What Millennials Don’t Know About Social Security

When the US federal government established its social insurance program on August 14, 1935, its purpose was to provide retirement, disability, and survivors’ benefits. Since that time, in part due to the disappearance of extended family networks, an increase in population, and a profound increase in life expectancy, it has become challenging for the Social Security Administration (SSA) to maintain the benefits promised to Americans.

According to a Transamerica survey, 80 percent of Millennials (born between 1979 and 2000) do not think they will receive any Social Security benefits at all. This apprehension comes as no surprise because for decades Americans have been saying that the Social Security benefits system is going to go broke. Millennials may be right to be skeptical about receiving benefits three and four decades hence, and the program does have problems but is not going broke, yet.

By its admission, the Social Security Administration reports that the Old-age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund are scheduled to be depleted in the year 2034 if Congress doesn’t act. However, there is another source of income for Social Security benefits. Even in the absence of both SSA Trusts, hundreds of billions of dollars in payroll taxes will still be collected and billions in benefits will still be paid. Even if Congress did not intervene to address the current challenges, the system would still be able to pay 77 percent of projected benefits beyond the year 2034.

Because of the bipartisan support the Social Security program receives and influential lobbies including the very powerful American Association of Retired Persons (AARP), it is highly probable that Congress will intervene to strengthen Social Security’s finances. Millennials’ uncertainty about the program’s solvency may lead to poor decision making regarding their retirement savings and plan. It is never too early to start looking at the basic tenets of when you will be able to retire successfully. Just because Millennia consider the future of Social Security benefits as tenuous, it should not deter them from saving money, investing, and reviewing and updating plans as circumstances change.

The average Social Security benefit is currently slightly less than 1,500 dollars a month. To successfully use the financial planners 4 percent rule would require a savings of 400,000 dollars to generate a similar income to the average Social Security benefit. Projections by the Urban Institute estimate that Millennials will receive about one million dollars for a single adult of average-income and 2 million for a couple.

Maybe the good news about Millennials’ skepticism about the solvency of Social Security is their interest in starting retirement savings planning earlier than the generations before them. Millennials who are saving are beginning around 24 years old and with good reason. Pensions in the private work sector are becoming increasingly rare, employers may go out of business, and job-hopping is much more common among younger American workers, which can easily lead to errors in income reporting.

All Americans should create an account on the Social Security Administration’s website, which allows you to check your earnings records and have errors corrected. Even checking every three years is good enough to know that your Social Security benefits will track accurately based on your income. Before ever claiming your benefits, be sure to employ one of many software tools that educate you about claiming strategies for Social Security. Millions of Americans make the mistake of taking their benefits too early, which locks them into permanently reduced payments. The financial incentives the SSA provides for delaying when you take your benefits can net you up to 250,000 dollars more. Benefits currently increase between 7 to 8 percent for every year you delay after the age of 62, capping at maximum benefits at the age of 70.

Millennials are expecting their prime source of retirement money to come from self-funded financial vehicles like a 401(k), IRA, and other savings and investments and ultimately that is a good thing. There isn’t such a thing as “too much money” in retirement, so additional sources of income beyond Social Security benefits is an excellent strategy. The social contract the federal government made for, and funded by its citizens, in all likelihood will be there for the Millennial Generation but no one knows the future. With 18 percent of Millennials expecting to live to 100 years of age or more getting information and advice about how to achieve retirement goals is more important than ever before.

If you have any questions or need guidance in your planning or planning for a loved one, please don’t hesitate to contact our Norman, Oklahoma office by calling (405) 241-5994.

American Seniors Facing New Debt Crisis

America experienced its worst financial crisis since the great depression between 2007 and 2010. Known as the subprime mortgage crisis, it happened because home prices fell in 2006, triggering loan defaults. Then the risk spread into pension funds, mutual funds, and corporations who owned the derivatives. It also spread into the global credit market resulting in higher interest rates and reduced availability of credit. Quantitative easing was necessary for several years to lower interest rates and spur economic growth. The cautionary tale to all Americans was learning to live beneath their means and do not carry excessive amounts of debt. Many Americans did not take heed and as a result, they are in substantial debt. One of the saddest cases of all of the debtors is the senior in their 60s and 70s in retirement years, and generally on a fixed income.

According to marketwatch.com, the current financial debt crisis among seniors is worse today than it was in the earlier 2000s. First-quarter debt in the year 2019 among seniors in their 60s was 2.17 trillion dollars according to data from the Federal Reserve Bank of New York. That is almost 1 trillion dollars more than quarterly numbers being reported in 2008 just after the start of the great recession. Senior Americans in their 70s are experiencing double the collective household debt than in the late 2000s. Second-quarter 2019 debt is 1.16 trillion dollars comparative to the .54 trillion dollars of 11 years ago. While younger Americans are also experiencing debt, those numbers are more consistent or even lower than the quarterly obligations reported during the spring of 2008.

Mortgages account for the majority of household debt across all age groups with older Americans, aged 40 and beyond, typically holding the most debt. The trend of a home equity line of credit (HELOC) is highest among those in their 50s and 60s. In essence, a HELOC functions like a second mortgage based on the current value of the home. A HELOC is not the same as a reverse mortgage which requires no repayment of the loan until the sale of the house. Surprisingly even student debt accounts for over one-fifth of household debt for Americans in their 50s. Americans’ penchant for not saving and overspending is sabotaging many a retirement.

It is tempting to want to help a family member (usually adult children) by lending or cosigning a loan for education, a car, or home. However, this action can put you in great financial peril. Let that family member learn their fiscal responsibility rather than putting yours in jeopardy. Younger people have more time to rebound from an adverse economic situation. Those Americans in their 60s and 70s who are already retired and living on fixed incomes can experience crippling life events when carrying unpayable debt.

Remember that buying on credit increases the price of what you purchase. Within the credit card industry people who pay off credit cards in full every month are known as “dead beats.” Why? The lender can’t make any money off of the loan unless your payment is less than the full balance due. The lender makes the most money when you make the minimum payment and the lender can tack on interest to the debt. This is a negative debt cycle for the borrower.

Financial advisers will caution seniors to retire with as little debt as possible. If there is a real need to obtain cash or enter into debt, do not act rashly. Fixes like a payday loan will cost you a lot of money in the long run. It is much better to work with reliable professionals and lenders and create a realistic repayment schedule that works within your budget. If a reasonable loan cannot be struck, then look for ways to avoid needing the loan at all. The best question to ask about going into debt is, “Is this a want, or is this a need?”

We can help you work through how to handle existing or future debt as part of your overall legal plan. It does not take long for debt to pile up and destroy the hopes for a successful retirement. Contact our Norman, Oklahoma office by calling (405) 241-5994 today and schedule an appointment to discuss how we can help you with your planning.

Alzheimer's Disease

Bad Financial Decisions May Be a Sign of Dementia

Diminishing brain function due to the onset of dementia can lead to the destruction of your financial well-being. If you are age 50 or older, easy access to your financial assets like stocks and bonds, checking and savings accounts, money market accounts, and other assets can lead to loss of these funds if an unauthorized person gains access to them, or if they are mismanaged. Family members are often unaware their loved one needs help before the unintentionally mismanaged assets, now gone, bring about devastating consequences for both the person living with dementia as well as their family. The Alzheimer’s Association reports that from diagnosis to death, Alzheimer’s disease (AD) care will cost an average of $424,000 per individual, and 70 percent of that cost is out of pocket expenses to the family system of the affected loved one.

It is common to have AD symptoms long before an official medical diagnosis. Difficulty managing money is one of the first signs of Alzheimer’s disease. To spot problems early, look for the warning signs of ill-advised financial transactions through oversight. Unopened or unpaid household bills, overspending on credit cards and making just minimum payments on the debt, falling prey to frauds and scams, and not paying attention to more significant investments that constitute the bulk of a person’s wealth are all indicators of mental decline. As a whole, the situation is very concerning as the poor financial outcomes that asset spending brings about are also happening at a time when expenditures to pay for increasing caregiving needs for dementia becomes extensive.

Projections are that by 2050, the prevalence of Alzheimer’s will triple in the US. Those individuals suffering from AD who do not have personal or family financial support will most likely become a beneficiary of the US Medicaid program. Total Medicaid spending in the fiscal year 2018 was 593 billion dollars. The federal government paid 62.5 percent, and the states paid 37.5 percent of the budget. Research statistics data from the Centers for Medicare and Medicaid Services (CMS) are projecting that, under current law, from 2018 – 2027 national health spending will be nearly 6 trillion dollars with a substantial portion of that going to underfunded seniors living with dementia.

One of the best ways to protect your finances from the unintended consequence of mismanagement due to cognitive impairment is to accept that this problem exists, and there is a need to put systems in place for financial oversight long before mental decline sets it. Meet with an elder law attorney to put the legal documents in place, allowing for power of attorney, financial control, medical power of attorney, as well as a dementia directive, as early as your 50th decade. You may also allow a trusted adult family member, friend, or financial advisor to review your monthly spending habits and bill paying.  If there is a noted error in your financial judgment or a lapse in your standard financial operating procedures, they can call it to your attention well before all of your money is gone.

Alzheimer's Disease Facts

Alzheimer’s Association

According to the Alzheimer’s Association, only 16 percent of seniors regularly receive cognitive assessments in their annual medical exams. Keep yourself from becoming vulnerable by protecting your liquid assets and your net worth with provisions for financial oversight. The safety net you put in place today can protect your finances and even be an indicator that you require testing for cognitive problems. Currently, there is no solution to the problem of Alzheimer’s disease and other forms of dementia however; there are systems you can put in place to protect yourself financially. It is best to prepare for the possibility that you may develop cognitive problems and have protections in place rather than unwittingly put yourself in financial jeopardy.

If you have any questions or need guidance in your planning for yourself or a loved one, please don’t hesitate to contact our Norman office by calling (405) 241-5994.

elder abuse

How to Address Abuse in Senior Living

If you have an elderly family member or friend living in an assisted living or skilled nursing facility, it is imperative that you stay attuned to the signs of abuse to your loved one. The National Center on Elder Abuse reports the most common types of abuse include physical (29%), psychological (21%), gross neglect (14%), financial exploitation (14%), and sexual abuse (7%). While the facility’s staff perpetrates the majority of these abuse cases, 22 percent of cases are a result of resident on resident abuse. However, these statistics reveal only part of the story.

While abuse of senior residents is not the norm, according to McKnight’s Senior Living, it is a persistent and pervasive problem. Federal and State lawmakers are emphasizing the role of regulations and public policy to identify and decrease the abuse of residents while continuing to improve care quality. Once a comprehensive set of US standards for care are established, facility owners and employers will have to adhere to the best practices as outlined in order to be in compliance and eliminate resident abuse.

Besides elder abuse being a persistent and systemic problem, it is also an under-reported one. Because it is under-reported, statistical data integrity is suspect. Typically, the resident who encounters abuse is 65 years or more, and the vast majority of those who are especially at risk exhibit moderate cognitive impairment or are living with dementia. Because of their medical conditions, these seniors are often unable to communicate about or report the abuse they experience, and so it continues unabated and without consequence.

To address the abuse problem requires a multi-pronged strategy. Raising awareness of abuse and educating family members, caregivers, and managers to look for signs of abuse every day with every resident is crucial. Knowing the signs of neglect and abuse include skin tears, multiple fractures or long bone fractures as well as a resident’s inability to explain bruises. Bruising of the chest, breasts or genital regions, a sexually transmitted disease, bloody discharge, and unusually stained underwear are signs of sexual abuse. Medical neglect or abuse manifests itself both physically and psychologically. Symptoms include a resident’s poor hygiene, unintended weight loss, and dehydration. Other symptoms are marked by suspicious wounds, and poor case management of medical conditions, unmonitored prescription medications, depression, anxiety, and social withdrawal.

Certification and licensing verification, as well as criminal background checks, should be mandatory before hiring employees or volunteers to work with residents. Those individuals found guilty of any form of abuse or who have disciplinary action against their professional license should not be considered for hire. All qualified new hires should be trained on the facility’s abuse prevention policy before working with residents, and continuing education about abuse should be mandatory.

Training should encompass all aspects of potential resident abuse, mistreatment, and neglect for all staff and volunteers. Topics to cover should consist of ways to identify those residents at risk, recognizing the signs of abuse, how to properly report the violation without fear of reprisal, and understanding the Resident Bill of Rights. Staff should be trained on how to respond appropriately to difficult resident behaviors and recognize symptoms of caregiver burnout in themselves or other staff members.

Prevention policy should cover a range of procedures. Before a resident moves in, there should be an assessment made about their potential vulnerabilities. Continuing evaluations and documentation of any resident changes should be routine. Appraisals should include a review of the facility’s physical environment, number of residents, and requirements as to the risks of guarding against admitting a predatory offender as a resident. All of these preventative strategies are guided by specific Federal, State, and statutory requirements.

Reporting and response time are critical when abuse is alleged particularly in the case of serious bodily injury. Generally, most State laws and statutory requirements deem that within two hours of such an abuse a report must be filed. If abuse is not alleged and there is no evident serious bodily harm, the general rule is that it should be written up within 24 hours. Reports are filed with the facility’s executive director, state authorities, and law enforcement. Families should always be notified of allegations of or signs of abuse.

By employing these prevention techniques, focusing on policies and procedures as well as ongoing educational training, senior care residences can become a living environment where resident abuse is an unlikely event. Managing abuse risk is a significant factor in successful senior living. If your loved one is in a senior living facility, be sure to understand their vulnerabilities and the policies and procedures in place to prevent abuse.

If you have questions or would like to talk about your situation, please don’t hesitate to contact our Norman, Oklahoma office by calling (405) 241-5994.

LGBTQ Couple

Important Estate Planning Considerations for LGBTQ Couples

Everyone needs estate planning. Regardless of your age, race, gender, or sexual orientation, properly protecting your future and your loved ones requires a plan. For LGBTQ couples, there are a few things you should consider when thinking about crafting an estate plan. Each couple is unique, and it is our goal to ensure that your personal wishes are carried out and that no one else is dictating what should happen with your money, property, or children.

Existing Estate Planning

If you have already had estate planning documents prepared, you should review them periodically. If your estate planning documents were signed prior to 2015, it is crucial to have a qualified estate planning attorney review them, as same-sex marriage is now recognized in all fifty states. This recognition could open up new planning opportunities that may not have been available to you in prior years if you and your partner are now married.

Marriage

As previously mentioned, with same-sex marriage recognized in all fifty states, now is an opportunity to decide, if you are not married already, whether you and your partner should tie the knot. While there are a lot of emotions behind marriage, there are also estate planning and tax considerations. Depending on your situation, we can sit down and make sure that your estate plan is drafted in such a way that ensures all of your wishes—emotional or financial—will be carried out.

Children

If you have biological or adopted children, you will need to name someone to take care of them should something happen to you. This is especially important if your partner is not the children’s legal parent. Without the proper appointment, the court could end up placing your children with someone you would not have chosen. Alternatively, if you would like to provide for your partner’s children, but you have not adopted them, you will need to make sure that your will or trust specifically states what you would like the children to receive since they would not be entitled to anything otherwise.

Your “Family”

Absent estate planning executed by you, state law will fill in the gaps by defaulting to your spouse or blood relatives. For some unmarried individuals, these could be the last individuals you want acting on your behalf or receiving your money and property. If you and your partner are not married and do not plan to get married, you will need to make sure that your estate planning specifically appoints them to the roles (e.g., personal representative, trustee, agent under a power of attorney, or patient advocate under a medical power of attorney) you want them to have and designates what your partner is to receive at your death. If you have good friends that you consider to be your family or causes that are close to your heart, you will need to have an executed estate plan to protect and provide for your true “family,” whether or not they are blood relatives.

Reducing Conflict

Additionally, if you are estranged from your family, proper planning can ensure that they will have little or no involvement in your affairs after your death, reducing the possibility of contests. This can be done by using a trust to distribute your money and property so that there is no court involvement and only those named in the trust have access to the necessary information, by explicitly stating in your will which family members are to receive nothing and by including no-contest provisions in your documents.

We are here to help you navigate this sensitive issue. Estate planning can provide you with the peace of mind that comes with knowing that your wishes will be carried out in the way you want after you are gone. Please give us a call so we can schedule an appointment to get you on the path toward protecting your loved ones.

Aging Could Be Better Living with Multiple Generations

Master plans for inter-generational community living models are changing the shape of the aging experience from the ages of 8 up to 80 years of age and beyond. Dubbed “new urbanism” it is the belief that a living environment with high standards can have a positive effect on the quality of life, local economy, and public health. The goal of new urbanism for older adults is the offering of an active lifestyle enhanced by a vibrant and bustling community composed of varying ages and ethnicities. This can help keep the brains of aging adults more agile as they challenge themselves to socialize with new people of all ages, backgrounds, and world views.

Inter-generational living is similar to multi-generational homes, just on a larger scale. Many of today’s older Americans want to maintain a connection to their community at large; offering their life experiences, knowledge, wisdom, and skill sets that can enhance lives for people of all ages. While living in a multi-generational home provides the same opportunity, the scale and needs of the people change when it is opened up to those outside of a nuclear family system. While some aging Americans prefer a retirement community of similarly aged people, many older adults are finding increased vitality and quality of life mixing with children, teens, young adults, and middle-aged people. Many aging adults prefer the stimulation of being associated with a non-homogenous group, and with their life expectancies increasing and overall health levels improving these inter-generational communities are becoming a popular lifestyle solution.

Decades ago, these types of multi-generational homes and communities would have been the norm. The Pew Research Center has reported that in the 1900s, fully 57 percent of Americans 65 and over lived with their children, grandchildren, and other family members. Communities were highly integrated into everyday life. However, the post World War II era ushered in an increase in education and loans to buy homes and start businesses. The opportunities scattered many families across the US in search of building a more prosperous life. By 1990 another Pew Research report found that only 17 percent of those 65 and older lived with their families. Now, nearly in 2020, the downward trend is reversing due to several reasons.

Immigration is one factor that explains the trend reversal. It is very commonplace around the world that multi-generational family systems live together and communities are very integrated. Longer life expectancy and the cost of continuing care retirement communities and long term care are other reasons families seek to live together. A delayed marriage pattern of younger people, as well as “boomerang” youth, are other reasons for the pattern reversal. Many children coming out of college have student loans and often wind up moving back in with parents or grandparents until they can get out of debt.

Inter-generational communities are not complex to build. Thoughtful designs of parks where park benches face each other to encourage conversation, dog walking parks, festivals, live music, art programs and more are just some of the uncomplicated techniques that help break down barriers between different age groups of people and help aging adults stay vital and integrated into life. Older Americans can experience reduced depression and loneliness, better mental stimulation, more daily activities, and can build relationships that will help them learn to rely on others, as others learn to rely on them.

Tasks like grocery shopping can be simplified if an older adult provides a shopping list to a younger community member and watches over their children while groceries can be obtained for both the younger family and the older adult. Oversight by community developers can create programs that encourage this sort of “bartering” of tasks because just plunking people in the same physical space does not necessarily build connections.

Building these inter-personal partnerships in an inter-generational community will help older adults continue to age in place and rely on community rather than a big bank account to pay for much of the help they might need. While many people opt for aging in place at the age of 50, some are interested enough in this movement of new urbanism and its many benefits, committing to the process in their thirties.

Nobody wants to have to leave their lifelong home because of aging. Many seniors are finding every day to be an adventure with never a dull moment living in inter-generational communities. Aging Americans can lead fuller and happier lives by staying invested in the process of being connected to all ages.

If you need help planning for your future or the future of a loved one, please get in touch with our Norman, Oklahoma office by clicking here to send us a message or by calling us at (405) 241-5994.

hearing loss

Surprising Health Side Effects of Hearing Loss

The findings from a 10-year study by the Journal of the American Medical Association (JAMA) have reported a link between hearing loss and health risks. The risks include a 50% greater risk of dementia, a 40% greater risk of developing depression and a nearly 30% higher risk of accidental falls. While hearing loss is becoming more prevalent in younger people due to the use of earbuds and noise pollution, it is the elderly population who are more quickly and significantly affected by adverse health risks because of their hearing loss.

There is a wide range of reasons that account for hearing loss. Some are genetic while others include noise exposure, medications, head injuries, and infections. While hearing loss is a frustrating experience for those who have it, along with their loved ones, the worst option is to ignore the condition. The sooner your hearing is tested, the better your ability to proactively save yourself from associated health risks due to hearing loss. According to Johns Hopkins University, brain scans indicate that loss of hearing has even been associated with more rapid rates of brain atrophy.

One of the first symptoms of hearing loss is trouble detecting high-pitched or soft sounds. This form of hearing loss is associated with stereocilia, which is the damaging of the fragile hair cells that convert sound waves into electrical signals your brain can understand. For example, high-pitched sounds might include children’s voices while soft sounds include phone conversations or background noise in a restaurant. If you are having any trouble hearing these softer or high-pitched sounds, make an audiologist appointment for a hearing assessment to get a baseline reading. Loss of hearing contributes to social isolation and the longer you wait to address hearing loss, the greater the risk of cognition problems. Meaning, you may hear the words but not be able to process their meaning.

Other than cost, there is no downside to hearing aids anymore. They are discreet, easy to learn how to use, and professionally adjustable over time to compensate for increased hearing loss. Once you factor in the cost of a potential fall, increased risk of dementia, social isolation and depression, the cost of a hearing aid is comparatively minimal. If your hearing loss is profound already, there are cochlear implants, which are devices implanted into the inner ear to stimulate the auditory nerve. These devices can help to restore sound perception in adults with more extreme hearing loss. Your walking motor skills are dependent upon your hearing to pick up subtle cues that help you maintain your balance. Hearing loss mutes these critical cues and makes your brain work harder to pick up sounds, which can then interfere with some of the mental processes needed for safe walking.

While it is not yet proven that treating hearing loss can prevent dementia, unintended falls, or social isolation and depression, it is important to investigate as more than two-thirds of adults over the age of 70 have significant hearing loss that can impact their everyday quality of life. Older adults with hearing problems left untreated also incur substantially higher overall costs of health care. At the ten-year mark of untreated hearing loss in an older adults, the incidence of hospitalization increases by 50% or so. There are also higher rates of hospital readmission and an increased likelihood for emergency room visits when compared to those elderly adults without hearing loss.

Communication between patient and health care provider is also problematic for those adults with hearing loss. A patient has less participation in their health care plan and can often become confused as to their diagnosis and possible courses of action for treatment.  Also, following instructions post appointment or hospital discharge can be problematic. Costs associated with untreated hearing loss have prompted both health care companies and insurers to find better ways to serve patients with hearing loss.

Nearly 27 million Americans age 50 or more have hearing loss while only one in seven uses a hearing aid or implant device. Hearing is often the most overlooked of the five human senses: taste, sight, touch, smell, and sound. Your ability to hear is incredibly important and the longer you put off addressing a hearing problem, the greater the possibility of associated adverse health events. Make good hearing part of your overall plan to age successfully. Like retirement planning and elder law planning, the sooner you address the issue, the better the outcome will be.

Contact our office today by calling (405) 241-5994 and schedule an appointment to discuss how we can help you with your planning or planning for a loved one.

Government

Is the Government’s COLA Tool Flawed?

A non-partisan advocacy group called The Senior Citizens League (TSCL) has a new analysis that asserts the federal government measuring tool to calculate the Cost-of-Living Adjustment (COLA) is flawed. The decrease in social security benefit monies that are paid to seniors is eroding their financial protection against rising costs. Changes in the COLA is tethered to the Consumer Price Index for Urban Wage Earners and Clerical Workers Index (CPI-W), which determines the inflation rate for a basket of goods and services from one year to the next, affecting more than 64 million beneficiaries next year. The Bureau of Labor Statistics (BLS) has released its annual CPI-W data from Quarter 3 since 1975, providing the final inflation number needed by the Social Security Administration (SSA) to calculate a given year’s COLA.

The CPI-W has eight major spending categories, each with its subcategories, which receive a weighting to establish the movement in price, thus determining inflation costs.

Seniors and groups that represent senior interests note that the CPI-W does a terrible job representing the actual increase in the cost of living that aging Americans face. The spending habits of urban wage earners and clerical workers, most of whom are younger than 62, hardly represent the expenditure of those seniors 62 or more.

In December of 2011, the Bureau of Labor Statistics did a comparison using the CPI-W and the more experimental CPI-E, or Consumer Price Index for the Elderly. The CPI-E, as the name implies, accounts for the spending habits of those Americans age 62 and older. What the BLS found was profoundly notable. CPI-E medical spending was twice that of the CPI-W, and senior housing costs were also markedly higher. Concerning medical care and housing, the CPI-W regularly underweights the most critical inflationary expenditure categories of seniors. Higher weighted categories of the CPI-W are in areas such as education, food, and apparel.

With minimal and sometimes no increases in COLA over the past decade (2010, 2011, and 2016 due to deflation), seniors have felt the strain of medical and housing costs severely. Even the 2 percent COLA increase of 2018 was eaten up for many seniors by increases in Medicare Part B premiums. Senior purchasing power has declined over the past decade due to low or no COLAs based on flawed projections for the elderly using the CPI-W. A social security policy analyst with TSCL, Mary Johnson, ran the numbers and found that the purchasing power of the social security dollar in real terms has declined by 18 percent in the past ten years. That is real money to many American seniors who are on a fixed income. The Senior Citizens League is recommending the government pass a permanent COLA of 3 percent as the lowest threshold to protect elderly retirement savings and help keep seniors out of poverty.

The truth about social security benefits is many rules tweak your payout. One set of regulations calculates your baseline retirement benefit; while another set of rules defines how that number will change depending on the age you choose to take your benefits. Still, other government controls will determine whether or not you will receive a cost-of-living increase or not and what percent that COLA will be.

Congress agrees there is a need to change how COLAs are calculated to reflect senior spending habits with greater accuracy. Congress, however, disagrees as to how to achieve the goal. The purchasing power protection mechanism of the COLA is most beneficial for seniors when there is data integrity in its calculation. Consumer price indexes that reflect senior (age 62 or more) purchasing habits and needs will allow for proper weighting of all categories and subcategories that the BLS reviews. The CPI-W has consistently come up short regarding data that reflects senior spending in the medical and housing categories. This truth is unsurprising as the CPI-W accounts for only about 29% of the US population most of whom are far younger than 62. There needs to be a political process to change COLA calculations to protect the real purchasing power of senior social security benefits.

If you need help with your personal planning or planning for a loved one, please don’t hesitate to reach us at our Norman office by clicking here to send us a message or by dialing us at (405) 241-5994.

Elderly couple sitting on a bench.

Making Sure Your Wishes Are Carried Out

The importance of making end of life preparations cannot be stressed enough. Many put off making these plans thinking there is always time. The sad reality is that none of us are guaranteed time. Others may be bothered by the thought of death itself and allow this to paralyze them when it comes to making plans and getting their affairs in order for the end of life. However, most of these same people have wishes and thoughts about where and to whom their assets are distributed. Many of them also have ideas about what they do and do not wish to have happen when their life ends. Lack of preparation and planning means that these wishes likely will not be honored. In addition, it causes additional strain and stress on the people who are left to sort out the affairs. An example of this is the story of Debbie.

Debbie was a teacher who had been retired for several years. She was aging alone. She never married and had no family around. She did have a small circle of friends. After retirement, Debbie’s health progressively declined and she had more and more difficulty caring for herself. After a few years, Debbie passed away in her home.

Previously, she had conversations with a handful of her friends telling them her wishes for the possessions and assets she had. Because of these conversations, these friends each thought she had made the proper preparations to ensure these wishes would be followed. Unfortunately, Debbie had none of the necessary end of life documents that would allow her wishes to be followed. Her friends were left to try to piece together a puzzle that only many missing pieces. Her burial was prolonged and what she did have after paying expenses to settle the estate and bury her will not end up where Debbie wanted. This scenario can, however, be avoided.

If you or your elderly loved one have not made end of life preparations, make time to do so as quickly as possible. An elder law attorney can help guide you in what you should be doing, and can make sure the proper documents are in place to carry out your wishes regarding your health, care you want (or don’t want) to receive, and who should receive your money and possessions.

The first key document to be sure you have is a will or a living trust. A will allows you to specify where your money and possessions should go upon your passing. It also allows you to choose an executor of the estate. The executor will take care of managing the estate, paying debts, and distributing property as specified. A will only takes effect upon your death.

A living trust does everything a will can do but also allows you to choose someone to manage your assets if you become incapacitated because it is effective during your lifetime. A living trust also provides privacy, as it is not subject to court proceedings that become open to the public like a will is. There are numerous other advantages to a living trust that can be explored with the help of an attorney.

A living will and health care power of attorney are two additional documents that take effect while you are alive. A living will specifies your wishes for end-of-life medical care. For example, you can specify whether you want to be kept alive by artificial means if you are in a terminal state. A health care power of attorney provides for someone to make health care decisions for you, in case you aren’t able to make decisions yourself.  Both of these documents outline your wishes about medical treatment and care when you can’t make them for yourself, so it’s important to seek legal guidance to make sure these documents are drafted properly.

A financial power of attorney should be in the plan as well. A financial power of attorney names an agent to handle your finances in the event you are no longer able to.  An agent can open and close bank accounts, write checks, and sell property if you choose to allow them the authority to do so. Like the health care power of attorney, the financial power of attorney should be created with legal advice to make sure your wishes regarding your finances are properly documented.

Having an estate plan is necessary for you to have a say in what happens if you become sick and cannot make decisions for yourself, and to determine what happens with your money and your belongings after death. An estate plan also helps those who are left to deal with the estate to do so in a more simple and straightforward manner.

If you have any questions about something you have read or would like additional information, please feel free to contact our Norman, Oklahoma offices by clicking here to send us a message, or call us at (405) 241-5994.

Probate: Top 3 Tips for Executors

Your loved one has passed away. Now you find out they named you as Executor of the Will. In what is already a stressful time, a million thoughts pop into your head. How long will the probate take? Am I facing any legal liability? Can I receive payment for my services? Here are the top 3 tips for Executors:

Err on the Side of Disclosure

The Oklahoma Probate Code requires the Executor to give notice of any hearings. To whom should the Executor give notice? The Executor must mail copies of the notice of hearing to all heirs-at-law as well as beneficiaries named in the Will. However, in the interest of avoiding Will contests and Estate disputes, we advise our clients to go a step further. Oftentimes, dissension during the probate process boils down to family members being kept in the dark. Therefore, we advise our client to readily disclose information about the Estate upon request.

Deal with Taxes and Creditors

Before the Executor can close an Estate, he or she must file the decedent’s final individual income tax return. In addition, Oklahoma’s probate laws  require the Executor to publish a Notice to Creditors. Both of these steps are extremely important. If the Executor distributes the Estate without filing the taxes, then the Executor can be personally liable for paying them. Likewise, creditors may try to pursue the heirs individually if the Executor does not deal with their claims in probate.

Keep Track of All Expenses

The Executor must submit a final accounting to the court prior to receiving a discharge from their duties. For this reason, the Executor should document all expenditures incurred throughout the probate. What’s more, the Executor is entitled to compensation for serving in that role. The Executor’s fee is based on the size of the Estate.

In conclusion, probate is never a fun experience. Yet, by exercising full disclosure, handling taxes and creditor claims and detailing expenses, the Executor can make his or her job must easier. If you are in charge of an Estate and need help, do not hesitate to give our office a call.

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