Retirement Living News

February 2009

HEADLINES  (Click on headline to read story)

• Consumer Reports Retirement Survey 
  Offers Advice on Panning Ahead
• Senior Move Managers Help Make Moving Easier
• CMS Unveils Five-Star Rating System for Nursing Homes
• U.S. New & World Report Identifies 10 Best Cities 
  for Job-Seeking Retirees
• "Silver Summit" Displays High Tech Sensors 
  to Help Seniors Live Independently

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Consumer Reports Retirement Survey 
Offers Advice on Planning Ahead 

In the wake of big investment losses many people planning their retirement have turned to Plan B to strategize and rebuild their retirement nest egg, according to Consumer Reports latest retirement survey. 

There is a lot of ground to recover, 51 percent of retired readers and 55 percent of those just short of retirement are facing investment losses of at least 20 percent in the past 12 months. The report outlines 17 actions you can take now, whether you're already retired or are close to retirement, or you have decades to go. It pinpoints the best places to stash a cash cushion against more bumps in the road. 

The Consumer Reports National Research Center surveyed more than 19,000 Consumer Reports online subscribers between the ages of 55-75 and found about half have already made strides to generate more cash, including eating out less and cutting back on entertainment. About one-third have cut their credit card use and spent less on groceries and household goods. 

"When bad investments happen to good people, they have to work harder to slash debt, cut spending and save more. Switching to Plan B means seizing the reins in every area of your financial life over which you have control," said Noreen Perrotta, Consumer Reports Money editor. 

The Consumer Reports Retirement Survey also found that consumers who planned ahead were more satisfied with their retirement prospects, even in the current economic climate. Among pre-retirees 90 percent planned ahead by reading books or articles, consulting professionals, using online software, taking courses or conversing with family and friends. The more planning methods used, the more satisfied the respondents were. 

However, pre-retirees who had done more planning reported worse losses, on average, than those who hadn't planned. Retirement planning strategies encourage investors to diversify beyond safe vehicles such as bonds and CDs. Respondents who had planned were less conservative, in general than those who didn't. Before the meltdown, this strategy was much more beneficial according to Consumer Reports' 2007 Retirement Survey. But it proved punishing during the unusually severe market downturn of recent months. 

The 2008 report also found that using financial pros gave planners no edge. Unlike last year's survey, those who reported using financial planners this year said they were no more satisfied than those who educated themselves. Both groups said they lost money at about the same rate. Respondents who had financial planners had a net worth that was about $230,000 greater than those who didn't. But CR doesn't know if they were wealthier to begin with. 

Forty-three percent of respondents that did four or more planning activities said they would now delay retirement a year, compared with 28 percent of those who had done nothing. Greater losses might have forced the decision. 

Consumer Reports' February issue offers a complete guide with 17 moves to help retirees, pre-retirees and younger workers rebuild the nest egg and secure their financial futures in the wake of a down-turn economy. Here are some of the highlights: 

Retirees: 
Consider your withdrawal rate. In general, financial planners say an annual withdrawal rate of about 4 percent from your total investments is optimal to ensure the money lasts as long as you do. However, when your assets fall in value, you'll have to withdraw at a higher rate to have the same income. The alternative is to withdraw and live on less or invest more conservatively, with the risk that you will run out of money sooner. 

Pick up extra money by working. For those with the ability, working even part-time can help mitigate a financial burden. Twenty-two percent of CR's respondents said they're working part-time, and 22 percent of those who are fully retired said they wish they could work again. Employers might be willing to hire experienced older workers. 

Don't abandon moving plans. Your $400,000 home may have lost $100,000 in value, leaving you with less to spend on housing elsewhere. But values are down in many areas, and moving to a lower-cost area might still be worth that trade-off. The issue also includes an informative section on what to consider before you relocate. 

Pre-retirees: 
Reset your retirement clock. If you're eligible for a pension, and assuming your employer's plan is healthy, working more years can add to your payout, which is often based on salary and number of years worked. Even those without a traditional pension can use that time to shore up the nest egg. If you're 50 or older, you can contribute up to $22,000 this year to tax-deferred accounts such as 401(k) plans. 

Keep on contributing. At the least, put enough in to get the full employer match. If your employer no longer matches, try to contribute at least as much as before. If you're able, make up for the match with a higher contribution. 

Borrow with caution. If you are eligible for a reverse mortgage, proceed with caution are even stronger for younger eligible homeowners. If you live long enough to spend the loan -- a possibility if you're in your 60s-you could be back at square one but with far less home equity. Another option, borrowing from your 401(k), if possible, also has pitfalls. For one, if you leave your job or lose it, the loan must be repaid in full or it becomes a taxable distribution.
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Senior Move Managers Help Make Moving Easier

Moving can be stressful for anyone and especially so for seniors. On top of hiring movers, packing, and setting up the new home, there is an emotional toll of leaving a house that the senior may have lived in for years. If the move seems overwhelming, a senior move manager may be able to help. 

Although specific services vary, most senior move managers can help with some or all of the following: 

• Developing an overall move or "age in place" plan 
• Organizing, sorting and downsizing 
• Customized floor plans 
• Arranging for the profitable disposal of unwanted items through auction, estate sale, buy-out, consignment, donation, or a combination of the above
• Interviewing, scheduling and overseeing movers 
• Arranging shipments and storage " Professional packing 
• Unpacking and setting up the new home 
• Related services, such as cleaning, waste removal, shopping, senior escort, assisting with selection of a realtor and helping prepare the home to be sold. 

Most move managers can also help seniors who wish to stay in their own home but need assistance organizing their homes to allow them to age in place. 

Move managers, many of whom have backgrounds in gerontology, social work, health care, nursing, and psychology, charge either an hourly fee or a flat rate, depending on the manager. In addition, if just a little extra help is needed, it may be possible to hire a move manager to assist with just one part of the move (e.g., packing) rather than the whole move. 

To find a move manager near you, contact the National Association of Senior Move Managers at http://www.nasmm.org/index.html or call 877-606-2766.
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CMS Unveils Five-Star Rating System for Nursing Homes

The Centers for Medicare & Medicaid Services (CMS) has unveiled a one- to five-star rating system for nursing homes to help consumers evaluate a nursing home's quality when selecting a facility. The ratings appear on the agency's Nursing Home Compare Web site. 

A five-star designation means the facility ranks "much above average," four-star indicates "above average," three means "about average," two is a "below average" ranking, with a one indicating that a facility ranks "much below average." The rankings, which will be updated monthly, are based on a nursing home's performance in three areas: quality measures, nurse staffing levels and health inspection reports. 

In this first round of quality ratings about 12 percent of the nation's nursing homes received a full five-star rating while 22 percent scored at the low end with one star. The remaining 66 percent of facilities were distributed fairly evenly among the two-, three- and four-star rankings. The ratings indicate that nonprofit nursing homes deliver a higher quality of care than for-profit facilities, according to an analysis by USA Today.  When the rating system was announced  last year, Toby Edelman, senior policy attorney with the Center for Medicare Advocacy,  said that two of three criteria CMS uses for the ratings -- staffing data and quality measures -- are "self-reported by nursing facilities and are inaccurate." Edelman said, "Relying on nursing homes to describe accurately how well they are doing . . . just doesn't make sense." 

The National Citizens' Coalition for Nursing Home Reform issued a statement saying it commends CMS for providing a new tool for long-term care consumers but urging consumers to "not oversimplify nursing home selection." 

"In reviewing the Five-Star rating for a particular nursing home, consumers should compare the rating with their own experience during a personal visit to the home," the Coalition warned. "For example, staffing data that is used for the rating system is based on the two weeks prior to the nursing home's annual regulatory survey, an insufficient period of time to represent the usual staffing pattern of the home. Consumers should visit the home and review staffing data that is required to be posted for every shift, every day." 

For its part, the nursing home industry is not pleased with the rating system. In an opinion piece in USA Today, Bruce Yarwood, president of the American Health Care Association, a long-term care industry trade group, called the new rating scheme "a complex and inaccurate system that fails to provide the consumer with an appropriate tool to measure quality of care in our nation's nursing homes."
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U.S. News & World Report Identifies 10 Best Cities 
for Job-Seeking Retirees

A number of retirees are coming to the realization that they may need to continue working now that the value of their retirement account has dwindled. The question is where to go to find work. The February 3 issue of U.S. News & World Report has a report on the 10 Best Cities for Job-Seeking Retirees. 

The article, which discusses not only what kind of jobs are recession-proof, but also the cities in which to find employment for those over the age of 55. 

In a time where every American conversation seems to drift back to "the economy" and what the future holds, this article sheds some light on opportunities for retirees who may want to continue working. The magazine consulted with Bob Skladany, vice president of research for RetirementJobs.com, and quoted him as saying "The recession-proof industries are the ones where people find jobs when times are tough: healthcare, higher education, government, retail, transportation, and utilities or energy." 

The article identifies 10 cities with well-diversified economies that are thriving despite the recession and where seniors can find employment. The analysis took into account employment growth, the unemployment rate, housing costs, the cost of living, and proximity to high-quality healthcare. The cities listed were: Bellevue, WA; Bismark, ND; Charleston, WV; Charlottesville, VA; Ithaca, NY; Huntsville, AL; Lubbock, TX; Oklahoma City, OK; Rochester, MN, and State College, PA.

Ten other cities that have opportunities for older workers are: Albany, NY; Austin, TX; Boulder, CO; Columbia, MD; Dover, NH; Fayetteville, AK; Iowa City, Iowa; Lincoln, NB; Madison, WI; and Naperville, IL. For more details, click here.                                                                                         Top

"Silver Summit" Displays High Tech Sensors 
to Help Seniors Live Independently

An array of cutting edge technology and products were the focus of the inaugural Silver Summit held last month in conjunction with the Consumer Electronics Show in Las Vegas. Among the participants were hospitals, nonprofit groups, retailers, insurers and dozens of entrepreneurs, many of whom got involved after personal experiences in dealing with the care of elderly relatives. 

Among the advances at the show were motion sensors, the kind that allow nurses to help figure out what keeps a restless patient up at night. "We try to identify when those small problems occur, so we can fix them before they become big problems," said Marjorie Skubic, an electrical and computer engineering professor who works with Sinclair School of Nursing researchers on the aging-in-place project. 

At Oatfield Estates outside Portland, Oregon, resident movements in the private retirement home are tracked by what employees call "bed bugs." They are embedded motion sensors that detect when someone's behavior could trigger a medical alert. Sensors like those "smart carpets" and other tracking devices will be the norm in both private homes and group settings within the next decade, said Jason Hess, chief executive officer of Elite Care, the company that owns Oatfield Estates. He said that will especially be true as insurers start embracing the cost-saving devices. "You will see a lot more places implementing these," he said. "It comes down to cost, and out-of-the-box thinking." 

On display at the show were talking pill boxes that remind seniors to take their medicine at regular intervals, and which can notify out-of-town caregivers if that doesn't happen. There were robotic companion pets that mimic the real thing for lonely seniors in need of a psychological boost. 

"We're talking about an important paradigm shift in how we think about aging," said Majd Alwan, director of the Washington-based Center for Aging Services Technologies. Alwan led a panel discussion on smart-home technology at the Las Vegas event. Delaying institutionalization by a year or more, is a significant financial savings, he added. "Let alone the benefits in quality of life for the senior and for the caregiver." 

Some residents of a senior apartment complex named Tiger Place  (after the University of Missouri mascot) take part in the motion sensor research project. The complex is owned by the university but managed by a private company. Researchers there are also fine-tuning a more advanced monitoring system using virtual-reality silhouette images to allow observation of posture, gait and other movements. The silhouettes are considered a preferred alternative to more invasive video cameras. 

Researchers acknowledge that rapid technological advances in elder care must be balanced with privacy protections. Technology does have a role to play but it is a tool, not the answer. For more information about some of the research in progress, go to: http://www.agingtech.org/index.aspx.
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