JustCare

Tag: Retirement

  • How you might find a part-time job after retirement

    How you might find a part-time job after retirement

    No matter how old you are, it’s easy to see the appeal of working part time. After retirement, part-time work can be rewarding financially, socially, physically and emotionally. Of course, what’s available depends upon your skills, your flexibility and your location. And, there’s no question that it is particularly hard for older adults to get part-time jobs. Workplace ageism is real. Here are a number of ways you might be able to find a part-time job after retirement, with some insights from Kerry Hannon at AARP.

    1. Work for yourself as a consultant and do what you know how to do or want to do as much or as little as you would like. To learn about potential job prospects, talk to your former bosses and colleagues. Or, join an association or club with members who do the kind of work you do or who have networks and leads for you. PatinaSolutions.com provides employment opportunities for people with 25 years of experience or more. And, HourlyNerd.com helps connect people with MBAs or graduate degrees to jobs.
    2. Be a caregiver. There are likely older people in your community living at home who need help with basic needs or simply companionship. Contact your local area agency on aging about these opportunities.
    3. Find a seasonal job. Schools might need substitute teachers during the school year. The National Park Service and tennis clubs generally need extra help during the summer months. Car services, delivery services and retailers may need extra drivers during the end-of-year holiday season. If you know how to prepare tax returns, you might find a job with H&R Block or another accounting firm between January and April 15. If you’d like to learn how to prepare a tax return, AARP trains volunteers to help lower-income older adults prepare their taxes. You can learn more at the AARP Foundation Tax-Aide.
    4. Work at home to help a company remotely. If you like working with kids, consider being an English as a second language tutor. Or, find your calling as an artisan, making accessories or home goods. You can put your work up for sale on sites like Etsy.com.
    5. Be a personal assistant on an hourly basis. Help schedule meetings, plan travel, file papers, handle insurance issues or care for pets. If you like the idea of caring for pets, let your local pet store know. Or, deliver flowers, prescription drugs and newspapers in your community.
    6. Become a marketer, and do direct sales. Many companies pay part-timers to work on their own schedule on a commission basis. Think Avon and Mary Kay. You might sell these products online to your social network or through house parties. AARP suggests contacting Direct Selling Association for information. It’s important to pick the company carefully so you work for a legitimate business and you well understand the company’s expectations and when and how much you will be paid. The Federal Trade Commission offers help at business.ftc.gov . You might also ask your local Chamber of Commerce about the company before you decide to work for it.

    Best ways to explore these and other opportunities: Post an ad on a community job board, LinkedIn, Facebook or Craiglist. Use your networks. Talk to friends and former work colleagues. Show up at events and meet people one on one. Talk to local business owners. Avoid using big job sites.

    Here’s more from Just Care:

  • Majority of House Democrats join the Expand Social Security Caucus

    Majority of House Democrats join the Expand Social Security Caucus

    More than 100 of 193 House Democrats as well as 18 Senate Democrats have joined the Expand Social Security Caucus. It currently has more than 150 members. These Democrats are committed to ensuring that a key part of the Democratic agenda in Congress is strengthening Social Security and increasing its benefits. 

    Alex Thompson reports for Vice that the majority support  for increasing Social Security benefits among House Democrats represents a major shift to the left for House Democratic members. It was not that long ago that House Democrats were fighting simply to keep Social Security from being cut. Indeed, in 2011, Barack Obama and many Democrats in Congress were willing to cut Social Security in exchange for tax hikes on the wealthy.

    Rep. John Larson (D-CT), who co-chairs the House side of the Expand Social Security Caucus, introduced a bill to expand Social Security in 2015.  It had only 54 cosponsors when it was introduced. Today, it has 174.  Larson may have power to take action on the bill as the most likely chair of the Social Security subcommittee of the House Ways and Means Committee, if Democrats take back control of Congress in November.

    The seven co-chairs of the caucus in the House and Senate represent a politically and geographically diverse group of Democrats. Debbie Dingell (D-MI), Terri A. Sewell (D-AL), Rep. Raúl Grijalva (D-AZ), and Rep. Conor Lamb (D-PA) co-chair the caucus with John Larson in the House. Elizabeth Warren and Bernie Sanders co-chair the Senate side of the Expand Social Security Caucus. Alex Lawson, Executive Director of Social Security Works, helped launch the caucus.

    Republicans in Congress continue to call for cuts to Social Security benefits. If the midterm elections leave them in control of the House, their budget will cut Social Security, Medicare and other critical social programs.

    As the divide between the wealthy and the less well off widens, and an increasing number of working class Americans are threatened with poverty in retirement, a large number of Democrats in Congress are supporting mainstream proposals that will help their constituents. Medicare for All and debt-free college are two other policy proposals that are gaining steam in Congress.

    If you want Congress to expand Social Security, please sign this petition.

    Here’s more from Just Care:

  • Minimizing broker commissions and protecting savings

    Minimizing broker commissions and protecting savings

    The New York Times reports on a family caregiver’s efforts to protect her mom’s savings in a retirement account.  The account, at JP Morgan, lost $100,000 over one month because of broker commissions. How do you minimize broker commissions and protect savings?

    Given how strong the economy has been, the caregiver could not understand how her mom’s account had lost $100,000. She looked at her mom’s statements and spoke with the broker. She discovered that JP Morgan had earned about 10 percent in commissions over the course of one year, $128,000 on $1.3 million in savings.

    Every time the broker sold stocks and other investments, he made a commission. And, he made literally 344 trades in one month on behalf of the caregiver’s mom, at his own initiative. JP Morgan reported that the mom had requested all these trades on her own, which was not the case.

    In fact, the mom had discussed with her broker selling a single stock if she needed additional cash. Her broker sold that stock but in eight trades in one day, instead of a single one, for which he received eight commissions and not one, And, he kept some of her stocks in a margin account, which she had never authorized.

    Once her daughter uncovered these excessive commissions, the broker reduced the commissions some. But, her mom still paid 3.8 percent on her JP Morgan investments for the year, about four times more than most people pay. The daughter ended up settling with JP Morgan for an undisclosed amount, JP Morgan did not fire the broker.

    Regrettably, the Trump administration and Republicans in Congress overturned the federal regulation requiring brokers handling retirement accounts to act as fiduciaries. This means that brokers and others who manage retirement accounts can act on their own behalf; clients’ financial interests do not come first.

    Before investing your money with a broker, discuss the commission structure. It generally should not be more than one percent of your savings each year. If you have investments at a bank, keep in mind that your broker is not required to act in your best interest. Make sure that your broker is not making trades without your permission. Also, make sure that any authorized trades are done in one fell swoop to minimize the broker’s commission.

    Here’s more from Just Care:

  • To reduce risk of bankruptcy, plan ahead for retirement

    To reduce risk of bankruptcy, plan ahead for retirement

    A new survey by the Consumer Bankruptcy project reveals that a growing number of older adults find themselves unable to pay for their basic necessities. As the social safety net shrinks, retirees are being forced to choose between their prescription drugs and their mortgage payments. Improving and expanding Medicare to cover everyone would allow everyone to get the care they need.  Without Medicare for all, to reduce the risk of bankruptcy, Americans need all the more to plan ahead for retirement

    Researchers found that retirees today are three times more likely to file for bankruptcy than retirees 27 years ago. Today, 3.6 older adults between 65 and 74, out of every 1,000, file for bankruptcy. In 1991, 1.2 people between 65 and 74, out of 1,000, filed for bankruptcy.

    Older adults also represent a greater proportion of people who file for bankruptcy. Today, almost one in eight people who file for bankruptcy (12.2 percent) are older adults. Back in 1991, only one in fifty people who filed for bankruptcy (2.1 percent) were older adults.

    Unlike retirees in 1991, whose employers were likely  to provide financially for them in retirement, retirees today are less likely to be able to depend on pensions. They are also less likely to have adequate savings to cover far higher health care costs. About one in four people over 65 have liquid savings of $3,260. The typical person over 65 has $60,600 in liquid savings.

    About three out of five older adults said that high medical expenses played a role in their bankruptcy. Out-of-pocket health care costs with Medicare average over $5,000 a year; people with the costliest complex conditions typically spend over $20,000 out of pocket. Two out of three older adults attribute their bankruptcies to a reduction in their income.

    People’s incomes pre-retirement and in retirement are not what they used to be. New retirement savings programs, such as 401(k) plans and IRAs, do not offer the same generous annual incomes that defined benefit plans–which provide guaranteed annual income–once did. Moreover, retirees today need to wait two years longer, until 67, for full Social Security benefits, than retirees in the past. And, their out-of-pocket costs have grown substantially.

    Older adults have few places to turn for help. They struggle to get a job to pay unexpected bills. Two jobs are hard to come by. So, too often they end up in bankruptcy court. What’s all the more concerning is that, for every older adult who ends up in bankruptcy court, there are several others nearing bankruptcy, in financial distress.

    Here’s more from Just Care:

  • Health care costs in retirement average $140,000

    Health care costs in retirement average $140,000

    Arielle O’Shea reports in Forbes that a couple who retires this year should expect to spend $280,000 on health care costs over the rest of their lifetime. Put differently, individual out-of-pocket health care costs in retirement now average $140,000. Not only is the amount extraordinary, but people’s 401(k) savings typically will not even cover their full health care costs.

    A person’s average 401(k) savings is $102,900, not even three-quarters (73.5 percent) of the estimated amount they will need to pay for health care in retirement. To help with retirement expenses, some people are pushing back their retirement date. The Employee Benefits Research Institute says that nearly one in four Americans are now saying they will not retire until age 70. A later retirement means lower health care expenses, more earned income and, usually, more earnings on your savings.

    That said, more than half of people surveyed by Fidelity Investments (56 percent) said that they had retired earlier than expected. If you retire before 65, you will likely have higher health care costs.

    Forbes advises that it is never too soon to plan ahead for health care costs and find ways to lower them. You should question your doctors’ orders and ensure you are not getting costly tests you do not need. Doctors are known to overprescribe tests and medicines. Always make sure you need the services and prescription drugs your doctor is recommending. You should find out whether you can change your diet and behavior to avoid taking prescription drugs.

    Also make sure that the doctors you see are in your health plan’s network.  If you are enrolled in traditional Medicare, you should not have to worry. Almost all doctors take Medicare. But, to keep costs down, you should make sure your doctors take assignment–that means that they accept Medicare’s approved rate as payment in full. If you are enrolled in a Medicare Advantage plan, you need to confirm you are seeing network doctors, especially if you are hospitalized. Many doctors in in-network hospitals who treat you may be out of network. And, make sure that any tests are sent to an in-network lab.

    Find out which preventive care services Medicare covers and talk to your doctor about whether you need them. Check out what the US Preventive Services Task Force has to say about them as well. Some tests may not be recommended. Keep in mind that your doctor may not know about Medicare-covered preventive services.

    If you have questions, Medicare offers free state health insurance assistance programs or SHIPs in every state. The SHIPs can guide you to free local resources and help you navigate Medicare.

    You might also want to have a written financial plan so you are best able to budget for your needs.
    Here’s more from Just Care:
  • Rescuing retirement with Social Security plus

    Rescuing retirement with Social Security plus

    In an article for Politico, Jacob Hacker lays out his vision for rescuing retirement–universal private retirement savings that become a defined benefit upon retirement, an annuity paid by Social Security –“Social Security Plus”–on top of Social Security benefits.  How much would this help working people in retirement?

    Hacker explains that as a result of flawed social policies over the last 25 years, government and businesses have laid tremendous economic risk onto working people and their families. Among other things, unions have lost their influence, companies have been less caring of their workers. As a result, people are at risk in their jobs, their health, their education and their shelter.

    Hacker describes this change as the Great Risk Shift. And, he says retirees have been hit particularly hard. No longer do most retirees have a defined pension. At best, if they are lucky, they might have a defined pot of money that can get wiped out by a market crash, which does not guarantee them set benefits. On top of that Social Security benefits have shrunk as a percent of retiree income from 50 percent at the end of the 20th century to 40 percent in the next several years.

    Today, it is projected that the majority of young workers will not be able to continue to live as they have while working when they retire. For that they need about 70 percent of pre-retirement income. In 1983, less than a third of them were at risk of not maintaining their standard of living in retirement.

    Inadequate retirement savings hurts retirees as well as the US economy. And, according to Hacker, the solution needs to be a resetting of the risk, not an admonition to people to save more. People need to be in a situation where they can save more automatically. They also need government protection of these savings, just as the government does with Social Security.

    Hacker has a plan, which includes these two smart solutions. Instead of the government subsidizing the retirement savings for the wealthy to the tune of some $200 billion a year through tax-deferred accounts such as 401(k) plans, the government should take that money to encourage retiree savings for people with lower incomes. He further suggests that Congress should expand Social Security by raising or removing the cap on payroll contributions and requiring contributions on investment income.

    Hacker also argues that Social Security benefits should be higher for vulnerable populations. And, rather than raising the retirement age, which hurts low-wage workers in particular, we should allow people to retire early but offer greater benefits if they can delay retirement.

    Hacker then makes the case that 401(k) savings plans should be universal. All workers should be able to take advantage of them. Today many are not. Hacker wants to require everyone to contribute to 401(k) plans to help ensure people save enough, with some opt out rights. But, his plan as described in Politico does not take into account that many, if not most, working people do not have any disposable income to spare.

    Hacker recommends that the $200 billion that subsidizes retiree savings of wealthy people today to go to match savings of lower-wage individuals. But, if these individuals cannot afford to save, his plan is of no help to them. Moreover, to the extent workers are able to save, 401(k) fees can eat into retiree savings significantly.

    To protect worker savings as much as possible, Hacker argues that 401(k) and IRA investments should be in low-cost index funds. On top of that, Hacker proposes turning these retiree savings into a defined benefit plan upon retirement, with guaranteed monthly income for life–essentially an annuity paid by Social Security–“Social Security Plus.” Hacker says that “We should make [Social Security Plus] the model for a transformed private system that actually provides retirement security.

    The unanswered question is how will this plan help the millions of workers who cannot afford to put money into a 401(k) plan? Removing the cap on Social Security contributions and allowing people to invest more money in Social Security in order to enhance their Social Security benefits seem like simpler and more compelling solutions for improving retirement security.

  • Help for caregivers who leave their jobs

    Help for caregivers who leave their jobs

    Millions of caregivers leave their jobs to care for a loved one at some time in their careers.  Not only do they lose their income in the process, they stop paying into Social Security and may see lower Social Security benefits when they retire. So, on May 30, 2017, Senator Chris Murphy reintroduced a bill to provide these caregivers additional retirement benefits, the Social Security Caregiver Credit Act. He originally introduced the bill on March 18, 2016.

    An estimated 65 million people leave their jobs entirely or significantly reduce their work hours in order to care for someone they love. And, by some accounts, they forego an average of $300,000 in lost wages, pension benefits and Social Security benefits when they do so jeopardizing their retirement security. Women are most affected.

    The credit would be based on a sliding scale of income tied to past earnings with a cap, for up to five years of caregiving. Anyone caring for a family member–parent, child, sibling, spouse, domestic partner, aunt, uncle, grandparent–who needs help with activities of daily living would qualify for the credit, so long as they were caregiving a minimum of 80 hours a month.

    Senator Murphy argues that supporting caregivers will save the government money.  People being cared for in their homes will not need nursing home care, which Medicaid often pays for.  Bernie Sanders is co-sponsoring the bill in the Senate. And, Congresswoman Nita Lowey introduced a companion bill in the Senate.

    If passed, this bill would expand Social Security and improve the lives of many older adults in retirement. It would end the penalty on people who put their family first to care for them. It would be particularly helpful in increasing women’s income in retirement and reducing the income gap between men and women.

    People would be able to claim the credit–based on a sliding scale–for up to 60 months. And, it would phase out when the caregiver earns more than the average national wage.

    These organizations have all endorsed Senator Murphy’s bill: The National Council on Aging, The National Organization for Women, The National Alliance for Caregiving, The Sibling Leadership Network, The National Association of Area Agencies on Aging, Social Security Works, Autism Speaks, Latinos for a Secure Retirement, Puget Sound Advocates for Retirement Action, The Arc of the United States, and Washington State Senior Citizens’ Lobby.

    Here’s more information from Just Care:

  • Who’s most likely to retire early?

    Who’s most likely to retire early?

    Some people are lucky enough to choose to retire early because they have adequate savings and retirement income. Most people have little choice and depend heavily on Social Security. A September 2015 paper published by the Center for Retirement Research uses the Health and Retirement Study to determine the key factors that lead people to retire before they plan to retire. The researchers find that sometimes it’s health, sometimes it’s employment type, sometimes family, and sometimes finances.

    Who’s most likely to retire early?

    • Health is the biggest impetus for people to retire early. People in poor health or whose health is deteriorating are far more likely to retire earlier than others.
    • People with retiree health coverage in poor health are a bit more likely to retire earlier than others. It’s not clear whether the ACA is also an impetus for people in poor health to retire earlier than they would otherwise.
    • People who lose their jobs or whose spouses retire earlier than planned, or who become caregivers of their parents are a lot more likely to retire earlier than others.

    Who’s less likely to retire early?

    • People who are able to move easily from one job to another are less likely to retire early when the jobs they are able to move into require less stress and less time or lead to a higher income than their previous jobs.
    • Changes in people’s income and savings do not play a significant role in people’s retirement earlier than planned.

    Time magazine reports that people who work in a range of labor intensive and stressful jobs tend to retire earlier than others. The Time article lists the 50 professions in which people retire by the time they are 65. Fewer than half of one percent of emergency medical technicians and paramedics, sheet metal works and logisticians retire after the age of 65. People in the food processing profession, financial analysts, logisticians and physician assistants also almost all retire before age 66.

    Here’s more from Just Care:

  • John Oliver: Be careful about how you save for retirement

    John Oliver: Be careful about how you save for retirement

    In a recent Last Week Tonight segment on retirement plans, John Oliver warns that we need to be careful about how you save for retirement. “Financial advisors” may not know any more than you about how to invest retirement dollars. In addition, their advice may be based on the size of the commission they will receive and not on your best interests. (You can find Just Care’s advice on whether to trust your retirement advisor here.)

    Keep in mind that people can call themselves financial advisors or give themselves other fancy titles without having any special expertise. People with titles such as “financial advisor,” “financial analyst,” “investment consultant” may have little understanding of the financial markets. So, it’s important to find out a bit about their training; you might also ask for client references.

    As important, find out if they are working as your fiduciary and acting in your best interest. As we explained in an earlier post, many of these financial advisors work on commission and have no fiduciary duty to you. You may not be able to trust them. They can put their own interests ahead of yours unless they are fiduciaries. If they are not your fiduciary, they may be recommending investments because they generate high commissions for them. These investments may not be smart ones for you. (This should change thanks to a new law that will go fully into effect in 2018.)

    Also, if your advisor is recommending you invest in annuities, beware. Advisors can make very large fees from annuities. Again, find out more about the fee structure and your projected returns. Oliver explains that in addition to commissions, brokers selling annuities often get free cruises and luxury watches. They may be good for the broker, but they may not be in your interest.

    Oliver calls 401(K) plans a “gold mine” for financial services companies. They can get a host of fees from these investments including legal fees, trustee fees, transactional fees, finders fees, bookkeeping fees. While 2 percent in fees may not sound like much, that money you’ve given in fees compounds over time, and you could be out a lot of retirement savings.

    Oliver says that most managed funds do not do better than the market and many perform worse after fees.

    Here’s Oliver’s advice on saving for retirement:

    1. Start saving now
    2. Probably invest in low-cost index funds and then leave your investment alone
    3. Make sure your advisor is a fiduciary
    4. As you get older, gradually switch more of your stocks into bonds
    5. Try to keep your fees under 1 percent; each one-tenth of one percent you pay in fees amounts to a lot of money you will not have in retirement

  • Expand Social Security, don’t means test it

    Expand Social Security, don’t means test it

    Ever since a few weeks ago, when President Obama joined with Bernie Sanders, Hillary Clinton, Elizabeth Warren, Social Security Works and a growing league of policy makers and policy experts calling to expand Social Security, opponents have been pushing back as hard as they can; they want to keep Social Security benefits low; many want to “means test” it and turn it into a welfare program. Make no mistake, expanding Social Security promotes retirement security; means testing Social Security puts it at risk.

    Social Security, like Medicare, are earned benefits, not charity programs. They allocate funds equitably, with most benefits going to lower income individuals. The vast majority of Social Security benefits (75 percent) go to individuals with annual incomes of less than $20,000. And, more than 90 percent of benefits go to people with annual incomes under $50,000.

    Very little Social Security funding goes to the wealthiest Americans. Dean Baker and Hye Jin Rho at the Center for Economic and Policy Research calculated that just 2.3 percent of Social Security benefits go to individuals with incomes of $100,000 and up, and only 0.6 percent of benefits go to individuals with incomes of $200,000 and up.

    Reducing or eliminating Social Security benefits for people of wealthier means–“means testing” Social Security–may sound reasonable in theory, but it would save almost no money if it applied only to the wealthiest Americans. Because so few retirees earn more than $50,000 a year (half have incomes under $24,150), means testing benefits would only create real savings if people earning $30,000 a year saw their benefits fall. And, that would jeopardize retirement security for middle-income earners.

    Moreover, Social Security is an insurance program designed to benefit everyone who contributes in it, not a need-based program. As with life insurance, everyone paying in receives benefits, regardless of income. We don’t means test access to public schools because we want to benefit the collective, deliver opportunity to all. Similarly, we don’t means test Social Security because it is a public good that helps deliver financial security.

    Social Security gains its strength from being inclusive and protecting everyone who pays in “against the hazards and vicissitudes of life,” as Franklin D. Roosevelt posited. A progressive tax system is a better way to ensure that everyone contributes their fair share, not means testing.

    To generate larger Social Security reserves, it makes sense to lift the cap on Social Security contributions so that wealthier Americans pay into Social Security throughout the course of the year, as the overwhelming number of Americans already do, not to cut their benefits.

    If opponents of Social Security expansion genuinely want the wealthiest Americans to benefit less from the government, why don’t they support lifting the cap on contributions into Social Security and/or having them contribute to Social Security after they pass and before their heirs benefit from their estate tax exemption? And, why aren’t they calling for means-testing 401(K) contributions or the large housing subsidy we offer homeowners through tax deductions?

    To read more about why means testing is a bad idea, click here. Click here to read Dean Baker’s latest piece on Robert Samuelson’s attack on Social Security.

    Here’s more from Just Care: