Tag Archives: social security

Caregiver’s Golden Years, Between a Rock and a Hard Place

November 5, 2017 by
Photography by Bill Sitzmann

When Franklin Delano Roosevelt presented America with the Second New Deal, he created a national social safety net to prevent vulnerable senior citizens from dying in poverty.

Social Security came into being with the Social Security Act of 1935. Thirty years later, the federal safety net further expanded with the creation of Medicare and Medicaid during the presidency of Lyndon Johnson.

The system evolved to assist not only the elderly (with Medicare focusing on citizens aged 65 and older), but also the disabled and impoverished of all ages (with Medicaid), to become as self-sustaining and independent as possible.

Fast forward to the 21st century. Ever since 2010, President Barak Obama’s Affordable Care Act (aka “Obamacare”) dramatically widened the nation’s social safety net. In the first year of Donald Trump’s presidency, Republican efforts to undo and repeal the Affordable Care Act sparked concerns that 22 million Americans (according to the Congressional Budget Office) would lose their access to affordable health insurance.

With Republican control of the White House, House of Representatives, and Senate, the federal safety net seemed all but certain to shrink.

The Congressional Budget Office—tasked with determining how much any given piece of legislation will cost (or save) to implement, including reductions in tax revenue—concluded in a March 13 report that the American Health Care Act of 2017, popularly known as “Trumpcare,” would: “reduce federal deficits by $337 billion over the 2017-2026 period” with the largest savings coming “from reductions in outlays for Medicaid” and from elimination of Affordable Care Act “subsidies for non-group health insurance.”

While much of the 2017 health care debates have focused on repealing Obamacare, 74-year-old Marge Koley (of Bellevue) exists at the crux of Medicaid and Medicare. Koley is one of the many senior caregivers who attend to younger, disabled relatives.

She and her husband rely on the earned benefits of Social Security and Medicare, benefits that have made it possible for them to enjoy their golden years without working.

Watching the media spectacle unfold, Koley was most afraid for their 37-year-old daughter, Jenny, who has Down syndrome. Jenny qualifies for Social Security Disability Insurance, Medicare and Medicaid for health insurance, and receives support services to live and work independently through Medicaid and Nebraska Health and Human Services.

“Jenny has always had the dream of having her own apartment and living as independently as possible,” Koley says, speaking with Omaha Magazine in July on the eve of the so-called “skinny repeal,” the last ditch effort to repeal Obamacare by the Senate.

“What will happen to Jenny after I am not here to care for her?” she says. “That is my greatest fear. She has one sibling in Indiana. If the proposed caps and cuts in Medicaid are enacted, she could lose the services she needs to live and be part of the community. Also lost are the years of progress allowing people with disabilities to decide for themselves where they want to live and with whom. We may have for-profit insurance companies running programs and deciding the fate of our children. Will institutional living return? Will the waitlists continue to grow and grow?”

Jenny moved into her own place in September 2016; meanwhile, Koley still provides most of her transportation needs. Medicaid service providers take care of residential support and job coaching.

“Jenny currently works nine hours a week at the Ollie Webb Center,” Koley says, obviously proud of what her daughter has been able to accomplish with some compassionate assistance. “Jenny loves being responsible for herself, and now cleans her apartment and does her wash on her own without prompting, and has been able to decrease her outside support. Now, she has someone one day a week to help work on cooking, going out into the community.”

The current political environment is a source of anxiety for Koley, who says she has never before seen the American public so polarized.

“This is the most divisive political climate I have ever experienced. Neither side will listen to the other’s views,” Koley says, adding that if she had a chance to talk to lawmakers, her message for them is to save Medicaid. “I want them to save Medicaid and to get a full understanding of the consequences of their actions. Budgets should not be balanced on the backs of people with disabilities who are least able to defend themselves.”

Efforts to repeal the Affordable Care Act—for the time being—came to a screeching halt with the pivotal thumbs-down vote from Republican Sen. John McCain of Arizona, who flew to Washington D.C. for the vote shortly after being diagnosed with an aggressive form of brain cancer.

Months after the failure of the “skinny repeal,” in the week following the failure of another repeal attempt (the Graham-Cassidy Bill), Koley experienced a sense of temporary relief.

“I’m very happy that it did fail, knowing how it would affect Jenny,” she says. “But I know politicians will be revisiting this, and we’ll need to gear up again to defend Medicaid benefits at a later time.”

Visit olliewebbinc.org to learn more about the Medicaid service provider that plays a crucial role in the lives of Marge and Jenny Koley.

From left: Marge and Jenny Koley

This article was printed in the November/December 2017 issue of Omaha Magazine.

Retirement Planning To-Do

I know a doctor who is thinking about retirement. He’s not overly concerned about his future. But his retirement is five years away.

The No. 1 factor, in my opinion, affecting anyone’s retirement savings is inflation. Inflation is relatively tame at the time of this writing, but it can still be harmful—even if you plan to retire in five years. So, here’s what I suggest:

1. Don’t quit on stocks. “To achieve returns to sustain a 30-year retirement, you need to still be investing for growth,” states Money magazine in its “Retirement Guide 2013” series published last October. If stocks make you nervous, then finding a way around that concern could be difficult. According to Bankrate.com, one-year CDs offer a 0.76% pre-tax yield. Money market accounts pay 0.49% per year. Yields on two-year U.S. Treasury bonds are even worse: 25%. (Figures through November 13, 2012.) You’d lose out to inflation if all you had in your portfolio were low-yielding investments. So, if you’re near retirement, based on your risk tolerance time horizon, I’d likely recommended a stock investment allocation of 30-40%.

2. Wait before taking Social Security. In general, most individuals should delay receiving their Social Security benefits. Money states that your payments can be 76% higher if you begin taking them at age 70 instead of at age 62. “Your payment will increase by about 6% a year for every year you delay filing before your full retirement age (between age 66 and 67 for most folks),” Money claims. “After that, holding off earns you another 8% a year until age 70.” Of course, your decision as to when to retire is a personal one. What’s best depends on a number of factors, such as your current cash needs, your health and family longevity, whether you plan to work in retirement, whether you have other retirement income sources, your anticipated future financial needs and obligations, and, of course, the amount of your future Social Security benefit. See Publication No. 05-10147, “When To Start Receiving Retirement Benefits,” at socialsecurity.gov to learn more.

3. Consider taking spousal benefit Social Security income early. Assuming your spouse is 62 and has been the lower income earner, and you are 62, you could file for benefits and postpone collecting them until you turn 70. Your spouse can begin collecting 50% of your benefit right now. See “Retirement Planner: Benefits For You As A Spouse” at at socialsecurity.gov.

4. Plan your retirement health care. If you retire before Medicare kicks in at 65, you could have a big expense ahead. “For a 62-year-old couple with one spouse in ill health,” states Money, “premiums run up to $2,300 a month on the individual market.” Ask your financial planner about bringing in a health insurance specialist, or look for an independent agent at nahu.org. Check with your company’s human resources department. You may be able to buy health care coverage when you retire. Remember that long-term care insurance will run about $4,000 a year for a couple in their early 60s, states Money. But if your assets total more than $1.5 million, I say pay for your long-term care as you go.

5. Line up some income. Want to consult? Now’s the time to gather clients and stay abreast of your field. You could also buy an annuity, which is a contract between you and an insurance company that pays out income and is designed for retirement purposes. Finally, practice living within your retirement income budget today. Doing so grounds your retirement planning in reality.

Jerome “Joe” P. Bonnett, Jr., CFP®, ChFC®, is an Independent Wealth Manager and President of Bonnett Wealth Management, Omaha. He is a 1987 graduate of the University of Nebraska with a bachelor’s degree in business administration, finance, and banking. He is a Registered Representative of Securities America, Inc. Member FINRA/SIPC. Bonnett resides in Omaha with his wife, Susan (Engdahl), and their two children, Jake and Claire. Bonnett Wealth Management and Securities America companies are unaffiliated.