Kiplinger`s Retirement Report - April 2016 - ICMA-RC

RETIREMENT REPORT
Your Guide to a Richer Retirement
VOLUME 23 | NUMBER 4 | APRIL 2016 | $5.00
in Chelsea, Mass., an inner suburb of Boston. Gallo
suffers from a degenerative nerve and muscle condition and gets around by motorized wheelchair. “This
place is a godsend,” says Gallo, a widow and former
psychotherapist.
There are two
7,000-square-foot
Green Houses on
each of five floors.
INVESTING
Each Green House
5 | ‘Impact Investing’ Products
has its own entrance
MANAGING YOUR FINANCES
and 10 residents.
6 | New Rules of Social Security
Four Green Houses
provide skilled-nurs7 | Your Questions Answered
ing care for elders
8 | Information to Act On
while three provide
10 | Income-Replacement Ratio
short-term rehabil11 | Tips for Tax Fraud Victims
itation, two accommodate residents
YOUR HEALTH
with ALS, and one
12 | Part D Drug Denials
serves people with
TECHNOLOGY
multiple sclerosis.
13 | Cutting the Cable TV Cord
I met with Gallo
RETIREMENT LIVING
in late January in the
14 | Intergenerational Programs
nursing home’s café,
near the well-apYOUR FAMILY
pointed lobby. (The
16 | Moving Near the Grandkids
café offers residents
and visitors free coffee and home-baked pastries.) She smiled brightly as
she described her life there. Like elders in all Green
Houses, Gallo has her own bedroom and bathroom.
“Privacy is really respected,” she says. “If I want to
watch something on my TV, I will just shut the door.”
IN THIS ISSUE
A New Model for
Nursing Home Care
JOHN PATRICK THOMAS
it ’s a common refrain that adult children hear
from their parents: “No matter what, promise that
you’ll never put me in a nursing home.” These
seniors obviously have not visited a Green House, a
unique alternative to the traditional nursing facility.
Lois Gallo, 79, lives with nine other residents—
known as “elders”—in one of the 10 condominiumstyle homes at the Leonard Florence Center for Living,
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In a typical nursing home, two residents share a room.
The 10 bedrooms in her home surround a state-ofthe-art kitchen and a large dining table, where the residents usually sit together for meals. But you can “eat
when you want,” Gallo says. If she gets up early, a caregiver will whip up something she likes, often cereal
and toast. Just off the kitchen area is a cozy living room
with a fireplace—a group of visiting friends gather
there on Wednesday nights. Gallo enjoys trips to musicals, movies and the ballet. The facility, which is run
by the Chelsea Jewish Foundation, uses a half-dozen
wheelchair vans to take residents to these events.
I also spent a day at another Green House complex—Eddy Village Green at Cohoes, outside Albany,
N.Y., which is run by St. Peter’s Health Partners. Eddy,
which opened in 2008, is a development of 16 spiffy
ranch-style homes, each accommodating 12 elders.
When I walked into one of the Green Houses at
Eddy Village Green, several elders were watching TV
in the light- and plant-filled living room. A few feet
away, at the large open kitchen, two caregivers were
preparing lunch while another was setting the large
wooden table. There were no nurses’ stations or carts
clattering down long hallways—as I’d seen at hospitallike nursing facilities. The atmosphere was the same
at Leonard Florence. “When you walk into a Green
House, it’s a home,” says Betsy Mullen, chief operating
officer of the Chelsea Jewish Foundation. “You feel a
calmness, a peacefulness.”
But it’s more than the physical ambiance that distinguishes a Green House from a traditional facility,
says Scott Brown, director of outreach for The Green
House Project, which provides guidance to nonprofits
and businesses that seek to build Green Houses. Elders
at Green Houses tend to get more individualized attention than residents at traditional facilities. And elders,
perhaps with the exception of those with severe dementia, make many decisions themselves, such as wakEDITOR IN CHIEF AND PUBLISHER
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2 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
ing up and going to bed when they want, and choosing
activities they like, such as planting flowers by the patio. “When you diminish someone’s decision-making
ability, you take away who they really are,” Brown says.
The Green House is the brainchild of Dr. Bill Thomas, a geriatrician who came up with the concept to alleviate the “three plagues” of nursing-home life—loneliness, boredom and helplessness. The Green House
“goes to the idea that regardless of age people still have
a chance to have a meaningful life where they can experience joy and create value,” Brown says.
There are 187 Green Houses operating in 28 states,
with 150 more under development. Most complexes
range in size from two to six Green Houses. (To look
for a Green House in your community, go to www
.thegreenhouseproject.org.)
Research shows that Green House elders are happier and healthier than residents in traditional nursing homes—even though they have similar conditions,
such as dementia, post-stroke ailments, Parkinson’s
disease and heart disease. They’re less likely to become
hospitalized or to experience declines in their ability to
eat, dress or go to the bathroom on their own.
Building Connections: Elders, Aides and Relatives
In a traditional nursing home, it’s all about efficiency—
perhaps six or seven aides dressing, feeding and moving 40 residents on a schedule. To pick up the pace, an
aide may start feeding a slow eater or use the wheelchair for a person who walks too slowly to the dining
room. Because this system promotes “forced dependency,” skills may deteriorate, says Diana Lloyd, director of nursing at Eddy Village Green.
At a Green House, the number of staff providing
direct care is higher—about three certified nursing assistants are permanently assigned to each house of 12.
This aide is known as a Shahbaz (the plural is Shahbazim), which is Persian for royal falcon. Working as a
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FROM THE EDITOR
The Green House—the innovative nursing home that’s
the focus of our cover story—is part of a larger “culture
change” movement that seeks to transform the way
we provide long-term care. Central to the movement is
the idea that older people, even those with the biggest
challenges, have the ability and right to lead creative
and dignified lives.
The creator, geriatrician Dr. Bill Thomas, talks about a
stage in life after adulthood called Elderhood, which he
says is “rich and it’s deep and it’s meaningful.” And he
expects the huge baby boom generation will “defy the
practice of ageism by redesigning the way we age.”
Thomas is taking his message to 30 cities this year
on what he calls The Age of Disruption Tour, a combination lecture and musical bus tour that he says will disrupt our understanding of aging. (See if the tour is visiting your community at www.drbillthomas.org.)
If you can’t see his lecture, visit Thomas’ blog (www
.changingaging.org). His writings, and those of guest
writers, should offer youth-obsessed boomers a positive view of what could lie ahead.
Susan B. Garland, Editor
team, the Shahbazim order and prepare food, do light
housekeeping, and plan schedules and activities.
Even when a Shahbaz is preparing a meal, she may
be chatting with an elder or watching over an activity. “In the traditional nursing home, you don’t have
time to develop the relationships that you have in these
homes,” says James Farnan, administrator of Eddy Village Green. “When you have the same group of people taking care of the same group of elders, you get to
know what they like and don’t like.”
These aides undergo 128 hours of training in addition to their nursing training. They learn the Green
House “core principles” of building team skills and developing loving, respectful relations with elders. The
aides also learn how to cook healthy meals.
I met with Maria Fana, a Leonard Florence Shahbaz, after a tasty salmon lunch. She’s been there since it
opened in 2010, after 17 years at another Chelsea Jew-
ish Foundation nursing home. While she says the other facility was well run, “Wow, what a difference. The
residents there had to run for their life—wake up, take
a shower, everyone eat breakfast,” she says. “Here, you
take time to give good care. It’s calm.”
Shahbazim learn about all facets of an elder’s life—
their childhood, careers, children, and likes and dislikes. “If we know who the elders were before they
came here and who they are now, it’s easier to make
them feel more comfortable,” says Lakiya Hall, who
has worked at Eddy Village Green for five years.
Hall says the elders and aides become so close that
when one Shahbaz received his degree as a registered
nurse, the elders were taken by a wheelchair-accessible
van to his graduation. “They were so excited and happy, and he was ecstatic,” she says.
At Eddy Village Green, Shahbazim choose an “Elder
of the Month” for each house. With help from the elder and family members, the caregivers create a poster
board with childhood photos, family pictures and
information on the elder’s life milestones and hobbies.
The house and the families celebrate with a party.
When I visited, Kay Neilson, 85, was the honoree in
her house, and her poster was on the wall outside her
room. “It’s an honor to be recognized,” says Neilson,
a retired high school secretary. She’s in a wheelchair
because she cannot use her legs.
Neilson says she represents her house on a residential council, which meets monthly and sometimes
suggests menu items. She enjoys the music and other
activities at the community center and sitting outside
in the courtyard. “I’m happy here,” she says.
Studies show that Green House caregivers suffer
less stress than those at traditional facilities. Eddy Village Green’s Farnan says turnover among certified
nursing assistants was 19% in 2014, compared with
50% at the nursing home he ran on the property before
it was demolished and the Green Houses opened.
Similarly, says Leonard Florence’s Mullen, “it’s always our mission to take care of our staff if they are
taking care of our residents.” The facility operates a
“company store” where staff can get enough fresh produce and other food to feed their own families for several days a week—at no charge.
Like their loved ones, family members are close to
the staff. Relatives can visit at any time and often share
meals at the dining table. Families have even used Eddy’s community house for wedding receptions and
grandkids’ graduation parties—so Mom or Dad doesn’t
have to travel far to celebrate.
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
|3
My discussion with a group of five daughters of elders at Eddy seemed to confirm academic studies that
Green House families are happier with the care their
loved ones receive than are relatives of residents at
traditional nursing homes. Their parents all lived in
House 16. Besides regular visits, there are parties for
residents and families—Christmas parties where the
grandkids decorate the house tree and barbeques on
the patio. On Halloween, neighborhood kids travel
from one Green House to another collecting candy.
I was struck by their enthusiasm and laughter as
they shared stories—an excitement you wouldn’t expect from loving daughters whose parents were in a
nursing home. But their relief was palpable.
Karen Diener’s dad had made the progression from
independent living to assisted living. When it was time
for a nursing home, she says, his only request was that
she find a place with a private room. Luckily, she says,
there were openings at Eddy. Diener says, “When we
pulled up, they had the whole welcome wagon sort of
thing. It met all of his criteria more than he imagined it
could.” A plus: He plays the organ, and there happened
to be one on campus that was moved into his house.
The women say the elders watch out for each other—much like family members would. Carol Connolly, whose mother is deaf, says that when she visits, another resident, who lives across the hall, “will tell me
things about my mother” to keep Connolly up to date.
The family members get to know the other elders
well. Diener says that one of the elders who has dementia “adopted me as her best friend.” After she visits
her dad, she stops by to see the other elder for a bit.
Although there are downtimes, the women seemed
astonished by how happy their parents seem to be. “My
mother says she loves it here, and she is very picky,”
Connolly says. “She’s said, ‘Everyone takes good care of
me, so don’t worry about me.’ ”
The Future of the Green House
More than 10 years ago, it was time to tear down or
renovate aging buildings in Cohoes that included 177
skilled-nursing beds and other senior health services,
says Farnan. Rather than “spend millions of dollars to
create a place no one wants to be,” he says he decided
to go with the Green House model.
Farnan says that per-bed operating costs did not rise
when Eddy Village Green opened. And while the number of full-time employees is the same, he says, “the
proportion has shifted heavily to direct care.” That’s
in part because Green Houses can eliminate the labor4 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
intensive central kitchen and laundry—services the
Shahbazim now provide.
While the Green House may be the ideal, the model is just a tiny portion of all nursing-home beds. When
all the Green Houses under development are completed, there will be a total of 3,500 beds in the U.S.—compared with 1.5 million beds in traditional homes.
It’s unlikely there will be a wholesale transformation of existing facilities into Green Houses. While operating costs are similar, capital costs can be enormous.
“It’s more expensive to build 10 bedrooms and 10 bathrooms for 10 people than it is to build shared bedrooms
and bathrooms,” Brown says.
The daily private-pay rates—$433 for Eddy Village
Green and $495 for Leonard Florence—are on the high
end for private-room beds in their metropolitan areas,
but not the highest. Forty-two percent of Green Houses’ residents are on Medicaid—somewhat less than in
traditional homes, Brown says. The states’ Medicaid
reimbursement rates do not take into account the cost
of the extra square feet for individual bedrooms. Thus,
private-pay patients and other funding sources subsidize those lower-income residents.
As nursing-home operators renovate or tear down
aging buildings, a number will go to full Green Houses, but it’s more likely that they will incorporate some
elements of the model. Exhilarated by the success of
Leonard Florence, Barry Berman, chief executive officer of the Chelsea Jewish Foundation, is now turning his attention to a $14 million renovation of his 120bed traditional Chelsea Jewish Nursing Home. The
foundation does not have the funds to turn the facility into full-fledged Green Houses. But, Berman’s son
Adam, who is president, says the project “is still a radical transformation.”
Rather than 40 residents to a floor, there will be 20
residents in six units, each with its own kitchen, family
dining tables, living room and fireplace. Cooks will prepare home-cooked meals on site. There will be three
or four Shahbazim for each house—not as many per
resident as at a Green House but better than the current staffing ratio. The renovation calls for shorter hallways, more glass and natural light, and new furniture.
Two residents will still share a room.
Barry Berman says while the renovation is not as
extensive as a Green House, “we designed what we
would want for ourselves and our families.” And he
says combining Green House values with architectural changes in this way can be a model for others in the
nursing industry. K SUSAN B. GARLAND
Cordes, co-founder of ImpactAssets. Investors should
scrutinize how each manager measures and reports
social and environmental benefits.
Boost Social—and Financial—Returns
INVESTING
Investments With
A Social Impact
ISTOCKPHOTO.COM
can your portfolio make the world a better
place? Major Wall Street firms as well as much
smaller organizations are rolling out new investments designed to have a positive social or environmental impact. These “impact investments” range from
bonds that help fund community projects in specific
cities to broad stock funds holding companies that get
top marks for corporate and social responsibility.
Fund manager BlackRock, for example, last year
launched the Impact US Equity Fund, which holds
companies scoring high on the firm’s own health,
environment and corporate citizenship metrics. And
nonprofit financial services firm ImpactAssets recently launched “impact investment notes” focused on sustainable farming and microfinance.
Impact investing assets climbed to $109 billion
in 2014, up from $86 billion in 2012, according to the
Global Sustainable Investment Alliance. People are
starting to “expect more from an investment portfolio
than just the financial return,” says Hilary Irby, a managing director and head of investing with impact at
Morgan Stanley.
But there are challenges for investors. Many investments in this niche lack a long-term track record. And the definition of “impact” can be subjective.
While there are efforts to standardize how impact is
measured, those are still a work in progress, says Ron
Impact investments are part of the universe of socially
responsible investments. But traditionally, most socially responsible investments simply screened out certain
stocks or industries, such as those related to alcohol,
tobacco or weapons. Impact investing is “intentionally looking to make an investment that has certain social
or environmental returns,” says Justin Conway, vicepresident of investment partnerships at the Calvert
Foundation, which offers impact investments.
Socially concerned investors are gaining access to
new data that can help guide portfolio decisions. Last
year, for example, the Governance and Accountability Institute found that 75% of companies in Standard &
Poor’s 500-stock index had published a sustainability
or corporate responsibility report, up from 20% in 2011.
And investment-research firm Morningstar is rolling
out “sustainability ratings” that grade mutual funds
and exchange-traded funds on their portfolio holdings’
environmental, social and governance practices.
Studies suggest socially conscious investors don’t
have to sacrifice returns. Analyzing seven years’ worth
of performance data for more than 10,000 mutual
funds, a recent study by Morgan Stanley found
that such funds tend to deliver slightly higher returns
and lower volatility than their traditional rivals.
Fund investors can find broad impact investments,
such as the new BlackRock fund, as well as funds focused on narrow themes. Both BlackRock and State
Street, for example, offer ETFs tracking the MSCI
ACWI Low Carbon Target Index, which overweights
companies with low carbon emissions.
Fixed-income investors can choose among bonds
focused on themes such as fair trade and women’s empowerment. Using Vested.org, an investment platform
launched by the Calvert Foundation in 2014, you can
choose a specific theme, such as services for the aging. The money you invest will be lent to organizations
working in that area, such as services that provide
meals to homebound seniors. You’ll receive annual interest payments that vary by maturity. A one-year note
pays 0.5%, while a 10-year note pays 3%.
Even this relatively conservative impact investment
has its risks. There’s no guarantee you’ll get your principal back—although so far, the notes have maintained
a 100% investor payout, Conway says. K ELEANOR LAISE
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
|5
MANAGING YOUR FINANCES
End Looms for Benefit Strategies
6 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
What to Do If You Are Told No
Understand the rules before you apply. If you think
you qualify for these strategies but are told otherwise
by Social Security representatives, refer the representative to the agency Web page with the details. If that
doesn’t work, ask for a supervisor. In our experience
over the years, readers who have asked for a supervisor
have been able to get their claim problems resolved.
But “if that does not resolve the problem, insist on
filing so you can get a formal decision. Social Security
cannot refuse to take your claim,” says Jim Blair, a former district manager for an Ohio Social Security office
and a partner at Premier Social Security Consulting, in
Sharonville, Ohio.
Be sure to ask for the full name of each person you
talk to and keep a record of what they told you, Blair
says. “If you can show misinformation by a government
employee, Social Security can go back to your first contact and approve benefits,” he says.
Another option if you keep getting told no: You
can visit your local Congressional office and request
its assistance. Blair says each office has an employee
who works with Social Security.
Tech-savvy applicants can go online to put in their
request to file and suspend benefits. Be aware that
there is no “file and suspend” option to click on the
online application. Instead, you must note in a “comments” box that you want to file and immediately suspend your benefit. If you don’t add that comment, Blair
says, you could miss the opportunity to use that strategy, even if you apply by April 29. K RACHEL L. SHEEDY
ISTOCKPHOTO.COM
the clock is ticking down for those who are still
eligible for at least one of two popular Social
Security claiming strategies that Congress nixed
about five months ago. And now you have new ammunition if a confused agency representative rejects your
valid application.
Those who are full retirement age or older as of
April 30 must submit a request to “file and suspend”
a benefit by April 29 to use the old rules. This strategy allows a worker at full retirement age to file for his
benefit, enabling his spouse to collect a spousal benefit or a minor child to collect a benefit on the worker’s
earnings record. The worker then suspends his benefit,
allowing it to accrue delayed retirement credits of 8%
a year until he reclaims it up until age 70.
Also, those who were age 62 or older as of January 1,
2016, are still eligible to use the “restricted application”
strategy to file for a spousal benefit once they hit full
retirement age. With this strategy, a spouse can claim
just a spousal benefit while his own benefit grows.
Although Kiplinger’s Retirement Report has kept you
up to date on the changes, it was only recently that the
Social Security Administration posted details on its
Web site (www.ssa.gov/planners/retire).
Referring to the Social Security Web site can be
helpful if an agency representative rejects your application. Shortly before the Social Security Administration released information to the public, it had sent instructions on the law changes to its staff. But even
many representatives apparently remained confused.
Kiplinger reader Joe Neiner, 66, of Cumming, Ga.,
says he and his wife, Helen, 65, planned to delay collecting their own benefits until they each turn age 70.
Helen would file a restricted application, thus claiming
a spousal benefit, when she turns full retirement age at
66; that will enable her to collect four years of spousal
benefits until she turns age 70. But Helen can’t file for
a spousal benefit unless Joe files for his own benefit.
The solution: Joe will file and suspend his benefit now,
before the strategy ends.
However, Joe says, when he recently tried to apply for benefits using the file-and-suspend strategy,
an agency representative told him that he and Helen
could not use these maneuvers—although both spouses
clearly fall within the age deadlines under the new law.
The agency later got back to him, acknowledging that
they made a mistake.
FROM THE MAILBOX
Your Questions Answered
A
Earned Income Not Needed
For HSA Contributions
I recently stopped working and
will be living off my savings. Can
I continue contributing to my
health savings account, or do I
need earned income to do that?
Unlike IRAs, for which you (or your spouse) need
earned income in order to be eligible to contribute,
there is no such requirement for HSAs. You do, of
course, need to be covered by an HSA-eligible highdeductible health insurance policy. Contributions are
not permitted after you enroll in Medicare.
Q
The Downsides of 401(k) Loans
My son is thinking of taking a loan from his 401(k) to pay
some expenses. He says it’s a no-lose proposition because
the interest he’ll pay on the loan will go into his account.
Is he right?
He’s correct that the interest will go into his 401(k),
and there are times when it makes sense to take a
401(k) loan—perhaps to pay off credit cards that are
charging a higher interest rate than you’d pay on the
loan. But there are downsides to consider. If the interest rate is less than what the liquidated 401(k) investments would have earned, he will be falling behind.
And because it’s unlikely that he will be contributing
while the loan is outstanding, his nest egg will take an
additional hit. Also, he’ll be repaying the loan with after-tax money, so he will be taxed twice when he withdraws that cash in retirement. Be sure your son realizes that if he leaves his job for any reason, he will
have to pay the loan back, typically within 60 days. If
he doesn’t, he’ll owe taxes on the balance—plus a 10%
penalty if he’s younger than 55.
Social Security Benefits Cut for Public Pensioners
When my husband died, I was expecting to receive a
Social Security survivor benefit based on his work record.
But the Social Security Administration told me that I’ll
only get a small portion of it because I receive a state government pension. What’s going on?
You are getting hit by the “government pension offset,”
or GPO. Usually, a survivor gets up to 100% of a worker’s Social Security benefit (if that’s higher than his or
her own benefit). But if you get a public pension, the
GPO rule will reduce or even eliminate a survivor
benefit by two-thirds of the public pension amount.
Say your late spouse worked his entire life in the private sector and had a $2,500 Social Security monthly
benefit when he died. If you’re getting a public pension
benefit of $2,000 a month, your Social Security survivor benefit will be $1,167. (That’s $2,500 minus $1,333,
which is two-thirds of $2,000.)
Retiree Health Coverage Secondary to Medicare
I retired from my job at age 62 and went on my employer’s retiree health plan, which lasts until I am 70. I am
turning 65 in the summer. Can I delay my application for
Medicare?
Retiree health benefits generally do not provide full
coverage once you turn 65. You should apply for both
Medicare Part A, which covers inpatient services, and
Part B, which covers outpatient services. You should
apply during your seven-month “initial enrollment
period,” which includes the three months before the
month you turn 65 and the three months after. Retiree
health insurance changes once you’re eligible for
Medicare, according to the Medicare Rights Center. It is secondary to Medicare, which means it typically pays after Medicare pays. Even if your employer’s insurer agrees to pay the full amount, you could
run into trouble if you wait to enroll in Medicare until
age 70. You will have to pay a lifetime penalty for each
12-month period you delayed enrolling past 65. Plus,
you will not be able to apply for Part B until the first
“general enrollment period” after your retiree health
coverage ends. That period runs from January 1 to
March 31, with coverage starting July 1.
Paying the Management Fee for an IRA
I use an adviser to manage my IRA. Should I pay the
management fee from inside the account or outside?
It depends. If you’re trying to increase the value of
your tax-deferred account, pay the fee with outside
money. In that case, the fee will count toward miscellaneous expenses, which are deductible if they exceed
2% of adjusted gross income.
If you’re trying to reduce future required minimum
distributions, you can pay using the money from inside
the IRA, and the payments will not count as a taxable
distribution. K
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
|7
Information to Act On
n
Housing prices. With healthy
sales of existing homes and supply constraints, house prices have
climbed in some areas, particularly
the West. Portland, San Francisco
and Denver have continually posted
high year-over-year price increases.
Price increases could slow if more homes come on the market
this year, as expected. On average, home prices should rise at a
moderate pace of 5% in 2016.
n Inflation rising. Inflation is expected to climb, though at a
modest rate. Core inflation, which excludes food and energy, will
rise to about 2.3% in 2016, above 2.1% in 2015. Prices for medical
care will rise 3.4%, from 3%; shelter, 3.4%, from 3.2%; and food,
1.4%, from 0.8%. A steady upward trend in the core inflation
rate is likely to spur the Federal Reserve to raise interest rates
once or twice this year.
INVESTING
New funds. Vanguard is launching two new dividend-oriented
international stock index funds. Vanguard International High
Dividend Yield Index Fund focuses on companies with high dividend yields, and Vanguard International Dividend Appreciation
Index Fund focuses on developed and emerging markets stocks
that have a record of dividend growth.
n Warren Buffett live. For the first time, Berkshire Hathaway
will live stream its annual shareholders meeting on April 30.
Yahoo Finance (www.finance.yahoo.com) is hosting, with coverage starting at 10 a.m. eastern time.
n
TAX TIP
Last Minute IRA Contribution
Taxpayers still have time to stash money into
an IRA for the 2015 tax year. And with extended
deadlines this year, there’s extra time to do so.
Most taxpayers have until Monday, April 18,
to file federal tax returns and contribute up to
$5,500 to an IRA for 2015, or $6,500 if you are
50 or older. Maine and Massachusetts residents
have until Tuesday, April 19.
Keep in mind that as you top off IRA contributions for 2015, you can stash up to the same
amounts for the 2016 tax year at the same time.
8 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
TAXES
n
Penalty relief. If you miss paying your federal taxes on time
and face penalties, check if you qualify for the IRS’s “first time
abate” program before you pay the fines. A one-time waiver, the
IRS will forgive penalties for those who pay the tax due and who
have complied with filing and payment obligations for the previous three years. You’ll need to ask for the waiver with a written
note when you file your return, or with a telephone appeal after
you receive a penalty notice.
BANKING
FDIC limits. To make sure your money is fully covered by
the Federal Deposit Insurance Corp., use the “Electronic Deposit
Insurance Estimator” tool at www.fdic.gov/edie. The FDIC
insures up to $250,000 for an individual account per bank.
It also covers up to $250,000 for each person’s share of a
joint account, and up to $250,000 in deposits in retirement
accounts, such as IRAs, at each bank.
n Abuse prevention. As part of its BankSafe initiative, the
AARP Public Policy Institute has issued a report looking at
measures financial institutions are taking to fight exploitation
of seniors. They include watching out for scams and enabling
caregivers to monitor accounts for irregularities. Go to www.aarp
.org to read Snapshots: Banks Empowering Customers and Fighting Exploitation.
n
HEALTH CARE
IRS ruling. A new IRS ruling allows certain retirees to qualify for
health insurance subsidies under the
Affordable Care Act. Workers who
have access to employer-sponsored
coverage can’t get the subsidies if
they forgo the employer plan to buy
health insurance on the exchanges.
But retirees who are under age 65 and meet income limits do
qualify for the subsidies, even if they are eligible for their former
employer’s plan.
n
LONG-TERM CARE
Costs. The average annual cost for long-term-care insurance
fell for single men and couples in 2016, but rose for single women,
says the American Association for Long-Term Care Insurance.
The average cost for a policy, with coverage that grows 3%
compounded annually, for a single man age 55 dropped 1.9%, to
$2,035. For a couple both age 60, the cost fell 9.4%, to $3,560.
But for single women age 55, similar coverage rose 7%, to $2,580.
n
ISTOCKPHOTO.COM (3)
ECONOMY
Rates and Yields
Certificates of Deposit
RETIREMENT LIVING
n
Second act. The Purpose Prize,
which for the past 10 years has
awarded six-figure cash prizes to
people age 60 and older for significant social impact work, is moving
to a new home. Launched by nonprofit Encore.org in 2005, the prize
is moving to AARP and will now be open to people age 50 and
older. Go to www.encore.org/prize.
FINANCIAL ADVISERS
Misconduct. About one in 13 financial advisers have a
misconduct-related disclosure on their record, according to
University of Chicago researchers who reviewed records of 1.2
million advisers registered in the U.S. from 2005 to 2015. About
half of those who engage in misconduct lose their jobs, but 44%
are reemployed in the financial services industry within a year,
according to The Market for Financial Adviser Misconduct.
n Human vs. tech. Although 75% of Americans say they think
there are benefits of robo-advised investing, 52% of investors
say they prefer using a human financial adviser, according to a
survey by Capital One Investing. When there are market fluctuations, three-fourths of investors say they would prefer advice
from a human adviser.
n Find an adviser. Web site GuideVine offers consumers a
way to shop online for a financial adviser. Filter your search by
location; certain specialties, such as estate planning or socially
responsible investing; and compensation method. Based on
your criteria, a list of advisers will pop up, along with their
background information. The Web site also offers free assistance
by phone.
SIX MONTHS
YIELD
AloStar Bank of Commerce (Ala.)
Live Oak Bank (N.C.)
National Average
1.01% 877-738-6391
1.00 866-518-0286
0.17%
PHONE NUMBER
ONE YEAR
YIELD
Connexus Credit Union (Wis.)*
Live Oak Bank (N.C.)
National Average
1.33% 800-845-5025
1.30 866-518-0286
0.28%
YIELD
FIVE YEARS
First Internet Bank of Indiana (Ind.)
Colorado Fed Savings Bank (Colo.)
National Average
PHONE NUMBER
PHONE NUMBER
2.27% 888-873-3424
2.15 877-484-2372
0.83%
*Must be a member of the credit union. Yields include compounding and are as of March
11, 2016. For information on deposit insurance, go to the Web site of the Federal Deposit
Insurance Corp. (www.fdic.gov). SOURCE: Bankrate.com
n
TRAVEL
Timeline. Travel Web site TripAdvisor launched a feature
called “Travel Timeline” on its mobile app. If you turn on the
feature, it will create a log of the places you visit on your trip
and the photos you take at each location. Only you can see
the timeline, but you can share it with family and friends.
Go to www.tripadvisor.com.
n
ANNUAL INDEX
2015 articles. Looking for an article from last year? You can
find it with Retirement Report’s Articles Index for 2015. Send
a note to retire@kiplinger.com to get a copy e-mailed to you.
Subscribers who have signed up for free electronic access at
KiplingerRetirement.com can download a copy.
n
Top Yielding Money-Market Funds
TAXABLE
YIELD PHONE NUMBER
Vanguard Prime MMF Inv
Vanguard Federal MMF
Category Average
0.39% 800-662-7447
0.30 800-662-7447
0.10%
TAX-FREE
YIELD PHONE NUMBER
PNC Tax-Exempt MMF/A*
American Century Tax-Free Inv*
Category Average
0.02% 800-622-3863
0.01 800-345-2021
0.01%
*Fund is waiving all or a portion of its expenses. The 30-day simple yields are to
March 8, 2016. SOURCE: Money Fund Report
High-Dividend Stocks
We used Kiplinger.com’s stock-finder tool to screen stocks for at
least five years of consecutive dividend increases.
DIVIDEND STOCKS
YIELD
SHARE PRICE
AT&T (T)
Verizon Communications (VZ)
Southern Co. (SO)
5.0%
4.3
4.4
$38
52
50
Benchmarks
THIS MONTH 3 MONTHS AGO
Inflation rate*
Six-month Treasury
One-year Treasury (CMT)**
Ten-year Treasury
1.40%
0.50
0.69
1.93
0.20%
0.55
0.71
2.24
YEAR AGO
-0.10%
0.10
0.25
2.14
*Year-to-year change in CPI as of January 2016, October 2015 and January 2015.
**Constant Maturity Treasury yield.
Fixed Annuities
SINGLE-PREMIUM IMMEDIATE-ANNUITY
MONTHLY PAYOUT FACTOR
HIGHEST
AVERAGE
Male age 65
Female age 65
Male age 70
Female age 70
$5.45
5.12
6.10
5.74
$5.24
4.96
5.86
5.52
Payouts are guaranteed to the annuitant for life, with a minimum payout period
of ten years. Payout factors are per each $1,000. SOURCE: Comparative Annuity Reports
(www.comparativeannuityreports.com). Data are to March 1, 2016.
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
|9
MANAGING YOUR FINANCES
Replace 80% of Preretirement Paycheck?
if you have sought advice on how much to save for
retirement, you’ve likely run across the “80% rule.”
For a secure retirement, the theory goes, you
should aim to replace roughly 80% of your preretirement paycheck with portfolio withdrawals, Social
Security, pensions and other sources of income.
Yet recent studies suggest that the 80% rule may be
way off the mark for many retirees. People approaching retirement may want to abandon the idea of income-replacement rates altogether, focusing instead
on how much they’re likely to spend in retirement.
To maintain their standard of living in retirement,
many people don’t need to replace 80% of their gross
income, according to researchers. That’s because they
lived on far less than that amount during their working years, when they were making retirement-account
contributions and in many cases paying heftier tax bills
than they’ll pay in retirement. And since most people don’t move straight from full employment to full
retirement but instead move through some period of
part-time work, unemployment or disability, it can be
difficult to even sort out what should be counted as
“preretirement” and “post-retirement” income when
calculating an income-replacement rate.
The 80% rule is “imprecise and encourages people
to save an amount of money that may not be needed for
spending in retirement,” says Michael Finke, professor
of personal financial planning at Texas Tech University. What’s more, he says, it “may create a sense of anxiety among workers whose current savings may seem
woefully inadequate.”
Some advisers say a 70% to 80% income-replacement rate is still a good guideline, particularly for people who are years from retirement. T. Rowe Price, for
example, suggests that savers aim to replace 75% of
preretirement income. Since the firm suggests workers
stash 15% of their salary in retirement accounts, and
taxes tend to be lower in retirement, a 75% replacement rate should allow retirees to maintain their lifestyle, says Judith Ward, a senior financial planner at
T. Rowe Price. But as you get closer to retirement, she
says, “it’s important to sit down and figure out what
you truly will need in terms of managing expenses.”
Hitting the 80% income-replacement mark may
seem especially daunting in an era of low interest rates.
Given current annuity rates, for example, a 65-year-old
10 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
man can generate about $33,000 of annual income for
every $500,000 he has saved. So “if they think they’re
supposed to replace 80% of gross income, you can see
why many savers might be discouraged,” Finke says.
Many Expenses Decline in Retirement
The good news: Many retirees can be happy spending
far less than 80% of their preretirement income. Indeed, the top 20% of earners spend only about 40% of
their gross income in the year before they retire, Finke
says. Expenses that decline or disappear when you retire include not only retirement-account contributions
and Social Security and Medicare taxes but also workrelated expenses, such as commuting. Other big-ticket
expenses may also fade out, such as kids’ tuition bills.
Plus, you may have a higher standard deduction and
get a greater share of your income from sources, such
as Social Security, that are taxed more favorably than
your work paycheck. In a 2014 T. Rowe Price survey,
retirees said they were living on
66% of their preretirement income, on average—and most said
they were living as well or better
than when they were working.
But personal factors, such as
how much you’re contributing to
your 401(k) plan, can make a huge
difference in the income-replacement
rate you need to maintain your lifestyle
in retirement. Couples may need to replace anywhere from 54% to 87% of their
preretirement income, depending on such
individual factors, according to a study by
David Blanchett, head of retirement research
at investment-research firm Morningstar.
Consider a couple where one spouse
earns $100,000 and the other earns $50,000.
They’re spending 15% of their income on pretax expenses, such as 401(k) contributions, that
will disappear when they retire. They’re spending another 12% of income on post-tax expenses, such as Roth IRA contributions, that they’ll
no longer incur when they retire. To have the
same after-tax income when they retire, they
need to replace only 55% of their preretirement
income, according to Blanchett’s study.
A couple earning the same amount but making no
pretax retirement contributions and spending only 3%
on post-tax costs such as commuting, however, needs
to replace 80% of their preretirement income. “The
more you save for retirement, the lower your replacement rate,” Blanchett says. Replacement rates will also
vary with income level. Lower-income households
generally have higher replacement rates because they
tend to pay lower taxes during their working years,
according to Blanchett’s study.
Health care spending is a wild card for retirees.
Still, rising health care costs in later years won’t necessarily torpedo their plans. Although health care spending may become a bigger part of total spending later
in retirement, Finke says, overall spending still tends
to decline during retirement. To get a firmer grip on
health costs, use a realistic life expectancy estimate
when calculating your total retirement spending—rather than, say, a fixed 30-year period—and consider longterm-care insurance to cover the worst-case scenarios.
People looking for an accurate estimate of their retirement-income needs will have to tally how much
they’re likely to spend in retirement. If you’re on
the brink of retirement, you can use your current
spending as a starting point. Subtract expenses that will definitely disappear when
you retire, such as retirement-account contributions—and perhaps
your mortgage payment, if you’re
planning to pay off your mortgage. Consider other areas,
such as travel, where spending might increase when you
retire. But for most spending
categories, your expenses are
likely to be the same, Finke says.
“It’s very difficult to break your spending habits,” he says. When you go to the
grocery store in retirement, “you go to
the same aisles and buy the same things.”
Once you have a good estimate of your
retirement spending needs, you can add
up your Social Security, pensions and a
sustainable level of portfolio withdrawals
to see if your savings are on track. To find
out how much you can safely withdraw
from your portfolio while minimizing your
odds of running out of money, see “Return
Your Retirement Plan to Solid Footing” in
the December issue. K ELEANOR LAISE
MANAGING YOUR FINANCES
Tips for Victims
Of Tax Fraud
tax identity theft is a rising problem . if you
believe someone has filed a tax return in your
name—either because your return bounced back
or you received a notice from the IRS about a suspicious filing—your first step is to call the IRS Identity
Protection Specialized Unit at 800-908-4490.
Next, go to www.irs.gov and download Form 14039,
Identity Theft Affidavit. You can use this form for one
of two reasons. One is if you believe someone has filed
a return in your name. Or you can use the form if you
were the victim of identity theft unrelated to your federal taxes—say, someone applied for credit in your
name—and you’re concerned your taxes could be affected in the future. Mail or fax the form, along with
a paper copy of your tax return, to the IRS (instructions are on the form).
If a delay in receiving your refund will create a severe financial hardship, contact the IRS Taxpayer Advocate Service at www.irs.gov/advocate, says Aaron Blau,
an enrolled agent in Tempe, Ariz. The taxpayer advocate will intervene for taxpayers who demonstrate that
their need is urgent, he says.
When the case is resolved, you may receive an Identity Protection PIN (IP PIN) to use in the future when
you file your tax return. If someone tries to file a tax
return using your Social Security number and doesn’t
include this personal identification number, the return
will be rejected.
You can also request a copy of the fraudulent return
that was filed in your name. The bogus return should
help you determine how much of your personal information was stolen. The IRS says it will acknowledge
your request within 30 days, and it will either send you
a copy of the fraudulent return or ask you for more information within 90 days. The IRS could deny your request if the address on your request does not match the
address in your files. If you have moved, be sure to file
Form 8822, Change of Address.
If you’ve been a victim of tax fraud, take other steps
to prevent thieves from hijacking your identity. Contact one of the three main credit bureaus—Equifax,
Experian or TransUnion—and have a fraud alert put
on your account. (The credit bureau you contact will
alert the other two.) K SANDRA BLOCK
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
| 11
Fight Back When
Drugs Are Denied
you make a routine trip to the pharmacy to fill
a prescription. But the pharmacist tells you your
Medicare drug plan won’t cover the drug. You
walk away with no medication—and no clear explanation about why you were denied coverage.
More and more seniors are finding themselves in
this confusing and potentially dangerous situation, patient advocates say. Questions about pharmacy-counter denials—and what to do next—are among the most
common issues raised by callers to the Medicare Rights
Center’s national helpline, says Joe Baker, the center’s
president. “The problem of pharmacy denials and people being confused by Part D prescription-drug coverage is a growing trend,” he says.
Seniors who are denied coverage at the pharmacy may pay out of pocket for increasingly unaffordable
drugs—or, even worse, go without needed medication.
They may need to make several calls to their drug plan
to find out the exact reason coverage was denied and
then navigate a complex appeals process to seek a reversal. But persistence often pays off: In 2013, nearly
80% of denials that were appealed were subsequently
approved, according to the U.S. Centers for Medicare &
Medicaid Services.
Drug denials are rising in part because Medicare
drug plans aiming to control costs are imposing “utilization management restrictions” on a growing number of drugs. These restrictions include step therapy,
which requires you to try a cheaper alternative before
12 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
a pricier drug; limits on the quantity of a drug that your
plan will cover in a certain time period; and prior authorization, which means your plan must give approval
before the prescription is filled. Such restrictions were
applied to 39% of drugs on Medicare drug plans’ formularies in 2015, up from 18% in 2007, according to
the Kaiser Family Foundation.
In other cases, coverage is denied because the drug
is not on your plan’s formulary. Each fall, review your
plan’s annual notice of change, which explains how
coverage and costs are changing in the coming year.
Also call the plan to make sure specific drugs you take
are still on the formulary and not subject to any new
coverage restrictions. You can switch drug plans during Medicare open enrollment, which runs from October 15 to December 7 each year.
If a drug you’re taking is dropped from your plan’s
formulary, or you change to a plan that doesn’t cover
the drug, you are entitled to a one-time “transition
refill”—typically a 30-day supply of the drug.
Appeal the Plan’s Denial
Don’t take the pharmacist’s “no” as your final answer.
Take note of the drug name and dosage that you were
prescribed, the name of the pharmacy, and the date
when you tried to fill the prescription. Then call your
plan and ask for a “coverage determination”—a written
explanation of the coverage decision.
The plan generally has 72 hours to respond. But you
can ask for an expedited decision, which requires the
plan to respond within 24 hours, says Diane Omdahl,
president of 65 Incorporated, a Mequon, Wis., firm that
helps seniors navigate Medicare.
If the plan tells you that the drug is not on the formulary or that it’s subject to a restriction, you can ask
for a coverage “exception.” In this case, your doctor
must write a supporting statement. “It has to really explain why this drug and no other is what the patient
needs,” says Jocelyne Watrous, an advocate at the Center for Medicare Advocacy. The 72-hour clock won’t
start ticking until the plan gets the doctor’s statement.
If the coverage determination is not in your favor,
you have 60 days to ask for a “redetermination,” the
first level of appeal. If significant dollars are at stake,
you can pursue several more levels of appeal—and
ultimately have your case heard in federal court. Since
in many cases denials are inappropriate, “our advice
to clients is always to push back,” Baker says. “When
we do that, we find that people get the coverage.” K
ELEANOR LAISE
ISTOCKPHOTO.COM
YOUR HEALTH
TECHNOLOGY
Cut Cable Bill
By Streaming TV
ISTOCKPHOTO.COM
love tv , but tired of getting big monthly bills
from your cable company? You may be able to
reduce your costs without sacrificing much in
the way of programming by dumping your cable (or
satellite) system. Instead, you can handpick services
that will “stream” movies, TV shows and many of your
favorite stations from the Internet right to your TV.
About 15% of Americans have dropped cable, according to a recent study by the Pew Research Center.
Many of these so-called cord cutters say the availability
of TV and movie content from the Internet was a factor
in ending their cable service. Whether you love the old
movies on TNT or house fix-ups on HGTV, you’ll likely
find a service that plays your favorites.
But cord cutting is not simple. You must make
sure you have a reliable high-speed Internet connection. And you’ll need to pay upfront for a streaming device or buy a “smart TV” and an antenna. Plus, you will
have to spend considerable time sorting through the
numerous services that provide the content you want.
If you have a TV, you probably already have coaxial
or fiber optic cable wiring coming into your house. And
if you also have a landline phone and Internet service,
you may be paying a “bundled” price for the phone, Internet and pay TV. Once you cut the cord, you’re just
dropping the TV service (which may run from $75 to
$100 a month), and you should negotiate with your cable company on a good price for your Internet and
phone service. You’re probably already spending
about $60 a month for your Internet connection.
You’ll also need to make sure that your Internet
connection is fast enough to accommodate streaming.
If your broadband is too slow, you’ll encounter a lot
of “buffering”—that’s when a video feed keeps pausing
and restarting. Ask your current provider—or you can
find a new one—for speed of at least 25 Mbps. Comcast’s Xfinity service offers 25 Mbps for $40 per month
for one year. Prices may vary by region.
You also need to buy a device that streams the content to your TV from the Internet via a wireless router. You can either buy a streaming box, which hooks to
your TV by cable, or a “stick,” which resembles a USB
drive and plugs directly into an HDMI port on your TV.
A popular brand is Roku, which sells four streaming boxes, offering different features. If your older TV
lacks the HDMI port, Roku 1 ($50) also connects to
RCA plugs—those red, yellow and white ports on
older sets. The Roku 3 ($100) adds a voice-controlled
remote with a headphone jack. For streaming sticks,
consider the Roku Streaming Stick ($50). An alternative is the Amazon Fire TV Stick, which comes in two
versions—one with a standard remote ($40) or a voice
remote ($50), which lets you search movies, shows,
actors and genres by speaking into a mic on the device.
Another option is to get a “smart TV” with integrated wireless and streaming apps. “If you’re about to get
a new TV, the best solution is a TV with streaming built
in,” says Lloyd Klarke, Roku’s director of product management. Many manufacturers offer smart TVs, including Samsung, Sharp and Sony. Consider an Apple TV
if you have a large iTunes music and video library.
Choosing Your Programming
Before you cut the cord, you need to decide which
programming is most important to you. You may be
able to recreate your cable experience—or get pretty close—by subscribing to a select group of streaming
channels. But sign up for too many services, and you’ll
pay the same as a monthly cable bill.
You’ll find some programming overlap among services. And if you’re hooked on a particular TV show or
two that a streaming service offers, you may not have
immediate access to the latest episode (in some cases,
you could wait months). Most services offer a free trial
subscription, so do some digging before you sign on.
Netflix ($10 a month for new subscribers) is the
most popular on-demand service. In addition to showing movies, TV shows and documentaries, Netflix
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
| 13
14 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
RETIREMENT LIVING
Programs That Help
Seniors and Children
A SENIOR AND
CHILDREN WORK
TOGETHER AT
BRIDGE MEADOWS.
in 2011, laura seeton received a call that upended
her life, soon after graduating college at age 32.
Her older sister, who had a drug addiction, had
walked out on her children. The kids, ages 4, 5 and 9,
spent six months in foster care while Seeton waited for
her foster-parent certification. For three years, they
lived in her two-bedroom home. “It was isolating and
hard because I didn’t have support and felt that I
couldn’t reach out to people,” says Seeton, now 35.
Seeton found the support she needed from an older
generation. In February 2015, she and the kids moved
to Bridge Meadows, an intergenerational residential
community in Portland, Ore. Its purpose: for adults
ages 55 and older—called “elders”—to become an integral part of the lives of adoptive parents and their children, who had been in foster care. Bridge Meadows is
home to 30 elders and 34 children and their mothers.
Elders volunteer an average of eight hours a week,
in exchange for reduced rent for their apartment. The
community eats together once a week. There are group
activities as well as informal, day-to-day interactions.
Professional therapists run support “circles” for seniors, adoptive parents and children. “We have no
family to count on,” says Seeton. “At Bridge Meadows,
there are handpicked elders who fill that role of Grandma and Grandpa and know these kids have trauma.”
Caryl Farrier, 73, has lived at Bridge Meadows since
it opened five years ago. “The kids come in as scared
COURTESY BRIDGE MEADOWS
produces original programming, including the EmmyAward-winning House of Cards. However, Netflix’s library of movies and TV shows tends to be a bit dated.
Hooked on network TV? Hulu ($8 a month) streams
shows on demand from dozens of broadcast and cable channels, including ABC, CBS, Fox and NBC. Many
programs are available the day after they air, but others are not. Full seasons of many older shows are available—Seinfeld fans can binge-watch all nine seasons.
Amazon Prime offers a streaming service with thousands of TV shows, movies and original series, such as
the much-acclaimed Transparent. Like other services,
you may have to wait a bit to see first-run TV shows.
If you don’t want to pay $99 a year for Prime (the price
includes two-day free shipping for orders), you can use
the Amazon Instant Video app to rent or buy movies.
If you want access to a lot of cable stations (as opposed to random TV shows), try Sling TV. For $20 a
month, Sling TV streams about two dozen of cable’s
most popular stations, including CNN, ESPN, TBS,
TNT, A&E, AMC, Lifetime and History. AT&T will
offer a streaming package later this year.
You can buy an antenna if you can’t live without
the network and local-affiliate news or your favorite
network shows as they’re being broadcast. Warning:
Over-the-air reception can be spotty.
Go to AntennaWeb (www.antennaweb.org), tap the
“Click Here To Start” window, and enter your zip code.
Based on your general location, the Web site will determine how many channels and stations you can expect
to receive from a variety of indoor and outdoor antennas. “The best antenna typically tends to be the one
that gets you your main networks—ABC, NBC, CBS,
Fox, PBS,” says Mick Rinehart, president of TitanTV,
which runs AntennaWeb. A top-selling indoor antenna
is the $19 Super Thin Digital Indoor HDTV Antenna.
If you’re a die-hard sports fan, cutting the cord
could be a problem. If your antenna gets good reception, you’ll get the big games on network TV. But if a big
game is on cable, it could be tricky. Sling TV offers several ESPN and other sports channels that stream live—
but they won’t necessarily provide the major games.
Baseball fans should check out MLB.tv ($130 in season), which live streams every out-of-market Major
League Baseball game. To watch your local team, you’ll
have to wait 90 minutes after the game has ended. Also
blocking in-market games are NBA League Pass ($100)
and NHL GameCenter Live ($131). The free CBS
Sports app shows a limited selection of live events—it
even streamed the 2016 Super Bowl. K JEFF BERTOLUCCI
little people and most are now confident,” she says.
“They’re just fantastic.” The love flows both ways.
“My own children know that I am taken care of,”
Farrier says. “If I fell and broke a hip, all I would have
to do is holler and someone would be there.”
Intergenerational programs come in many forms,
besides the Bridge Meadows residential model. For
instance, at Providence Mount St. Vincent, a longterm-care facility in Seattle, a child care center is on
the same floor as skilled nursing. Seniors read to kids,
and make sandwiches with them for the homeless.
Schools are also getting into the act. Through the
AARP Foundation’s Experience Corps, 3,000 adults
ages 50 and older tutor students from kindergarten to
third grade in 22 cities. In Swampscott, Mass., the high
school and senior center share a building. The adults
exercise in the gym, volunteer in the library and attend
high school performances. Students have learned to
knit and play bocce. Some seniors share their life stories as part of an oral history project with fourth-grade
students at a nearby elementary school.
Intergenerational programs are proliferating along
with the aging of the population and the growing recognition that “older-adult capital” has a lot to offer the
younger generation, says Donna Butts, executive director of the nonprofit Generations United. The programs
“allow young and old to be viewed as assets rather than
as problems to be solved,” she says.
For seniors, mixed-age programs reduce loneliness
and help them feel productive and valued. For children, the programs provide “opportunities to get to
know older adults and counter the negative stereotypes
society has of them,” says Shannon Jarrott, a professor
of social work at Ohio State University.
Learning From Each Other
A number of adult day care programs are running
intergenerational programs. St. Ann Center for Intergenerational Care, in Milwaukee, Wis., serves 95 young
children who come after school or in the summer.
It also serves 150 adults ages 21 to 100. Some are frail
seniors who may use wheelchairs or walkers. And
some clients have cognitive issues and benefit from
socializing.
While each demographic group has its own space,
a large glass-enclosed area in the middle hosts joint
daily activities that include dancing and concerts.
The older generation—called “adult friends”—may
teach the youngsters about measurements while baking pies or discuss numbers while playing Bingo.
Sister Edna Lonergan, who is president, recalls
watching a little girl sit down cautiously on the couch
next to a senior. He tweaked her nose, and she tweaked
his. Then she got a pillow, put it on his lap and lay her
head down. “Sometimes you don’t have to have planned
activities to form a connection,” Sister Edna says.
For Bianca Maki, 5, recent highlights include
watching a Charlie Brown movie with the seniors
and a toilet-paper snowball fight. “It was a blast,”
says Ethel Ramirez, 88. “I love how the two-year-olds
come through our room almost every day and how I
can watch them when they’re in the next room,” she
says. She recently helped a little boy frost cookies.
Audrey Pinney, 7, who has been attending the
center since age two, says she loves “making my adult
friends happy and having fun with them.”
One adult friend is Susan Gock, 64, a former toxicologist who had a brain aneurysm four years ago. “Having the kids around gives me a sense of purpose and
keeps me positive,” says Gock. “I tell little girls they
can go into science because I did. They sit in my lap,
ask questions, and talk about school and their families.”
In Columbus, Ohio, a new intergenerational
program is a laboratory for Ohio State University
students who plan to pursue careers helping seniors
or young children. Teams of students, doctors, social
workers and nurses work with seniors from an adult
day care center and children from an early-education
program.
The goal of the Champion Intergenerational Enrichment and Education Center is to use intergenerational programming to help people of both demographic
groups develop specific functional and social skills. For
example, “the elder may find it more attractive to practice fine motor skills” in a program involving kids than
with a staff member, says Jarrott, who is also an intergenerational consultant at Champion. And children
can work on their own motor skills at the same time.
Each demographic group has its own part of the
floor, with the intergenerational area in the middle.
Activities include gardening, cooking and reading
together. Both groups eat in the cafeteria together.
Willy Maynes, 63, who attends the adult care program, says he plays dominoes and other games with
the children. “I like how they just talk to you, and it’s
great to listen to the kids’ minds,” he says. “They always have something to say and it makes me feel good.”
To find programs near you, go to Generations United (http://gu.org) or Generations of Hope (http://ghdc
.generationsofhope.org). K SALLY ABRAHMS
APRIL 2016 KIPLINGER’S RETIREMENT REPORT
| 15
YOUR FAMILY
Moving to Be Near
The Grandkids
nancy kilgore , 68, and her husband were happy
living in Thetford, Vt. But three years ago, they
moved 90 minutes away, to Burlington, to help
their divorced daughter raise her daughter. Because
it was difficult to move her psychotherapy practice,
Kilgore still commutes to see patients two days a week
and sleeps at a friend’s house. “My choices are usually
about doing what I love, not making money,” says
Kilgore. “Family is the most important thing to me.”
For many grandparents, pulling up roots to be near
adult children and grandchildren is “the last chance to
focus on family and to leave a legacy of special memories,” says Christine Crosby, editorial director of Grand
magazine. In a magazine survey in 2014 of 1,000 grandparents, 10% said they had moved to be closer to their
grandkids. Of those, 60% said “their main reason was
to help their adult children by providing child care,”
says Grand publisher Lori Bitter.
But as Kilgore discovered, be prepared to make
sacrifices if you move to be near the kids and grandkids. Before you make the move, check out opportunities to meet new people, through religious institutions,
volunteer and cultural groups, college classes, and
part-time employment. Also be sure your destination
has access to high-quality hospitals and doctors, and
that specialists you may need will take on new patients.
Establish the Ground Rules
You and your children should set boundaries ahead
of time. Grandparents must understand that their children have final say. “The parents need to run the show,
and the grandparents should respect their rules,” says
Dr. Arthur Kornhaber, a psychiatrist in Ojai, Cal., and
founder of the Foundation for Grandparenting.
Those boundaries work both ways. You should make
it clear that you intend to lead an independent life and
don’t want to be a babysitter on command. “I love being a grandparent, even more than being a parent,”
says Allan Zullo, 68, co-author with his wife, Kathryn,
of A Boomer’s Guide to Grandparenting (Andrews
McMeel Publishing, $13). “But you also have to live
your own life, and have a balance.”
Allan and Kathryn found a middle ground a decade
ago by living most of the year at their home in Ashe16 | KIPLINGER’S RETIREMENT REPORT APRIL 2016
ville, N.C., while spending winters in Tallahassee, Fla.,
where they built a two-bedroom house on their daughter’s property. Their grandsons are now 19, 17 and 9.
“It has worked out fantastically,” Allan says. “Physically being there, throwing a football around in the yard,
helping them with homework, driving them, eating
dinner together often, strengthens the bond.”
Jeff Rose, a certified financial planner with Alliance
Wealth Management, in Carbondale, Ill., says grandparents who are still working should look for comparable employment before they make the move. The new
job, though, may not be exactly what you want. Rose
says that one client in her sixties moved from Illinois
to Nashville, and her new job offered one week of vacation compared with three weeks at her former employer. Another couple moved from Connecticut to San Diego, Cal., where the cost of housing was so high that
they had to buy a considerably smaller home than they
had. “It’s a psychological decision, even if it doesn’t always make sense monetarily,” Rose says.
Such a move doesn’t have to be forever. Edie Iles, 65,
moved with her husband, Gerald, from Florida to Colorado in 2008 to spend more time with their daughter’s
family. Their two granddaughters are now 10 and 8.
Despite the cold winters and the higher cost of living,
it was a positive experience. “My memories of special
moments, of helping my granddaughters learn to walk
and talk—you can’t put a price tag on that,” Iles says.
After six years, Edie and Gerald moved back to Florida, but she has only one regret. She wishes they had
rented and not bought their house in Colorado. They
lost a lot of money on the real estate transactions, between closing costs and a year’s worth of carrying expenses on the Colorado house. K BETH BROPHY
Before You Move:
Check out opportunities to meet people and
o
engage in activities you like
Understand what your house could sell for and
o
the cost of a new home
Look for medical specialists who will take new
o
patients
Set rules with your children on your role in their
o
lives and your grandkids’ lives