Help With Retirement Budgets

If you’re budgeting for retirement, helping family members with college savings or weighing the value of a reverse mortgage, spend some time with these resources, all published recently:

Health Expenses

One of the largest, and trickiest, items to budget for in retirement is health care. You can find some good numbers—and a bit of good news—on the website of the Washington-based Employee Benefit Research Institute.

In a study published in October, the group reported that savings targets for health-insurance premiums and out-of-pocket health-care expenses in retirement were 2% to 10% smaller in 2014 than in 2013, depending on savers’ prescription-drug needs and how certain they wanted to be that they could cover health-care costs. (The primary reason for the lower targets: slowing growth nationwide in health-care spending.)

Of course, the targets are still sizable: Assuming median prescription-drug expenses throughout retirement, a man who turned 65 in 2014 needed $64,000 in accumulated savings and a woman $83,000 to have a 50% chance of covering medical bills in later life, according to the institute…

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Posted in Executive Benefits, Health, Health & Welfare, News & Updates, Retirement Plans

The Secret to Taming Health-Care Costs

via Wall Street Journal

Monday’s report from the Congressional Budget Office on the country’s long-term economic outlook underscores what budget experts have long known: The rising cost of health care is the single largest driver of the gloomy long-term fiscal outlook for the U.S. Yes, the pace of increase has moderated in recent years. But many of the factors reducing cost increases are likely to prove transient.

In a balanced analysis of the evidence issued in September, the Center for American Progress (CAP) gives the Affordable Care Act some credit for slower growth—for example, by providing incentives that lower the rate at which patients are readmitted to hospitals after being discharged. But CAP also finds that between 37% and 70% of the slowdown is attributable to the Great Recession, which reduced the demand for health-care services by consumers with private insurance.

One recent study suggests that rising copayments and deductibles account for another 20%; other studies find that the number could be even higher. The use of new technologies has also moderated costs, and cheaper generic-drug prescriptions constitute a higher share of the total spent on medicines. The difficulty, the CAP report concludes, is that several of these factors had a “one-time effect” on health-care spending and “cannot be expected to moderate the growth of spending over the long term.”

To read the full article CLICK HERE

Posted in Health, Health & Welfare, Health Reform, News & Updates

When You Delay Your Social Security Benefits, Here’s How the Math Works

via Wall Street Journal

The frequent misstatement of the 8% annual increase in Social Security benefits for those who delay collecting is a pet peeve of mine. The increase in benefits each year from full retirement age to age 70 is 8% of the benefit at full retirement age. That means that each year you delay, your benefit goes up by the same dollar amount—which means that each year, it goes up by a slightly smaller percentage of the benefit you already are entitled to.


Consider a worker who was born between 1943 and 1954 and is entitled to a benefit of $1,000 a month at the full retirement age of 66. If he or she delays the start of Social Security to age 67, the benefit would be 108% of the full-retirement-age benefit, or $1,080.

If this person starts Social Security at age 68, the benefit would be 116% of the base, or $1,160. That’s 7.4% higher than for starting at age 67. Delaying from 68 to 69 (when the benefit is 124% of the base, or $1,240) is a 6.9% bump. At age 70, our worker would get $1,320, up 6.5% from the benefit starting at 69…

To read the full WSJ article CLICK HERE

Posted in News & Updates

UnitedHealth’s Profits Better Than Expected

via WSJ

United Health Group Inc. reported a better-than-expected 5.8% increase in earnings for its December quarter, as the health-care company continued to benefit from the growth in premium revenue outpacing medical costs.

Shares of UnitedHealth were up $3.70, or 3.5%, to $109.32 in 4 p.m. New York Stock Exchange composite trading Wednesday.

UnitedHealth, like its fellow health insurers, has sought to contain costs related to medical care, particularly as expensive, high-profile treatments for hepatitis C and cancer enter the market. Meanwhile, the company has benefited from growth in its government-sponsored plans as well as its health-services arm.

Overall, for the period ended Dec. 31, UnitedHealth posted earnings of $1.51 billion, or $1.55 a share, up from $1.43 billion, or $1.41 a share, a year earlier. Revenue improved 7.4% to $33.43 billion…

To Read the Full Article CLICK HERE

Posted in Health, Health & Welfare, Health Reform, News & Updates

The Effect of Eliminating the ACA’s Tax Credits in Federally Facilitated Marketplaces

via RAND Corporation

In this research report, RAND Corporation researchers assess the expected change in enrollment and premiums in the Patient Protection and Affordable Care Act (ACA)–compliant individual market in federally facilitated marketplace (FFM) states if the U.S. Supreme Court decides to eliminate subsidies in FFM states. The analysis used the Comprehensive Assessment of Reform Efforts (COMPARE) microsimulation model, an economic model developed by RAND researchers, to assess the impact of proposed health reforms. The authors found that enrollment in the ACA–compliant individual market, including plans sold in the marketplaces and those sold outside of the marketplaces that comply with ACA regulations, would decline by 9.6 million, or 70 percent, in FFM states if subsidies were eliminated. They also found that unsubsidized premiums in the ACA–compliant individual market would increase 47 percent in FFM states. This corresponds to a $1,610 annual increase for a 40-year-old nonsmoker purchasing a silver plan…

To read the full article and see Key Findings on this research report please CLICK HERE

Posted in Health, Health & Welfare, Health Reform, News & Updates

Poor Oversight Marred Health Site’s Launch

via WSJ

The federal government skipped key contracting requirements when awarding hundreds of millions of dollars to build the troubled site, according to an inspector general’s report.

The investigation published Tuesday by the Office of Inspector General for the Department of Health & Human Services found the federal government failed to probe fully the past performance of CGI Federal Inc., a subsidiary of a Canadian information technology firm, before awarding it a contract to construct basic parts of the insurance enrollment site.

Federal officials also drafted agreements that left the government on the hook for whatever it cost contractors to complete their work, investigators said. Several big contracts including CGI’s ballooned to twice or three times the estimated cost. is the main platform for people to buy insurance under the 2010 Affordable Care Act and apply for tax credits toward the cost of their coverage.

The report of work carried out by the Centers for Medicare and Medicaid Services, the HHS unit tasked with building the site, paints a picture of rushed and sloppy activity with poor oversight that didn’t meet the agency’s standards. The site launched in 2013 with many problems that initially crippled enrollments by consumers…

To Read the Full Article CLICK HERE

Posted in Health, Health & Welfare, Health Reform, News & Updates

AT&T’s Epic $8 Billion Friday-Night News Dump

via Business Insider

The running joke in news is that companies dump news when people aren’t looking, like before holidays or on Friday nights before long weekends.

AT&T met the latter criteria this week.

On Friday night, AT&T disclosed that in the fourth quarter, it will take a $7.9 billion noncash, pretax loss related to an adjustment in assumptions made for its pension plan.

The company announced that on Dec. 31, it adjusted its assumed discount rate for its pension obligation to 4.3%. Previously, the company had used a 5% discount rate, according to its most recent 10-K filed with the SEC…

Read the full article HERE

Posted in News & Updates