Retirement Living News

December 2008

HEADLINES  (Click on headline to read story)

• New Survey Reports One In Four Boomers Plan to Move
• Some 55-Plus Communities May Abandon Age Restrictions in
  Effort to Sell Empty Homes
• Study Explores How Retirement Affects Married Relationships
• Some Assisted Living Costs May Be Tax Deductible
• AARP Suspends Marketing of Fixed Benefit Indemnity Plans

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NEWS STORIES

New Survey Reports One In Four Boomers Plan to Move 

One in four baby boomer generation households (26%) expects to move from their current home in the future, with the majority looking for a single-level home that is more comfortable or convenient. This is according to a telephone survey conducted by Opinion Research Corp. for AARP from August 29 to September 8, 2008. 

Echoing past surveys, most boomers (79%) say they would like to stay in their current home for as long as possible. Some (less than 10%) said they would like to stay in their current home but don't think they will be able to do so. 

Many of those who expect to move said they will be looking for a better house, a better climate or a home that is closer to family and friends. More than half of those boomers (age 45-64) planning to move expect to look for a home that's all on one level (59%). About half said they will look for a newer home (50%) or a smaller home (49%). 

Older boomers are significantly more likely than younger boomers to think that they will move into a single level home (68% vs. 54% of those planning to move), but age is not the only factor that affects expectations. Boomer men are more likely than women to believe they will move into a newer home (61% vs. 42%) or move into a home in a warmer or better climate (41% vs. 25%) Boomer women are more likely than men to think they will move into a smaller home (54% vs. 41%). 

"While boomers will reflect the patterns of earlier generations and mostly age in place the sheer number of boomers will increase demand for a whole variety of home and community options," said Elinor Ginzler, Senior Vice President of AARP. The number of persons age 65 and older is expected grow to 70 million by 2030.
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Some 55-Plus Communities May Abandon Age Restrictions in
Effort to Sell Empty Homes

With the financial crisis deepening and the housing market stalled, a growing number of units in 55-plus communities are lying vacant. Across the country developers of active adult communities, along with homeowners' associations, are mulling over their options to attract more residents to their properties. Some are now considering what was once unthinkable - letting younger people in. They are debating whether to scrap the age restrictions that have helped define a way of life for retirees for almost five decades. 

Many housing units are sitting idle as potential buyers find themselves stuck in the housing crisis, unable to sell their homes and relocate. Existing residents whose investments have plunged in the past year are falling behind in their homeowners' dues. Clubhouse activities are also being scaled back. 

Changing the age of entry in a retirement community would alter the lifestyle of residents who say that is why they bought in the first place. An influx of younger residents could also affect relations with surrounding neighborhoods. Cities and towns have long favored the development of retirement communities because they provide tax revenue but do not require additional services like schools. 

Federal regulations require that 80% of residents in an active adult community must be at least 55 years old and that children under age 19 are excluded. Last year residents of Sun City Grand in Surprise, Ariz., voted to lower the age requirement to 45 from 55 though children are still excluded. 

For more information on this issue, read the front page story that appeared in the December 1 issue of The Wall Street Journal -- http://online.wsj.com/article/SB122809427244267951.html.
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Study Explores How Retirement Affects Married Relationships

This study surveyed 1,064 adults ages 55-75 who were married or living as married, who are retired themselves and/or have a spouse who is retired. It found that most retirees do not re-enter the workforce after they retire. Those that do re-enter the workforce mostly do so because they are bored or they missed having something to do. Some say they return to work for monetary reasons. Approximately one-third of those who retired first also encouraged their spouse to retire. 

The survey was conducted a year ago for AARP The Magazine by Opinion Research Corp. but was just published in November 2008. Among the findings were the following: 

• Overall, retirees who are in a relationship where both spouses are retired are happier, are less stressed, and spend more time with their spouse. 
• Those who wish they had worked longer cite lack of money, liking the job or missing the activity as reasons. Individuals with a working spouse report greater regret than those whose spouse is also retired. Compared to men, women in a relationship where both are retired are more likely to wish they had stayed working longer. 
• Respondents who say their spouses have increased their housework since retirement are more likely to be personally satisfied with their retirement than those whose spouses have not increased their share of the housework. While retired men seem to think they have taken on more of the housework since they retired, working women with a retired spouse disagree. 
• Respondents who report higher dissatisfaction with retirement are also more likely to think that their relationship is weaker, say they are less romantic with their spouse , spend less time with family since retirement, and say they or their spouse has had a harder time adjusting to retirement. 
• Most retirees find adjusting to their retirement or the retirement of their spouse to be what they expected. For most, retirement has meant no change (or some improvement) in their overall relationship, in being romantic with one another, or in arguing with one another. 
• Overall, retirement has a positive impact on the frequency of travel, eating out, exercising, volunteering, and engaging in hobbies. 
• Those who started doing new activities now that they are retired are more satisfied in their retirement than those who have not thought about starting activities or those who are still planning to start them. 

To read the full 56-page report, go to: http://assets.aarp.org/rgcenter/general/retired_spouses.pdf.
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Some Assisted Living Costs May Be Tax Deductible

While assisted living costs continue to increase every year, some of the costs may be tax deductible, according to ElderLawAnswers. Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 7.5 percent of the person's adjusted gross income. 

Generally, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not. In order for assisted living expenses to be tax deductible, the resident must be considered "chronically ill." This means a doctor or nurse has certified that the resident either: 

• cannot perform at least two activities of daily living, such as eating, toileting, transferring, bath, dressing, or continence; or 
• requires supervision due to a cognitive impairment (such as Alzheimer's disease or another form of dementia).

In addition, to qualify for the deduction, personal care services must be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse, or social worker must prepare a plan that outlines the specific daily services the resident will receive. Though not required by law, most assisted living facilities prepare care plans for their residents. 

If the resident is chronically ill and in the facility primarily for medical care, and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital. 

However, if the resident is in the assisted living facility for custodial and not medical care, the costs are deductible only to a limited extent. In any case, the expenses are not deductible if they are reimbursed by insurance or any other programs. 

ElderLawAnswers operates a Web site - www.ElderLawAnswers.com -- that provides legal information, not legal advice. Its information explains general legal concepts and principles which may or may not be applicable to a particular person's situation. It is not a law firm, does not give legal advice and no attorney-client relationship exists between the site and any user.
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AARP Suspends Marketing of Fixed Benefit Indemnity Plans

Following a Senate inquiry led by Sen. Chuck Grassley (R-Iowa) AARP has suspended marketing and sales of several AARP-branded fixed benefit indemnity plans administered by UnitedHealth Group, one of the nation's largest insurers. Grassley, the senior Republican on the Senate Finance Committee, said the marketing of the products was often misleading because it suggested that they offered comprehensive coverage. 

The products carry names like AARP Medical Advantage, Essential Plus and Hospital Indemnity Plan. Grassley said that "there is no basic protection against high medical costs. 

The products may leave consumers seriously in debt if they need intensive medical care." 

William D. Novelli, the CEO of AARP, said he was eager to address Senator Grassley's concerns. He added that "ensuring the protection and keeping the trust of our members drives all that we do at AARP." Novelli said an investigation of the issues will be conducted by Elizabeth Rowe Costle who was the insurance commissioner of Vermont from 1992 to 2003. 

Grassley called AARP's action a "step in the right direction." But he is still concerned that people who bought the plans may not fully understand their coverage.
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