pay a lump sum upfront in exchange for monthly income over time." Read the article on CNNMoney for all the lowdown.

Finally - one more story from the WSJ. This one focuses on the "Medicare maze" and directs you to tools that can help you figure out what coverage is best for you. Some of the tools cost money while others are free, and the article points you to AARP's Doughnut Hole Calculator to figure out if a drug plan will leave you in the "doughnut hole" gap in coverage.

Have you started your holiday shopping? I have - only because my budgeting technique this year is to spread out my gift buying! There's an interesting article on AdWeek's Web site this morning called "Don't Count on Grandma this Xmas" that cites an AARP Bulletin poll on spending this holiday season.

The survey conducted among AARP members showed that 34% of those 50 and up expect to spend less on the holidays than they did last year - and only 5% expect to spend more this year. Forty-nine of those respondents said that they would eliminate spending by "buying fewer gifts." What are you doing this holiday season to save money?

Another story worth checking out is this one from the Los Angeles Times today that discusses a topic we brought up yesterday - paid sick time. The article tells a familiar story about Americans who feel they are being forced to work sick - because if they didn't, they would lose pay and even face disciplinary action. The article says that because of the recession, a whopping 84% of workers felt pressured to come to work even if they were sick. Congress is planning to consider legislation next week that would guarantee workers paid sick days.

Yesterday, AARP's Director of Financial Security, Jean Stetzfand, was featured in a segment NPR's "Tell Me More" program. Stetzfand is discussing the issue of older workers and unemployment - a topic that is gaining more and more exposure in the media recently, and obviously one that is important to AARP and its members. Read the transcript or listen to the segment here.

Stetzfand discusses the fact that workers over age 55 spend more time looking for work, possibly because employers see older workers' skills are "out of date," forcing job seekers to "reinvent themselves," which can prove to be a daunting challenge. So - "Why not just retire?" the host asks. Stetzfand explains that many Americans just aren't financially prepared for retirement. Give the story a listen to see what she has to say about how retiring at different ages affects your income.

In other financial security news today, on the ABC News website, David McPherson writes a column about Roth IRAs - what he calls "one of the best defenses against potential future increases in federal and state income taxes." Are Roth IRAs right for you? Individuals can convert current retirement savings into Roth IRAs, or can start an account and make yearly contributions. See what McPherson has to say for the nitty gritty that might help you determine what's best for the future of your retirement savings.

In an AdWeek article posted yesterday, the author takes a look at Americans' financial unpreparedness for retirement, especially in these tough economic times. The story reports on a study from the Center for Retirement Research at Boston College called "The National Retirement Risk Index: After the Crash."

Other studies are showing that younger generations are taking notice - and therefore taking steps to make sure they are doing a better job of saving in pre-retirement years. A report from AARP is mentioned - one that shows that 49 percent of 45-64-year-olds are not confident that they "will have enough money to take care of your medical and living expenses in retirement." Do you fall into that category? What steps are you taking to make sure you do have enough money throughout retirement?

AARP's David Certner is also quoted in the AdWeek article. He talks about how Americans are working past retirement age - but are facing obstacles along the way, like age discrimination. He also points out that this recession could change people's saving behavior for good, especially if the economy continues to be "muddled" for a number of years.

Pedestrian Safety
Another study making waves today is one from Transportation for America, a national transportation coalition, that lists the safest and most dangerous cities for pedestrians. AARP's Elinor Ginzler is mentioned in several articles - because pedestrians age 65 and older are particularly vulnerable to accidents. Check out a few of the stories about the study: Washington Post; AFP; Christian Science Monitor; and Miami Herald.

AARP Magazine has a great piece about the financial complexities involving new marriages later in life.

Often by middle age, many folks have houses, mortgages, children, debt and a ton of other financial expenses that need to be taken into account if new relationships are formed. The magazine not only talks about these difficulties but takes an actual couple planning to get married and gives us a step by step (and video) giving us an idea of how we can handle our finances when marriages result in merges of expenses.

Have your own question about money? You can also ask the experts in the magazine's Money Makeover series.

Posted today in USA Today's Opinion section was an op-ed by AARP's John Rother on insurance companies engaging in age discrimination by charging higher premiums to seniors than they charge younger consumers.

In his article, John says:

"This discriminatory practice is a key reason why 13% of older Americans (or 7.1 million) were uninsured in 2007, a figure that is growing rapidly.

Many other older Americans are so burdened by the high cost of their premiums that they avoid health care treatments that would require them to spend more out of their own pockets."

You can check out his view and the "opposing view" and decide what you think!

One more interesting (but definitely complicated) article to leave you with before the weekend is this one from MSNBC - it gets into all the technical, dirty details of how you can still go about retiring early.

Have a great weekend.

A short but noteworthy article is on WSJ.com today - and it is a nice bit of news for those of us, young and old, still socking away money each paycheck in our 401(k)s. It says that "about half" the companies that suspended their matching benefit are "quietly" planning to match a portion of their employees 401(k) contributions. Check out the story for all the details.

Another story worth checking out today is in Newsweek - it's called "Un-Retiring." The story says that with "bigger than expected bills and smaller than expected nest eggs," workers between 55 and 70 expect to keep working until they are 70, and those already over 66 say they expect to work until they are 76. Check out the story for some resources on the best way to re-enter the job market if you're an older worker. Of course, the story points out AARP's list of 50 Best Employers for Workers Over 50. Check that out too!

All this older worker talk reminds me of an interesting post on WalletPop.com from yesterday...It says that more than half of the babies born in industrialized countries after the year 2000 will live to be 100. Great news, right? But it took this story to make me really think about the financial consequences of a longer lifespan. Check it out for yourself to see how the game changes when you life to be 100. AARP's John Rother is featured!

The Wall Street Journal had several great articles over the weekend on a few very pertinent topics for baby boomers. See them below.

The first one is a very informative article about employee-driven 401(k) plans. For the past 30 years, the investing industry has been "experimenting" with employees taking the lead on their retirement savings, but now, employers are taking the wheel, automatically investing their employees in retirement savings accounts. The article says that by having employers do the automatic investing, they help workers save enough in time for retirement and improve their diversification. Do you think the automatic enrollment is a good idea? Of course, workers can opt out if they choose...but according to the WSJ article, they "rarely do."

Another article is an entertaining (and maybe inspirational!) one about retirees who have literally made their dream come true: they've turned their hobbies into careers. We're all looking for ways to make extra money these days, and they've found fun ways to do it. But don't be fooled - it's still work. Check out the story.

Here is one that does the work in determining which financial services programs will work for you in figuring out whether your savings are going to last you through retirement. Many companies are trying to tap the baby boomer market by offering services at little to no cost to you...but read this article before you decide who to use!

Finally, check out this great story about ReServe Elder Service Inc., an organization you might want to get to know - they work to set up retirees with non-profits who can use their skills and pay them for their time. The program is in New York, but it's expanding!

There is a great Q&A style article on CNNMoney.com today that addresses concerns of older Americans who were looking to retire, but like many in the country, don't have the same amount of certainty in their financial stability that they once had. The author touches on going back to work (but does that make sense when the rest of America is looking for work, too?) and social security eligibility. Check it out if you're looking to retire early...or already have and are second-guessing your choice.

A Longevity Effort

You may have heard about the "Vitality Project," an initiative that was put together by AARP and Blue Zones, a healthy living organization...but if not (and even if so!) read this really cool story from Minnesota Public Radio yesterday about Albert Lea, a little town in Minnesota that has been the subject of a longevity effort.

Kids are walking over a mile to school instead of hopping on the bus, and that's just one of the little things the citizens of Albert Lea are doing to improve their well-being. Focusing on their physical environment, and making little changes, such as choosing a salad instead of French fries, is key to the project, and it sure seems Albert Lea is embracing the change! They are an inspiration to us all. J

On Friday, this great article about AARP's health insurance options was featured on CBS Money Watch. The article takes an in-depth look at AARP's range of health insurance plans and what they mean for you, in terms of deductibles, preventative care and more.

The author, Bob Trebilcock, says: "After talking to nearly a dozen experts and comparing quotes from more than 50 companies, here's our conclusion: AARP health policies, while rarely the least expensive, are competitive, and might be the best plan for you if you have health problems." Check out the story for the low-down on all things AARP health insurance.

If you're looking for tips on your finances in this tough economic climate, check out this story that appeared in the L.A. Times this weekend, "How to Be Your Own Financial Planner." There is advice on budgeting, retirement planning and spending, taxes and more.

In health care reform news - the Senate Finance Committee is scheduled to vote on the "Baucus bill" tomorrow - we'll be keeping tabs!

Have a great Monday.

Martha Hamilton has a piece up at AARP Bulletin about the dilemma that millions of Social Security recipients are facing for 2010: not only will there be no Social Security cost-of-living adjustments, but a hike in Medicare premiums that will leave them in a serious financial bind. The good news is that Congress is taking action.

Tricia Neuman and Juliette Cubanski of the Kaiser Foundation also have a really useful brief on the issue, explaining the relationship between the Social Security COLA and the Medicare Part B premium, and what's at stake for those covered by both programs. Check that out for a good background on the issue, and Hamilton's piece on what is being proposed to help the situation, at least temporarily - the House just passed by a measure that would freeze Part B premiums for the coming year (and the Senate will likely to follow). But another problem is also weighing; others may see a reduction in their SS checks due to Part D premiums.

In short, there is much to be done to ensure Social Security recipients aren't left out in the cold. Let's just hope the work pays off.

These days, everyone's talking about how to save money. But living simpler isn't just good for your wallet - it's good for the environment, too. You might not get your "flowers" at the dollar store like this guy, but we can all agree a little composting helps the landfills and the bank account.

Watch below:

Via Brandweek, a new study (commissioned by TV Land) Generation Buy: A Close Look at the Boomer Consumer shows that boomers are outspending other generational cohorts by a wide, wide margin.

The study found that consumers between ages 40 and 59 spend more on themselves each month than millennials and Gen Xers. But the buck hardly stops there: Gen Buy thrives on multigenerational purchases, and spends more than twice as much as younger consumers on others. The study, fielded by OTX, included a sample of 4,000 adults ages 18-65 nationwide.

For instance, Gen Buy spent more than three times the amount of money per month on spouses ($514) than adults under 40 ($169), nearly twice as much on kids ($295 vs. $158) and three times as much on teen children ($494 vs. $136).

New survey out today that says boomers are feeling the pinch of the sluggish economy. 81% of Americans 45 plus say the economy is in fairly bad or very bad condition. Even more upsetting, one in ten is borrowing to pay everyday expenses and more than a third of them are helping their children pay bills.

For boomers (45-64) almost a quarter are prematurely taking money out of their 401(k)s and other investments. For those 65 plus, almost six out of 10 are having a harder time paying for food, gas and medicine.

This is tough news for the state of the economy. But it may be even tougher for politicians. Almost three-in-four (74%) say their elected officials are not doing enough to help people caught in the economic squeeze. Sounds like a warning to me.