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SMART MONEY TIPS FROM TOTS TO RETIREES INSURANCE 101

AN ESTATE PLAN ... WHO, ME?

WHAT A WIDOW MUST KNOW CHARITABLE GIVING IN GOOD TIMES AND BAD

MEET YOUR FINANCIAL TEAM 10 TIPS FOR SAVING MORE POP QUIZ: TEST YOUR FINANCIAL SAVVY! HOW TO BOOST YOUR CREDIT SCORE

JANUARY 23, 2011 ADVERTISING SUPPLEMENT


IT’S YOUR LIFE, LIVE IT Bob Reisinger President Waterloo/Cedar Falls Board of Realtors

“Selling Your House? Tips for success, How much? When to put it on the market.” February 10th at 2 p.m. Landmark Commons, 1400 Maxhelen Blvd., circle drive main entrance. Refreshments, door prizes. Information on Phase II of Landmark Commons and tours.

February 10th at 6:00 p.m. Friendship Village, 3720 Village Place, Door C, Cove Lounge. Light supper, door prizes, tours of Friendship Village, information on new pricing options. Seating limited. Invite a friend. Must RSVP 291-8100

Becky Esker, CPO President Get Organized! L.L.C. www.TheOrganizingChoice.com Downsizing and Relocation Expert

“Leave the Baggage Behind” March 8th at 2 p.m. Friendship Village, 3720 Village Place, Door A, Dining Room. Refreshments, door prizes, tours of Friendship Village, information on new pricing options.

March 8th at 6 p.m. Landmark Commons, 1400 Maxhelen Blvd., circle drive main entrance. Light supper, door prizes, information on Phase II of Landmark Commons and tours. Seating limited. Invite a friend. Must RSVP 291-8100

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• Whatever your retirement plan, we have it. Whatever life hands you,we can help you with it. • Ask us about our New refundable entry fee options. • Call us now to reserve your unit at Landmark Commons newest addition. Only 12 of 30 units remaining! Construction to begin in the spring of 2011.

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“Planning for a Confident Retirement” April 28th at 2 p.m.

For more information about Friendship Village and its affiliates, contact...

Friendship Village, 3720 Village Place, Door A, Dining Room. Refreshments, door prizes, tours of Friendship Village, information on new pricing options.

April 28th at 6 p.m. Landmark Commons, 1400 Maxhelen Blvd., circle drive main entrance. Light supper, door prizes, information on Phase II of Landmark Commons and tours. Seating limited. Invite a friend. Must RSVP 291-8100

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Kathy Martin (319) 291-8293

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SUNDAY, JANUARY 23, 2011

Procrastination is one of the main ways the average Joe and Jane get in trouble with their finances. Break the bad habit – starting now! Answer these basic questions and see how you rate

Pop Quiz: Test Your Financial Savvy QUESTION

QUESTION

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According to actuarial charts, how many years can you expect to live?

What percent of a retiree’s income will be spent on healthcare, on average? a. 5 percent b. 10 percent c. 15 percent d. 20 percent

QUESTION

2 At what age is a worker born between 1943 and 1954 eligible for full social security benefits? a. 62 c. 66 b. 64 d. 68

How many years, on average, will a U.S. citizen spend in retirement? a. 10 b. 15 c. 20 d. 25

QUESTION 4: Income taxes go away after a worker retires. True or false?

6 WHAT PERCENT OF EARLY BABY BOOMERS, AGE 56 TO 62, ARE EXPECTED TO RUN OUT OF MONEY TO COVER BASIC RETIREMENT LIVING EXPENSES?

A. 17 PERCENT B. 23 PERCENT

C. 42 PERCENT D. 47 PERCENT

Your credit score is: a. a snapshot of your credit risk b. an objective measurement used by lenders c. available to you on request d. all of the above QUESTION

10 QUESTION 7: True or False: If you die without a will, your sur viving spouse will be granted all or most of your assets.

QUESTION

8 Insurance is a way of: a. saving for a rainy day b. preventing unplanned events c. handling risk d. all of the above

You can improve your credit rating by a. correcting inaccurate information as soon as possible b. disputing negative information c. correcting only the worst report d. asking that negative information not be included in your credit report © CTW Features

A HOW DO YOU RATE? 10 CORRECT: Warren Buffet is your new best friend! 9 CORRECT: Close… but we are not playing horseshoes! 8 OR LESS CORRECT: It’s time to do some homework!

1. The U.S. Social Security Administration estimates that a man reaching age 65 today can expect to live, on average, until age 83. A woman turning age 65 today can expect to live until age 85. To calculate your expected lifespan, go to: http://www.ssa.gov/planners/lifeexpectancy.htm 2. C: 66 years old 3. D: 20 percent 4. False. Pre-tax money a worker contributed to a retirement plan is subject to income taxes when it’s withdrawn during retirement years. 5. C: 20 years 6. D: 47 percent 7. False. Every U.S. state has unique laws governing who will own the property. To calculate the outcome in your state, go to www.mystatewill.com 8. C: Handling risk 9. D: All of the above 10. A: Correcting inaccurate information as soon as possible © CTW Features

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An Estate Plan… Who, Me? You don’t need to live in a fancy house in a gated community to have an estate. Establishing a solid financial plan, with documents that govern what you own and bequeath, is key to moving ahead in life with confidence and security DAWN KLINGENSMITH CTW FEATURES

ISTOCKPHOTO.COM

PEOPLE TEND TO delay or avoid estate planning as though drafting a will might somehow hasten their demise. But thought of another way, estate planning actually prolongs one’s presence among the living. An estate plan allows for calling shots from the grave. The value of property at the time of its owner’s death is an

estate. Estate planning begins by taking inventory of someone’s assets, including investments, retirement savings, insurance policies, real estate and business interests, and then deciding to whom these assets should go. Individuals also must decide who should handle financial and medical affairs if they are incapacitated and ask if they’ll serve as financial and health care powers of attorney, respectively. It’s smart to work with a qualified lawyer to create the legal documents that govern the pro-

cess of protecting the estate and passing along assets as planned. Take time to get educated on the basics before choosing a professional and sitting down to work on a plan. A WILL The centerpiece of a comprehensive estate plan is a will. The reason a will is important, regardless of net worth, is so assets go to the right people, says Alexandra Armstrong, certified financial planner with the Washington, D.C.-based investment advisory firm Armstrong, Fleming & Moore. Die without one, and in most cases each state applies its standard formula to decide who gets what, without regard to wishes or the needs of heirs. For example, in the absence of a will in the District of Columbia, only one-third of the deceased’s assets not jointly held will go to a surviving spouse; two-thirds goes to the children. In most places, when a single dies without a will, his or her parents inherit all assets or, if Mom and Pop are dead, the siblings inherit in equal measure. That means the brother who won the lotto gets the

wcfcourier.com

SUNDAY, JANUARY 23, 2011

GET ORGANIZED Assemble and store these documents in a bank safe deposit box and/or a fireproof safe to which a trusted individual besides your spouse has access. • Will, trust agreements and letter of instruction • Contact information for advisers including attorney, accountant, financial planner and stockbroker • Powers of attorney (financial, health care) • List of retirement, bank and brokerage accounts with PINs • Investment documents (certificates of deposit, stock certificates, etc.) • Life insurance policies • Health and long-term care insurance policies • Social security and pension information, and military discharge papers (if benefits transfer to survivors) • Marriage certificate • Funeral prearrangements and cemetery plot deed • Real property documents, such as deeds • Titles and extended warranties to cars, boats, travel trailers, etc. • Safe combinations • List of stored or loaned valuables © CTW Features

same amount as the brother who went into social work and the estranged sister with a gambling addiction. A will is also the best place to name guardians of children. Standard forms are available for the simplest of situations. “But most people should consult an estate-planning lawyer” for will preparation, Armstrong advises. Leave a copy of the will with a lawyer, and keep a copy. A LETTER OF INSTRUCTION A letter of instruction to survivors includes bequests not specified in the will, including sentimentally valuable possessions like Grandma’s china and the oil painting over the mantel. Here’s where to communicate to family members the type of memo-

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rial service wanted, including “in lieu of flowers” specifications and wishes to be cremated or buried. Individuals might even write down key points for their obituary in case loved ones omit one of our prouder accomplishments. A LIVING WILL A living will or advance medical directive spells out wishes regarding life support or medical intervention and care. For someone in a coma who does not want to be kept alive on life support, a living will spells that out. A health care proxy names a person to carry out those wishes. A lawyer can create this document. Keep signed, witnessed copies at home; give signed copy to those entrusted to make decisions.


Because of strict privacy rules that govern doctors and hospitals set forth by the Health Insurance Portability and Accountability Act, a HIPAA waiver also should be considered. This lets people name individuals with whom health care providers can discuss condition and care. Unlike a power of attorney, folks named in the waiver are not entitled to make medical decisions on someone else’s behalf. POWER OF ATTORNEY A durable power of attorney names a person to act on an individual’s behalf in financial matters: investing money, signing checks, selling real estate. Keep a signed copy handy and give one to the person designated. A TRUST In some cases, individuals decide to create a trust, which puts conditions on how and when assets will be distributed. Trusts are designed to achieve different goals. Often, they allow the wealthier among us to reduce estate taxes. They can also be used to hold money for underage children; provide care for disabled children; or equalize inheritances. A financial adviser can help determine whether it makes sense to set up a trust, Armstrong says. Keep in mind that retirement

accounts such as IRA and 401k plans, have designated beneficiaries apart from what it says in someone’s will, Armstrong says. So it’s important to review and amend these accounts periodically – along with a will, pension plans and life insurance policies – especially if marital status changes. A rainy day fund of three to six months’ expenses is also a key component of an estate plan. “Settling an estate doesn’t happen overnight,” Armstrong says, “and meanwhile a surviving spouse needs something to live on, a cash reserve to carry them through.” A final and crucial step in estate planning is assembling pertinent documents (see sidebar) and making sure a survivor is aware of and has access to them. “You’d be surprised by the number of life insurance policies that are issued but never paid because the survivors don’t even know they exist,” says Wayne Copelin, founder and president, Copelin Financial Advisors, Sugar Land, Texas. He recommends keeping original documents in a bank safe deposit box and a set of copies at home. It’s important to designate a signatory who is authorized to unlock the box in the event we die; otherwise, a court order must be obtained, he adds. © CTW Features FIN AN C IAL

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wcfcourier.com

SUNDAY, JANUARY 23, 2011

Meet Your Financial Team It takes a team to make financial goals a reality. Here is the roster of folks you want to have working for you. TANIESHA ROBINSON

mation he collects regarding tion on brokers. the client’s assets and goals. ISTOCKPHOTO.COM Interview a few planners INSURANCE AGENT PERSONAL FINANCE before committing to one, Licensed insurance agents can be a source of stress, and be sure to find out if the are essentially salespeople which is why a lot of folks planner’s services are com- who provide clients with life, like to rely on a professional mission-based or fee-based. health or property insurance when it comes to crunching policies. FINRA outlines two numbers. STOCK BROKER categories for agents: an Whether the goal is to dig A broker isn’t just the per- independent insurance agent out of debt or to get ahead son that carries out desired who may represent mulon retirement savings – and investment transactions. tiple companies to find the stay there – turn to some- According to the Financial best coverage for an indione trained and qualified to Industry Regulatory Author- vidual client; and a “captive” offer professional guidance ity, a broker’s role is legal- agent who only recommends in matters of saving, invest- ly defined as a person or policies from one company. ing and planning to get on company that buys and Agents are licensed by the the road to financial balance. sells stocks, bonds, mutual state. Find financial and disRead on to learn more about funds and other securities on ciplinary information on insurthe pros to recruit for a top- behalf of customers and/or ance companies nationwide notch personal finance team. for its own account. Broker- on the National Association age firms fall into two cat- of Insurance Commissioners FINANCIAL egories: discount and full- website, www.naic.org. PLANNER/ADVISER service. Transaction services Financial planners help from discount brokers are CERTIFIED PUBLIC clients invest and increase usually cheaper but come ACCOUNTANT capital at an acceptable level with little advice. For invest- Those who are selfof risk. “I look at my role ment counsel, investors can employed or simply have as being the quarterback employ a full-service broker. complex tax situations of the financial team, bring- To learn more about how to should consider employing ing all the other financially find a qualified broker go to the expertise of a CPA. CPAs related people who a cli- www.finra.org and click on undergo rigorous certification ent interacts with together,” “Investors.” Use the FINRA and licensing procedures in says Paul Winter, president BrokerCheck tool to track most states. As a result, they of Five Seasons Financial down background informa- can handle the nuances of Planning in Salt Lake City. To do this, planners attempt to obtain a comprehensive look at clients’ entire financial situation – bank accounts, brokerage accounts, retirement accounts and other investments. Winter refers to himself as “a conduit of information” and formulates plans for his 1416 West 4th Street, Waterloo, Iowa Years clients based on the infor319-232-7113 CTW FEATURES

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self-employment and can also provide some financial planning advice. Their services can be expensive. A cheaper option may be an enrolled agent, says Lauren Lyons Cole, financial planner in residence at LearnVest. com, a personal finance website. ESTATE LAWYER Shockingly, simply signing away worldly possessions on a cocktail napkin doesn’t pass muster for a will. That’s where a lawyer schooled in estate planning comes in. This specialized attorney will draft proper wills, living wills and trusts, which dictate how property and assets will be distributed upon death or in the event one becomes incapacitated. The more complex familial circumstances are – multiple marriages or children, for example – the more critical it is to have plans in place. PERSONAL BANKER The friendly faces at the bank are not just there to transact deposits and withdrawals all day. Personal bankers can review accounts to determine eligibility for a higher-yielding account and if there are new credit or debit cards available that offer better rates or rewards. They will also field questions regarding mortgages or car loans and can put individuals in touch with the appropriate loan officer. AT-WORK HUMAN RESOURCES PROFESSIONAL Lyons Cole says that HR managers are some of the most underutilized financial resources. They know the details about the company’s insurance policies and 401(k) or other retirement programs

sponsored by the company. “That’s really their job, to provide for their employee in many financial spheres so employees can go to work, be productive and not have to worry about benefits,� Winter says.

? QUESTIONS TO ASK A FINANCIAL PLANNER

Š CTW Features

There’s no substitute for a face-to-face chat to decide if a professional financial planner is right for you. Among the questions you should ask:

s7HATISYOURAREAOFEXPERTISE s7HATISYOUREDUCATIONALBACKGROUND s7HATFINANCIALPLANNINGCREDENTIALS HAVEYOUEARNED s7HATFURTHEREDUCATIONINFINANCIAL PLANNINGDOYOUPLANTOPURSUE s!REYOUAMEMBEROFANYPROFESSIONAL FINANCIALPLANNINGASSOCIATION s(OWLONGHAVEYOUBEENOFFERINGFINANCIALPLANNINGSERVICES s7ILLYOUPROVIDEREFERENCES s(AVEYOUEVERBEENCITEDBYAPROFESsional or regulatory governing body for DISCIPLINARYREASONS s)NTHELASTYEAR HOWMANYCLIENTSHAVE STOPPEDUSINGYOURSERVICES7HY s$OYOUDOTHEWORKORWILL)BETURNED OVERTOANOTHEREMPLOYEEINYOURFIRM s(OWAREFEESCALCULATED

s7HATISYOURAPPROACHTOSAVINGAND INVESTING s7ILLYOUPROVIDEANINDIVIDUALIZED FINANCIALPLAN#AN)LOOKATARECENT EXAMPLEOFAPLANPREPAREDFORSOMEONEINSIMILARFINANCIALCIRCUMSTANCES s7HATKINDSOFCOMMUNICATIONSCAN) EXPECTFROMYOUONANONGOINGBASIS ACCOUNTSTATEMENTS NEWSLETTERS ETC  s(OWOFTENWILLYOUREVIEWMYPORTFOLIO s(OWAREYOUCOMPENSATEDFORTHESERVICESYOUPROVIDE s/NAVERAGE HOWMUCHCAN)EXPECTTO PAYFORYOURSERVICE s7HATDO)RECEIVEINRETURNFORTHATFEE s7HAT IFANYTHING DOYOUEXPECTOFME DURINGOURRELATIONSHIP Source: www.ChoosetoSave.org Š CTW Features

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SUNDAY, JANUARY 23, 2011

What a Widow Needs to Know

The death of a husband launches many women into uncharted territory: financial planning DAWN KLINGENSMITH

finances such as paying bills and managing bank ISTOCKPHOTO.COM accounts, Wallaert adds, but due to lack of exposure they ALTHOUGH WOMEN generally tend to underestimate their investment-management outlive their spouses, it’s capabilities. When put to the still common in this day and test, though, women usually age for husbands to handle know more about investing long-term financial planning than they think they do. with little or no involvement The basics of financial from their wives. Once planning can be learned. widowed, women often find that financial advisers who did Meanwhile, newly widowed business with their husbands women should make it clear fail to address their concerns. they intend to retain control In fact, 70 percent of widows over their investments, that they’ll make adjustments considered firing their in their own time and that advisers within three years they won’t tolerate strongof their husbands’ deaths, arm tactics or dismissive according to research by Minneapolis-based Allianz Life treatment. However, Armstrong advises against Insurance Co. making immediate changes. “Advisers often aren’t as responsive as they should be, Unless an adviser’s dealings seem shady, in the beginning they talk down to widows, it’s easiest to work with or they take the ‘Don’t that person because he or bother your pretty little head’ she is already familiar with approach and fail to explain the couple’s situation. This things,” says Washington, also applies to lawyers and D.C.-based financial planner accountants, Armstrong Alexandra Armstrong, coauthor of “On Your Own: A Widow’s Passage to Emotional and Financial WellBeing” (Armstrong Fleming & Moore Inc., 2006). Some women cede control not only because they’re overwhelmed by the estate-settling and grieving processes but also because they doubt their abilities when it comes to “high finance,” says behavioral psychologist Matt Wallaert, the lead scientist at Thrive, a New York-based financial management Web site (JustThrive.com). Women routinely handle day-to-day household CTW FEATURES

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says. “In six months to a year, you can reassess these relationships,” she says. A widow’s first order of business when working with an adviser is calculating how much it will cost her to live. The adviser should provide her with a list of records she needs to assemble. She might want to take someone with her who’ll ask questions that don’t occur to her. Before inviting a family member, she should consider whether that person’s interests might be self-serving. She should take notes and ask that any recommendations be put in writing. “It’s a difficult time. Things go in one ear and out the other,” Armstrong says. A widow also should find out whether the adviser has an assistant who can answer basic questions. That way, she’s less likely to feel like a burden or like she’s being ignored in the event the adviser is busy with other clients.

Initially, the goal is to make sure the widow has sufficient income to pay her current expenses. “Very rarely is there a situation where something immediate needs to be done with the investment portfolio,” Wallaert says. So if an adviser presses, a widow might want to hire a replacement once the estate is settled. Often, “adult children kind of swoop in and take over,” Armstrong says. “Don’t succumb to any undue pressure from anyone, including family.” If a widow ultimately decides to hire a new financial planner, she should ask other trusted advisers (accountant, lawyer,

banker) for recommendations, as well as her widowed friends. An adviser should offer an initial consultation for free. Wallaert recommends asking whether the adviser is incentivized to steer clients toward certain investments and to regard such a setup as a potential red flag. Armstrong recommends asking whether the adviser belongs to an Estate Planning Council. Many competent advisers don’t, she says. But membership is a good indication the adviser is interested in working with widows. © CTW Features


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wcfcourier.com

SUNDAY, JANUARY 23, 2011

10 Tips to Jump-Start Your Savings Last we checked there was no bailout money for regular folks. Are you saving enough? DAWN KLINGENSMITH CTW FEATURES

cery bills, and budget accordingly.

ISTOCKPHOTO.COM

TIP NO.

1 Set a budget and stick to it.“Budgeting is the No. 1 surefire way to save money,” says Ethan Ewing, president of Bills.com, San Mateo, Calif. Set specific goals, such as lowering gro-

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2 RULE OF THUMB: Everyone should have six months’ worth of living expenses tucked away in savings. Reality: Few folks do, and the proverbial “rainy day” looms. Remedy: Start setting aside money today. Here are 10 ways to save before you get soaked.

TIP NO.

Carry cash. People who count out bills instead of paying with debit or credit tend to spend less and make fewer unplanned purchases. TIP NO.

3 Optimize your cell phone plan.“I like Billshrink.com, where you can find better credit cards and cell phone plans to suit your individual needs,” says Ramit Sethi, author and founder of iwillteachyoutoberich.com, San Francisco.

START EARLY, SAVE MORE

Buy a la carte.This seems counterintuitive, but it may be cheaper to cancel subscriptions and memberships and pay as you go instead. In a study of three fitness clubs,“Two researchers from Stanford and Berkeley showed that people overestimate how much they’ll use their gym membership by over 70 percent,” Sethi says. Members who chose a monthly fee of around $70 attended an average of 4.3 times per month.That comes out to more than $17 per visit, whereas a day pass only cost $10. Likewise, downloading your favorite TV shows off the Internet for a

per-episode fee might be cheaper than cable.

retailers, Ewing says.

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SAVED $2,000 PER YEAR Kept money in account until age 65

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5 Redeem reward points. If your credit card offers them, check your statement to see how many you have and then go to the rewards website to find out if it’s possible to convert them into cash or gift cards. Some credit cards double the value of rewards at specific

$20K

$40K

$60K

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Ferret out special offers.“Any time you make a purchase from a major retailer – a new computer, flowers, furniture – check out your credit card and car insurance websites for deals,” Sethi says.“My credit card gives me discounts of up to 30 percent off for things I’m

AMOUNT INVESTED $0

INTEREST EARNED

$80K

going to purchase anyway.”

$100K

$120K $140K

$160K

Negotiate car insurance. Once a year, compare different providers’ rates. Even if you stay with the same company, you likely can save money by adjusting your deductible; unloading unnecessary services (such as roadside assistance if you’re an AAA member); or asking FINAL TOTAL

$180K $200K

$220K

$240K

$260K

The longer money is invested, the more time it has to grow, thanks to compound interest. See how a conservative four percent annual rate of return can make a small stash grow big over time: steps to fix any errors you may find. © CTW Features

$107,209

From age 20 through age 30 From age 20 to age 65

$251,578 $152,288

From age 30 to age 65 $85,688

From age 40 to age 65 From age 50 to age 65

Source: American Savings Education Council; Employee Benefit Research Institute

$41,015

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COURIER about repeat-customer, low-mileage and safeoccupation discounts. Use Sethi’s negotiating script:tinyurl.com/carinsurance1.

wcfcourier.com

SUNDAY, JANUARY 23, 2011

IN OVER YOUR HEAD? Financial journalist Catey Hill, selfdescribed shoe addict and money editor of NYDailyNews.com, says an overspending habit is hard to admit to and even harder to curb, but imperative nonetheless. “Until you

TIP NO.

8 Sell stuff.Auction off unneeded items on eBay or hold a yard sale. Sock away windfalls.

control how much you spend, you’re never going to have enough money,” she says. When Hill realized her irresponsible spending habits, she started a “cash-only diet” and wrapped a piece of paper around her credit card that read, “Do I need this?” Here are signs you may be in need of your own spending diet from her new book, “Shoo, Jimmy Choo!” (Sterling, 2010).

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s9OUHAVENOCONCRETEPLANFORA secure financial future. s9OUHAVESIGNIFICANTDEBTANDNO solid plan to get out of it. sLess than 13 percent of your income goes to your retirement savings (or worse, you haven’t even thought of saving for retirement).

When you receive extra cash – such as a tax return, bonus, birthday gift or proceeds from your yard sale – save it rather than indulging in a splurge.

s9OUHAVEONLYASMALLIN CASE OF emergency fund, or none at all. s9OUPAYONLYTHEMINIMUM ORA little extra, toward your credit card every month. s9OUDONTUNDERSTANDTHEDIFFERence between a Roth IRA, a traditional IRA and a 401(k)… sx.ORDOYOUKNOWTHEBESTWAYS to invest in these retirement plans. s9OUGETAHUGEINCOMETAX refund each year. s9OUDONTHAVETHEINSURANCE you need. s9OUDONTHAVEACLUEABOUTWHERE your money goes each month (but it sure goes somewhere). © CTW Features Source: “Shoo, Jimmy Choo: The Modern Girl’s Guide to Spending Less and Saving More,” by Catey Hill (Sterling, 2010)

TIP NO.

10 Eliminate temptation: unsubscribe. Many retailers send special offers via e-mail. If you’re the sort of shopper easily tempted to overspend on an impulse, click on the “unsubscribe” link at the bottom of such e-mails to stop receiving them.

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© CTW Features

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SUNDAY, JANUARY 23, 2011

Credit Check For better or worse, there’s a number associated with your name. Make sure your credit score is all it can be. DAWN KLINGENSMITH CTW FEATURES

NOW MORE THAN ever, it pays to have an excellent credit score. The best interest rates on auto loans go to folks with scores of 730 and above. And 60 percent of employers pull credit reports for some or all of their prospective hires, according to the survey by the Society of Human Resource Management. The rationale: people with a pattern of mismanaging their own finances exhibit poor judgment, an indication that they may lack the maturity and sense of responsibility it takes to be a trusted employee. Don’t let a low number hold you back in life. It can take months or even years to boost a low score, but there are steps you can take to gain a few points and perhaps qualify for a lower interest rate. Get your credit history for free from annualcreditreport.com – the only authorized source for the free credit report that’s yours by law. The report does not include your credit score, which costs a few dollars to obtain. What you’re looking for is negative information that could be lowering your score. Correct any errors or inaccuracies, such as accounts that aren’t yours or old information that should no longer have any bearing on your score. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputed items and remove them from your credit report if they cannot be verified. Though there is no quick fix for poor credit, paying down credit card balances can boost your score, says Gail Cunningham, vice president of public relations, National Foundation for Credit Counseling. A history of late payments will hurt you, but you can start to mend your credit by paying every bill on time from now on. “Time is your best friend. Treat your debt obligations responsibly and your score will start to reflect that,” Cunningham says. Although closing unused accounts may seem like a good idea, “That’s shooting yourself in the foot,” Cunningham says. The amount of your total debt relative to your total available credit has a significant impact on your score. Ten thousand dollars in credit card debt looks better if your line of credit is $100,000 vs. $15,000, she says, because you’re not as close to maxing out your accounts. The length of your credit history also affects your score, so don’t close your oldest accounts. Use

wcfcourier.com those cards occasionally to keep the accounts active and avoid cancellation. Borrowers should pay off any overdue bills or old debts they forgot about, and pay down high credit card balances to improve their credit utilization ratio (how much of their available credit line they owe.) Credit card balances in excess of 50 percent of their limits will raise eyebrows, while 30 percent or lower is seen as responsible, says Cunningham. Credit bureaus generally don’t like to see too many inquiries about your credit history because it suggests you are desperate for money. However, the bureaus realize that if you’re shopping around for a major purchase, such as car, you may go to several dealerships in search of

COURIER the best deal. Each of those places will check your credit to determine the interest rate for which you are qualified. Multiple credit checks from dealerships will be reported as a single inquiry provided the inquiries all occur within a 14-day period. “It’s critical that you have your ducks in a row so you can do your shopping within that time frame,” Cunningham says. If you end up shopping over a longer period, bring a printout of your credit report and see what dealerships have to say before they check your credit, since each inquiry can decrease your score by five points, says financial planner Joel J. Ohman, founder of CreditCardChaser.com, a credit card comparison site that promotes responsible credit management.

Only time and discipline can mend a damaged credit record. “Don’t fall for credit doctoring or credit repair services. Start treating your

debt obligations responsibly, and over time, your credit report will improve,” Cunningham says. © CTW Features

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Financial Planning Timeline TANIESHA ROBINSON CTW FEATURES

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GOOD FINANCIAL habits start early. The very best last well into old age. For those somewhere in the middle and still trying to figure it all out, there’s help. No matter what stage of life, a person can always take steps to improve his or her finances, says Julie Jason, president of the Jackson, Grant Investment Advisors, Stamford, Conn. Here are tips on what family members need to think about and plan for at all stages of life, from childhood to retirement.

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How to think smarter and plan better in money matters at all stages of life, from tots to retirees

CHILDREN

TEENS

If little ones start to learn the basics of money management as they grow, perhaps they can avoid the debt and exuberant spending habits that plague many adults. It’s important to teach children that every dollar they receive is not a dollar they can spend, says Manisha Thakor, personal finance expert for women and author of “Get Financially Naked,” (Adams Media, 2009). Kids should learn to divide allowances into three buckets: one for savings, one for charity and one for spending. Thakor recommends parents help children allocate 10 percent for savings, 10 percent for charity and 80 percent for spending.

As kids approach their teenage years, they can start to grasp the truth in the old adage “money doesn’t grow on trees.”Thakor tells teens to think about how many hours they would have to work to earn enough to buy an item they want.This way, they begin to understand how much labor really goes into an iPod or Xbox purchase. Encourage a teen to find a part-time job, and share your views on money matters and what you’ve learned about saving and spending.

tip Help kids learn to save: Fiddle with the online allowance calculator at www.threejars.com to come up with a weekly sum that’s reasonable, based on the age of the child and the parent’s own experience.

tip Required reading: Jean Chatzky, awardwinning financial journalist, wrote “Not Your Parents’ Money Book: Making, Saving and Spending Your Own Money,” (Simon & Schuster, 2010) to help start teens on a path to financial success.

COLLEGE STUDENTS

The average collegeage credit card holder carries a balance of more than $3,000, according to Sallie Mae. Fortunately for frisky, young credit users, credit card reform measures that started rolling out in 2010 make it more difficult to overload on credit and debt, requiring anyone under age 21 to show proof of income or get parents to co-sign in order to get a credit card. College students shouldn’t avoid credit cards completely, however.A student should get one credit card in his or her name; monitor his credit record at the three major agencies; and pay off the bill every month. Used responsibly, a credit card can help young adults build a strong credit profile.

NEWLYWEDS

A new couple’s main financial goal should be to build a solid foundation that includes an emergency fund to cover three to six months of living expenses,Thakor says. However, this should happen only after each partner pays down any debts they may have accumulated before marriage.Thakor urges newlyweds to conduct financial check-ins on all assets at least semiannually. Couples should save 20 percent of their income,Thakor says. Investment smarts: If

tip your employer offers a tax sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. >> CONTINUED ON PAGE 14


SUNDAY, JANUARY 23, 2011

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Financial Planning Timeline Continued... MARRIED WITH A FAMILY Once the storks start dropping baby bundles at the doorstep, it’s time to think about life insurance.Whole life insurance is expensive and unnecessary in Thakor’s opinion. She suggests acquiring term life insurance instead, which provides coverage for a set time period – usually five to 30 years – at a fixed rate. Keep retirement saving in mind, despite the focus on children.You can put $5,000 a year into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you don’t have a retirement plan (or are in a plan and earn less than a certain amount), you can also take a tax deduction for your IRA contributions.

tip College planning: The College Savings Plan calculator at the financial education website www. mindyourfinances.com, can help families develop or fine-tune a college savings plan, factoring in number and ages of children in the family. Click on “Financial Tools.”

IN YOUR 30s AND EARLY 40s

“The challenge as you enter into these years is to avoid lifestyle creep,”Thakor says.“It’s very easy to start living beyond your means. The more you earn, sometimes the more you spend.”This presents a big problem for savings for a couple’s retirement and their children’s college education.Thakor has noted another dangerous trend in this age bracket: risky investments.An investment portfolio at this age should be a low-cost, high-quality mix of stocks, bonds and mutual funds that grows conservatively over time, she says.

tip Start early. Make retirement saving a priority. Devise a plan, stick to it and set goals. Grab a quick estimate of your retirement needs using the “Ballpark Estimate” tool at www.choosetosave.org/

IN YOUR 50s…

IN YOUR 60s…

“Fifty is the time of preparation and a time of opportunity,”says Julie Jason, author of“The AARP Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad,”(Sterling, 2009). Make catch-up contributions, an extra amount those over 50 can add to 401(k) and other retirement accounts.At age 59 1/2 you will no longer be hit with tax penalties on withdrawals from retirement accounts, but leaving money in means more time for it to grow. Imagine you’re retiring on Monday and need to calculate how long your funds will last. Jason says this scenario forces people to look at their expenses, savings and income sources outside of work.“If you do the analysis, you can adjust your savings and investing,” she says.

The minimum age to receive Social Security benefits is age is 62, but delaying to a later year will mean a bigger monthly benefit. Generally, governmentsponsored Medicare health insurance is available to those age 65 and older.At 66, those born between 1943 and 1954 are eligible for full Social Security benefits. Jason says that those at age 65 must realize that they’re targets for every ambitious financial advisor.“Put on a skeptics hat,” she says. Retirees should interview professionals to make sure they have prior experience with retirement accounts and clients in financial situations similar. Making decisions for a $100,000 account is very different from making decisions for a million-dollar account, Jason says.

Get Going! Are you on

tip track financially for a comfortable retirement? The Financial Planning Assoc. offers an interactive Financial Roadmap tool to help highlight areas where you need to improve: Go to www.fpaforfinancialplanning.org/ and click on “Financial Roadmap” under Tools & Resources.

tip Learn what your estimated social security benefit will be at retirement by using the retirement estimator at www. ssa.gov/estimator or call 1-800-772-1213.

IN YOUR 70s…

80s AND BEYOND

“Now is the time to review assumptions and make adjustments to your cash flow and to your investments,” Jason says.At the outset of retirement, people assume that healthcare will be their greatest expense. It turns out that the largest expense is most often taxes. Plan to begin taking minimum withdrawals from most retirement accounts by 70 1/2 or you may be charged a penalty.

Healthcare and legacy planning should come into the picture around age 85, Jason says. Long-term care for husbands and wives should be determined.“At a certain point you have to bring in your spouse and see if you’re in sync with each other,” Jason says. She reminds retirees to include the desire to leave an inheritance in their planning.

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Insurance for Beginners Genuine financial security often includes a few safety nets. Here’s an intro to insurance options to get on the road to feeling secure adults who have responsibilities, such as kids and a CTW FEATURES mortgage, but not a lot of extra cash, Hunt says. The IT DOESN’T MATTER if premiums for term life insurevery penny is pinched. A ance only pay out should calamity can arrive unanyou die during the specified nounced and wipe out any period. family’s financial security. The “Permanent” life insuronly way to ensure protection ance pegs a portion of each is to start paying attention to premium payment as savthe invisible risks that could ings, which the insured can lie ahead. borrow against – or in some It’s not easy, though, to instances, withdraw from – to get a focus on the insurance pay for certain expenses, protection a family really explains Catherine Theroux, a needs – and can afford. Here, spokeswoman for LIMRA, an experts share tips for those insurance research group. who want to guard their Permanent insurance financial security – without comes in two main types: wasting a penny: whole and universal. Premiums for whole life poliLIFE INSURANCE cies tend to stay level, while Even the financially unsopremiums for universal phisticated have heard about policies allow you to elect to life insurance, an insurance pay certain minimums, with policy that pays a sum to a lesser investment build-up a spouse, or provides for over time. children or other dependents should one suddenly pass YOUR ACTION PLAN away. In fact, that’s the cenContact agents in your area tral reason to buy life insurto investigate possible prices ance: to replace the income and coverage plans. Check dependents would need, with current car or homeownsays James Hunt, a former er’s insurance companies to Vermont insurance commissee if they provide life polisioner who now analyzes life cies as well. Speak to your policies for the Consumer employer’s human resources Federation of America. department about potential “Term” life policies are the life policies available as part least expensive, which is why of its group benefits. it’s often the choice of young MARILYN KENNEDY MELIA

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DISABILITY INCOME INSURANCE Death is certain. But none of us know whether an accident or serious illness will prevent us from working for a prolonged period. According to the Insurance Information Institute, 43 percent of workers between ages 40 and 65 will suffer a disability that causes an earnings disruption of at least 90 days. The Social Security system has a disability benefit program, and many lower income workers depend on this, Hunt says. Some employers also offer disability coverage as part of their group benefits. For those who are high earners but do not have an employer-based disability plan, neglecting to purchase private disability coverage could mean a dramatic change in lifestyle should they be injured or unable to work and their paychecks stop, says Jeffrey Shaw, executive director of the Life Insurers Council. Purchasing a plan on your own is similar to buying term life; there are various coverage levels and prices. YOUR ACTION PLAN Talk to your employer’s human resources department about what disability

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SUNDAY, JANUARY 23, 2011 policies are available as part of the group benefits. Your state’s insurance department will have names of agencies and companies offering policies in your state; find them at www2.iii.org/stateorganizations/. Visit the Social Security website at www.ssa. gov/disability/ to learn more about disability programs. LONG-TERM CARE INSURANCE In our aging society, nearly everyone knows someone who needs years of nursing care, which can quickly put a drain on life savings. Fortunately, as long-term care needs become more prevalent, insurers are offering more ways to insure against the cost. For instance, many states now participate in a “Partnership for Long-Term Care” program – a cooperative program between state governments and insurers that “is one of the best-kept secrets,” says Jesse Slome, executive

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plan – either on your own or through your employer – you may qualify for a health savings account, paying less for premiums and building savings. Your employer’s benefit manager or a health insurance provider can help with details, but briefly, because deductibles are high – for 2010 and 2011 it’s at least $2,400 for families – monthly premiums are lower. An employee can contribute to a tax-advantaged savings account and tap it to pay the deductible when needed, or keep on saving, perhaps for YOUR ACTION PLAN To find out if your state has retirement health expenses, a LTC partnership, visit http:// explains Roy Ramthun, a fellow at the Council for Affordwww.aaltci.org/long-termable Health Insurance. care-insurance/.

director of the American Association for Long-Term Care Insurance. The partnership programs allow more affordable longterm care insurance and provide special asset protection. Private insurance agents sell the partnership plan and traditional long-term care plans. The cost of long-term care plans varies, depending on the amount of coverage and whether home, assisted-living and nursing care are included.

BLENDING HEALTH INSURANCE AND SAVINGS Paying for health insurance and saving are two of the biggest financial challenges families face. If you purchase a highdeductible health insurance

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The Gift that Keeps on Giving At a time when so many need so much, here’s how to determine a charitable giving plan that makes sense guide to inspire generosity and increase giving to local churches. Developing a chariISTOCKPHOTO.COM table giving plan can be a small or large part of financial IN TOUGH economic times, when people planning, ranging from a oneare more conscious of where time gift to a large donation outlined in a will. Regardless every dollar goes, charitable giving can easily fall off the “to of the size of a bequest, the do” list. But there are benefits choice to give requires time and thought. – for the giver and the charEven for small gifts, Kluth ity – to sustained, consistent donations to a worthy cause, recommends that donors choose a charity carefully, and especially when there are make sure it lines up with his funds on hand that will likely or her values. “Givers should outlive the owners. focus on their passions, and “The reality is, it’s all going to go away. There’s no U-Haul what’s made a difference in their own lives. It will make in the back of a hearse,” giving that much more sigsays Brian Kluth, a Colorado nificant,” he says. Finding the Springs, Colo.-based pasright charity can be as simple tor and financial author who wrote and published “You Are as choosing an organization the giver is already familiar Invited on a 40 Day Spiritual with or doing some research Journey to a More Generous to find a perfect match. Life,” a 2006 Bible-based DANIELLE CADET CTW FEATURES

Guidestar.com provides information about non-profit organizations ranging from the company’s mission and goals to financial details on staff salaries and fiscal operations. CharityNavigator.org uses a numbers-based rating system to assess the financial health of more than 5,000 charities. Kluth says these sites offer to track the percentage of income a giver donates annually. “Sometimes people get into giving ruts and keep giving the same amounts even though their incomes continue to rise. Usually only systematic givers continue to grow their giving as their incomes go up,” he says. Some charities offer gift annuity plans that provide income and tax savings to givers who make substantial donations. There are two types

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SUNDAY, JANUARY 23, 2011 of plans that provide the giver with revenue: a charitable gift annuity and a charitable remainder trust, says Greg Ring, founder of Fulcrum Philanthropy Systems, a Colorado Springs, Colo.-based advisor to non-profits. In a charitable gift annuity, an individual transfers cash or property to the organization in exchange for the charity’s promise to make fixed lifetime payments. In a charitable remainder trust, the grantor turns over property or money to a charity but continues to use the property and receive income from it while living. The grantor’s beneficiaries receive the income and the charity receives the principal after a specified period of time. The grantor avoids capital gains tax on the donated assets and also gets an income tax deduction for the fair market value of the remainder interest that the trust earned. In addition, the asset is removed from

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the estate, reducing subsequent estate taxes. While the contribution is irrevocable, the grantor may have some control over the way the assets are invested, and may even switch from one charity to another. With charitable annuities, individuals can donate to a cause while avoiding taxes on their income at the time of their death or the deaths of their loved ones. “At a simplistic level, people can take the money that was going to go to the government and instead give it to charity,” Ring says. Annuity gifts don’t have to be cash. Securities and assets, which typically constitute a larger percentage of net worth, can also be transferred. “In a tough economic time when people are watching their budgets and salaries are going down, other folks may find they can do much more if they give assets rather than cash,” Ring says. This option is ideal for a

COURIER donor with any range of income. No matter what the financial climate, donating money to charity is always relevant. Developing a charitable giving plan that makes sense and reinforces individual values can be beneficial to the giver and the world at large. © CTW Features

? ASK BEFORE GIVING

Money magazine offers these tips for best initial questions to ask a charity (answers in parentheses) to evaluate its worthiness: s$OESTHE)23RECOGNIZEYOUASA charity? (Yes) s(OWLONGHAVEYOUBEENAROUND (Five years or more)

s7HATPERCENTAGEOFMYDONATIONWILLGO to charitable works? (75 percent or more) s$OYOUHAVEAYEARgSWORTHOFWORKING capital? (Yes) s!REYOUSLASHINGSERVICESTHISYEAR.O © CTW Features

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close to home, or move to a new location that’s closer to family or that offers longedfor social, cultural or natural amenities.

Retirement Living: Should We Stay or Should We Go? As they near retirement, it’s the question all boomers are asking BARBARA BALLINGER

Fleishman-Hillard’s boomerfocused practice, FH Boom. ISTOCKPHOTO.COM The prime destinations seem to be communities close to AS MORE BABY home with residents who boomers reach their 60s and vary in age – where boomers start to ponder retirement, can continue to feel young many begin to debate where and maintain friendships they should spend their – and downtown urban cengolden years. ters, where they can make Highly educated and acdo with less space and fewer tive, boomers aren’t followcars, all while staying close ing in the footsteps of their to hospitals, a host of resparents, many of whom taurants, shops and cultural migrated to warm-weather events. destinations. Stories of older Ann Fry, a life coach and relatives and friends who fell speaker who focuses on reill far away from loved ones invention, is a prime example or become lonely after the of this trend. When she hit excitement of a new destina- 60, she relocated to New tion dimmed that dream of York from Austin, Texas. Fry retirement. In addition, the decided to rent initially, exboomer generation – those plaining “I love it, being able born between 1946 and to call the super and say, ‘Fix 1964 – is highly diverse and this’.” no single solution appeals to Boomers contemplating rethem all, says Carol Orsborn, tirement choose one of two author and co-founder of main paths: find a location CTW FEATURES

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STAY CLOSE TO HOME Because relationships are so important to this generation, many choose to stay within the same community, Orsborn says. In fact, most of those who move into Dublin, Ohio-based Epcon Communities’ various boomergeared developments come from a 7-to-10-mile radius, says Nanette Overly, vice president of sales and marketing. But if they stay put in their own home, many opt to redecorate or remodel so it’s more convenient for their empty-nest years. Others downsize to a smaller home or condo to cut expenses and upkeep. And still others

SUNDAY, JANUARY 23, 2011 upgrade to have more room for kids and grandkids. FIND A MORE APPEALING LOCALE All sorts of reason spur boomers to move – from wanting to be closer to children, live in a different climate, find a state with lower costs of living and estate taxes, or to simply have a new adventure in a new community. They also look for a variety of housing stock, from single-family homes to condos and retirement villages.With so many options, it’s not surprising that the easiest solution for many is to stay put. Nevertheless, the visibility and affluence of this generation has given rise to experts from different disciplines who have lots of advice to share on how boomers – and anyone debating what to do – can


SUNDAY, JANUARY 23, 2011 be better prepared. Here are nine questions experts suggest boomers ask themselves to make the smartest, happiest move:

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Even if you move to be closer to children, realize they may not always stay there.

5. WILL YOU BE WITH LIKE-MINDED FOLKS? 1. WHAT ARE Boomers are social and like YOUR GOALS? to be surrounded by a people Before you focus on the type of varied ages, says Fishof house you seek, think man. One solution for some about your big-picture goal, boomers is to share a condo whether it’s to be closer to or house. Smart development your children and grandchil- companies are building comdren or even farther away, munities targeted at homsays Marion Somers, the eowners with like-minded nationally recognized geriat- interests, Overly says. ric care manager and author of “Elder Care Made Easier” 6. WHAT TYPE OF HOUSE (Addicus Books, 2006). AND COMMUNITY MAKES THE MOST SENSE? 2. ARE YOU UP FOR THE Boomers need to carefully UPHEAVAL? weigh their housing choice Redecorating, remodeland what level of services ing and moving all require they want, based on realtime, money and patience, istic factors such as health and typically add to stress and not just pipe dreams, levels. “Ask yourself whether Somers says. They also you have the stomach to go through a remodeling or move,” suggests Laura Meyer, co-author of “Remodel This!” (Perigee, 2007). Some older homeowners tolerate stress better since they’re not dealing with young children.

COURIER need to be sure their setting offers the right amenities. For those not sure, Somers has them answer questions, talk about possibilities, and put down responses on paper. 7. WHEN IS YOUR DECISION GOING TO BE MADE? Somers has clients determine a timetable rather than put it off indefinitely. 8. CAN YOU AFFORD YOUR DECISION? Too many boomers don’t know how much money they need to age, Fishman says. They need to take into account state and estate taxes and the cost of daily living, including housing, health care and entertainment costs, she says. You also have to take into ac-

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3. ARE YOU READY TO CUT THE UMBILICAL CORD? People become attached to their homes, Meyer says. “Are you really ready to leave?” she asks. 4. WILL YOU CONTINUE TO HAVE A GOOD SUPPORT SYSTEM WHERE YOU ARE OR WHERE YOU GO? It may be your children or a good network of friends, but you need to know that you have people you can rely on, says Ann A. Fishman, president of Generational-Targeted Marketing Corp., New York.

"As always, we believe in serving you"

count any possible income changes. 9. HAVE YOU TRIED OUT YOUR DECISION? It’s hard to test-drive a decision without owning a home, but The North Carolina

Center for Creative Retirement, part of the University of North Carolina at Asheville, offers seminars and a Creative Retirement Exploration Weekend program. Many communities may offer similar programs. © CTW Features

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When Home Alone Isn’t Enough Families face difficult choices when one or both of their parents can no longer live on their own

ONE OF THE toughest decisions many of us will face in our lifetimes is what to do when an aging parent can no longer live independently. Just ask Theresa Duff of Joliet, Ill. Her mother, Rita, already losing her eyesight from macular degeneration, was further hobbled by a broken shoulder and two shattered wrists due to a fall. “It was painful to see mom, who had raised a house full of kids, nursed her husband after his stroke and remained active into her 80s, suddenly become so frail,” Duff says.

As the population ages, the number of adults who need long-term care rises. About nine million senior citizens will need some form of longterm care this year, according to the U.S. Department of Health and Human Services. While the department says family members and friends are the sole caregivers for 70 percent of the elderly, this may not always be possible or practical. “Mom wasn’t ready for a nursing home just yet, but none of the family members still living in the area had homes that could accommodate her limited

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SUNDAY, JANUARY 23, 2011 mobility,” Duff says. “We had to weigh our choices carefully to address her needs, wishes and dignity.” If a family member feels a parent who’s living on his or her own is on the decline and needs custodial assistance, he or she should consult with a medical professional. Either way it’s essential to determine what level of care is needed. This can run from simple help with housekeeping and shopping to more acute levels of care such as health monitoring and physical, speech or occupational therapy. Ultimately, this becomes a decision based as much on a family’s financial resources as it is on an aging parent’s needs. That’s because neither Medicare nor most supplemental health insurance policies pay for longterm care costs. For many, in-home health care can be a desirable and reasonably affordable option. Those who require only modest assistance may have their needs served by a part-time caregiver. Those requiring additional help may require 24-hour live-in assistance. Aside from the cost, family members have to consider the effort involved in hiring a caregiver and following up regularly to ensure that proper care is being given. Another approach is to use the services of a licensed home health care agency, which is a necessity if an individual requires skilled nursing care or physical therapy services. The National Association for Home Care & Hospice maintains a national database of such agencies with tips on how

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to choose and deal with one on an ongoing basis at www. nahc.org. If living at home proves to be particularly difficult because of stairs or other hazards, placing an elderly parent in an assisted living facility may be best. Residents often live in separate apartments, enjoy communal meals and participate in planned activities. Costs usually depends on the size of the living area, services required and where the facility is located, adding up to several thousand dollars a month. For those who require constant care, a nursing home may be the only option, albeit a costly one. Medicare pays for skilled nursing facility care for a limited period following a hospital stay for rehabilitative purposes, but not for ongoing care. State Medicaid programs will generally pay for basic nursing home services, but only after an individual’s personal assets are exhausted and he or she has no other means to cover the cost. All nursing homes that participate in Medicare or Medicaid are subject to annual inspections. In addition to personal vetting of any facilities under consideration, it’s a good idea to compare these inspection records by consulting the “Nursing Home Compare” resource at www.medicare.gov. So how did the Duff family finally decide to care for their mom, Rita? “We wrestled with our options and though the family would have preferred that she live out her final years at home, we finally settled on moving her to an assisted living center,” Duff says. “We didn’t have to worry about caregivers not

COURIER showing up or being inattentive to mom’s needs, and it afforded her some independence and socialization without her having to be cooped up alone at home.” © CTW Features

LONG-TERM CARE RESOURCES • For help in identifying elder care services and facilities in the community, contact the state or city’s elder care agency. Find the contact information online at www.eldercare.gov or by calling (800) 6771116. • Locate a local home health care agency at the National Association for Home Care’s website, www.nahc.org. Click on “Consumer Information.” • For information on assisted living homes, consult the Assisted Living Federation of America at www.alfa.org. • Check local home health-care agency and nursing home accreditation via the Joint Commission on the Accreditation of Healthcare Organizations at www.jointcommission.org. • Research inspection records of nursing homes at www.medicare.gov. Click on “Resource Locator.” © CTW Features

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Why end-of-life planning is smart, necessary By J. Donald Schumacher, Special to CNN

J. Donald Schumacher is president and CEO of the National Hospice and Palliative Care Organization, a public policy group that represents hospices (CNN) -- Thinking about death can be frightening, no matter your age or medical condition. As we get older, the reality of our own mortality tends to come into clearer focus; this doesn’t make talking about death or life-sustaining treatments any less frightening though. It was fear -- stoked by certain politicians -- that led to the inaccurate and misguided “death panel” rumors that surrounded health care reform proposals last year. Beginning January 1, Medicare will reimburse physicians who advise patients, in voluntary discussions, about their preferences for end-of-life care treatment during their annual Medicare “wellness visit.” This is advance care planning, and it is a good thing for seniors, their families and health care professionals. It’s not new. A law passed in 2008 allowed end-of-life planning to be part of a patient’s “welcome to Medicare” exam. Health care reform turned the welcome visit into an annual wellness visit. And now regulations clarify that these important discussions will be covered should the Medicare beneficiary wish to take advantage of this opportunity. Return of death panels? Docs say no way Obama resurrecting death panels? RELATED TOPICS • Health Care Reform • Health Care Issues • Aging and the Elderly 22

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Advance care planning allows a person to make his or her wishes and care preferences known before being faced with a medical crisis. Advance care planning is simply smart lifeplanning. Another way to think about advance care planning is that it’s like planning a trip to an unfamiliar destination. If you’re like many people, once you have your destination in mind, you begin mapping the route you will take to get there. Some people consult AAA or Google Maps to help them chart their course. Other people talk to friends and family members about their experiences on their trips. While people approach mapping their route in differing ways, few would expect to arrive at their destination safely and comfortably without having a well-thought out map in hand before hitting the road. Yet only 30% of Americans have a living will, a map detailing where they want their health care to go should they become unable to voice their wishes. An individual’s personal wishes, beliefs and values are among the most important factors when making care decisions brought about by a serious or life-limiting illness. Such wishes and preferences can be known only if they are discussed openly. Research has shown that patient-physician discussions result in a higher quality of life for patients and their family caregivers facing the end of a life. By having Medicare cover these voluntary consultations, beneficiaries will be able to get information that will help them make their own decisions about their care and what they would or would not want at life’s end. And it’s only appropriate

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patients should be able to have these discussions with the very physicians who have been caring for them and that these doctors be compensated for this valuable service. An advance care planning consultation is not about limiting or rationing care. It’s not about hastening death. It’s not about having choices made for the patient. It’s not about saving money. Advance care planning is about examining options, planning and communicating the choices that the individual wants -- either to limit treatments, accept all treatments or something in between. The course charted is decided by individual patients, not their doctors, and certainly not the government. Advance care planning includes completing a living will and appointing a health care proxy. A living will charts the course for your health care, letting your family and health care providers know what procedures and treatments you would want provided to you and under what conditions. A health care proxy or health care power of attorney form allows you to choose someone you trust to take charge of your health care decisions in case you are unable to make those decisions yourself. Advance directives, as these documents are also known, can be changed as an individual’s situation or wishes change. Based on my 35 years of experience running hospice programs and caring for people at life’s end, I know firsthand that frank, open discussions with one’s health care providers can relieve anxiety about a situation that we all will one day face. It makes sense that Medicare help facilitate this important planning. The opinions expressed in this commentary are solely those of J. Donald Schumacher.

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www.BridgesSL.com 319-233-1133 • 214 Washington St. | Waterloo, IA 50701 *Never receive a rent increase as long as you live at Bridges. Certain conditions may apply, call for complete details.

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take time

to appreciate life.

At Cedar Valley Hospice we partner on thousands of life journeys with families, friends and neighbors. We know the importance of Making Each Moment Matter – and the value of time.

Take time to plan | Life planning involves preparing today for your future tomorrow; communicating end-of-life wishes, appointing a healthcare power of attorney and addressing ďŹ nancial issues are important.

Take time to ask | People cope with end-of-life issues in many ways. Asking your loved ones to discuss this topic assures them their wishes will be honored.

Take time to know | Life provides many choices. Learn the choices you have in your healthcare decisions and know Cedar Valley Hospice will be available in your time of need. Hospice Services | Hospice Home | Grief Support | Eucalyptus Tree | CASS | LINK Palliative Care 2101 Kimball Ave. | Waterloo, IA

319.272.2002 | cvhospice.org Waterloo | Grundy Center | Independence | Waverly | Hospice Home


Life Planning 2011