Baby Boomer Survival Guide, Second Edition

Barbara Rockefeller is founder of foreign exchange forecasting firm Rockefeller Treasury Services, has over twenty years of financial institution experience in all aspects of foreign exchange, including trading, analysis, and risk management. She has a Bachelor’s Degree from Reed College in Portland, OR, and a Master’s in International Affairs from Columbia University in New York City. Rockefeller has authored four books, and writes a monthly column for Currency Trader, as well as articles and book reviews for Active Trader and Stocks, Futures, & Options. She lives and works in the Washington DC metro area. https://rts-forex.com/

Baby Boomer Survival Guide, Second Edition: Live, Prosper, and Thrive in Your Retirement


Table of Contents


Introduction..................................................................xv


PART I — Financial Decisions by Barbara Rockefeller


Chapter 1......................................................................3


Getting Started: Taking Stock




You are Not Alone...............................................5
Baby Boomer Worries.........................................5
Will You Outlive Your Savings?...........................6
How Much Do You Need?.....................................9
The Monster under the Bed: Long-Term Care......11
Homelessness.....................................................12
The Solution.......................................................15
Calculating the Cost of Retirement......................19
Planning..............................................................20


Chapter 2.......................................................................25


Retirement Age




Longevity.............................................................25
What to Do With Your Extra Years........................26
Retiring Early Is Dangerous to Your Health..........28
Who Do You Want to Become?..............................30
Working After Retirement.....................................30
Changing Jobs Before Retirement.........................32
Starting Your Own Business after Retirement.......35
Resources.............................................................38


Chapter 3...............................................................................41


Social Security




The Real Social Security Problem.................................44
Final Debunking...........................................................45
How it Works in Practice..............................................46
How Your Social Security Benefit is Calculated.............47
The Best Age to Apply..................................................50
Monthly Benefits at Retirement Age.............................51
Cumulative Benefits by Retirement Start Age...............51
The Breakeven.............................................................51
Spousal Benefit............................................................52
If You Are Single..........................................................53
Cost-of-Living Adjustments (COLA)..............................56
Social Security Optimization Strategies........................58


62/70 Strategy...................................................58
Double Dipping...................................................58
File and Suspend................................................59
Start-Over Strategy............................................59



Working and Social Security.........................................60
Taxing Social Security...................................................61
Social Security Disability Benefit Claims on the Rise.....62
Other Aspects of Social Security...................................63


Chapter 4................................................................................67


A Place to Call Home in Your Golden Years




Homeownership vs. “Real Estate”.................................68
Cashing Out..................................................................70
Reverse Mortgages.......................................................72


How Do Reverse Mortgages Work?......................72



A Family Affair..............................................................74
Downsizing...................................................................75
Managing the Real Estate Broker..................................76
Renting vs. Buying........................................................79
Boomer Mobility............................................................81
On Retiring Abroad........................................................87
So You’re Determined to Take The Plunge.....................89


Real Estate/Housing............................................89






Healthcare...........................................................90
Crime and Violence..............................................91





Chapter 5.................................................................................95


Inheritance




Why Do We Have Inheritance and Estate Taxes?............96
Federal Estate Tax..........................................................99
Portability......................................................................100
Here’s How It Works......................................................100
State Inheritance Taxes.................................................101
The Gift Tax and Exemptions..........................................102
Why You Should Think About Inheritance......................103


Chapter 6.................................................................................107


Wills and Trusts




Why Do People Fail to Prepare for the Inevitable?..........108
Dying Without a Will.......................................................108
The Essence of a Will......................................................111
Writing a Will..................................................................111
Changing and Revoking Your Will....................................113
Contesting a Will.............................................................115
Do You Need a Living Trust, Too?....................................117


What is a Revocable Living Trust?.........................117
Advantages of a Living Trust.................................119
Disadvantages of a Living Trust.............................120
Special Trust Cases................................................121



Generation-Skipping Trusts (GST)...................................122
Credit Shelter Trust (CST)................................................122
Charitable Remainder Trusts............................................123
Private Foundations.........................................................124
Fiduciary Duty..................................................................125


Chapter 7....................................................................................129


Trading and Investing: Rules for Success




Rule 1: Achieve Basic Financial Literacy............................131
Rule 2: It’s Not Savings Unless It’s a Savings Account......133
Rule 3: Only Greater Risk Boosts Return...........................134
Rule 4: Leverage Boosts Return but Increases Risk...........135
Rule 5: Seeking Risk On Purpose.......................................137
Rule 6: Avoid Catastrophic Losses, Part 1..........................140
Rule 7: Avoid Catastrophic Losses, Part 2..........................142
Rule 8: Learn to Look at Charts.........................................144
Rule 9: Conventional Wisdom is (Probably) Bunk..............145
Rule 10: Options................................................................146
Rule 11: Avoid Fraud and Scams........................................151




Avoiding Bad Investments:


Advice from Credit Analysts.....................................154





Chapter 8.....................................................................................157


Financial Planning




Planning vs. Advising.........................................................159
Credentials.........................................................................160
Do Your Homework............................................................162
Retirement Investment Mentors.........................................165
Retirement Coaches............................................................165
Components of a Retirement Plan.......................................166
Measuring Outgo.................................................................166
Measuring Income...............................................................169
Putting Income and Outgo Together....................................170
The 4 Percent Rule...............................................................171


Part II — Considerations for Quality of Life by Nick J. Tate


Chapter 9...............................................................................................................175


The Long and Winding Road to Long-Term Care




7 Key Questions and Answers to Long-Term Care.........................................177


No. 1: What Is Long-Term Care?.........................................................178
No. 2: Is Such Care Pricey?.................................................................178
No. 3: How Much Do Long-Term Insurance Policies Cost?...................179
No. 4: Is Insurance The Only Option?.................................................180
No. 5: Won’t Medicare Pay for Some Long-Term Care?........................182
No. 6: What about Medicaid?..............................................................183
No 7: How Can You Tell if You’re Likely to Need Long-Term Care?......184





Chapter 10..............................................................................................................................................................................187


The Silver Tsunami




The Politics of Medicare.................................................................................................................................................189
The IPAB: “Death Panel” or Expert Board of Directors?................................................................................................ 191
“Premium Support” Payments:


Voucher Program?...............................................................................................................................................192



Coming up with a Medicare Game Plan...........................................................................................................................192


No. 1: Who Is Covered by Medicare?....................................................................................................................193
No. 2: What Are the Primary Elements of Medicare?.............................................................................................193
No. 3: Do You Even Need Medicare?.....................................................................................................................196
No. 4: Should You Stick With Your Current Medicare Plan?...................................................................................197
No. 5: What Type of Plan Works Best for You and Your Budget?...........................................................................197
No. 6: Do You Qualify for a Discount?...................................................................................................................198
No. 7: When Can You Sign Up?.............................................................................................................................198
No. 8: Are There Certain Rules and Restrictions for First-Time Enrollees?............................................................199
No. 9: What If You Don’t Like Your Plan?..................................... 199
No. 10: What Is the “Donut Hole” in Prescription Drug Coverage, and Is It Really Closing Under Obamacare?.....199
No. 11: What Is Supplemental Medicare Coverage and Do You Need It?...............................................................200
No. 12: Where Can You Get Unbiased Help and Information?................................................................................203
No. 13: Will Cuts To Medicare Advantage Doom the Program?..............................................................................204
No. 14: Is a Stand-Alone Medicare Part D Drug Plan Right For You?......................................................................206
No. 15: Medicare Scams And How To Avoid Them.................................................................................................209





Chapter 11........................................................................................................................................................................213


Thinking Through the Unthinkable




No. 1: What Is a Living Will?....................................................................................................................................215
No. 2: What Is a Healthcare Proxy?.........................................................................................................................216
No. 3: Can Your Medical POA Be a Non-Relative?.....................................................................................................217
No. 4: What Treatments Would You Want — and Not Want?.....................................................................................218
No. 5: Why Do You Need to Put It in Writing?..........................................................................................................220
No. 6: Should You Update Your Advance Directives Periodically?.............................................................................221
No. 7: Can Your Healthcare-Related Documents Be Invalidated or Challenged as Faulty?........................................222
No. 8: Can Your Doctor Refuse Any of Your Advance Directives?..............................................................................222
No. 9: Are There Other Documents You Might Need to Be Sure Your Wishes Are Carried Out After You’re Gone?.....222
No. 10: How Can You Help an Older Parent or Relative Make Similar Plans?.............................................................223


Chapter 12........................................................................................................227


The Lifelong Journey to Health




Data from the Experts.............................................................................228
Some Hopeful Signs................................................................................231
Prescriptions for Health..........................................................................232
Screening Recommendations for Men and Women of All Ages.................233


Avoid Tobacco...............................................................................233
Limit Alcohol.................................................................................233
Maintain a Healthy Weight............................................................233
Eat Healthy...................................................................................234
Get Moving....................................................................................234
The “Goldilocks Effect” for Heart Rate...........................................235
Get Regular Physical Exams..........................................................236
Do Something to Manage Stress and Get a Good Night’s Sleep......236



Screening Recommendations As You Age................................................237


Men: 40 and Older.........................................................................237
Women: 40 and Older....................................................................238
Both sexes: 40 and Older...............................................................239
Men: 50 to 65.................................................................................239
Women: 50 to 65............................................................................239
Both sexes: 50 to 65.......................................................................240
Men and Women: Over 65...............................................................241



Beyond the “Big C”...................................................................................241
Minding Your Mental Health......................................................................244
5 Rules to Live By.....................................................................................245


No 1: Exercise.................................................................................245
No 2: Weight Control.......................................................................247
No 3: Mental Challenges..................................................................248
No 4: Social Interactions.................................................................251
No 5: Cut Down onStress.................................................................252



Beware of Bogus Cancer Cures..................................................................255
Will You Live to 100?.................................................................................258


Move more, eat less.........................................................................258
Banish stress...................................................................................259
Rest up............................................................................................259
Follow your bliss..............................................................................259
Learn new things.............................................................................259





Chapter 13.................................................................................................................................263


** NEW Healthcare: What Boomers Need to Know




What Are the Smartest Ways to Budget and Plan for Healthcare Costs in Retirement?.....272
Explore Health Savings Accounts......................................................................................273
Consider Long-Term Care Insurance.................................................................................274
Resolve to Stay Healthy....................................................................................................274
Manage Any Chronic Conditions You Have.........................................................................274
Become a Comparison Health Shopper..............................................................................274
Itemize Medical Deductions on Your Taxes........................................................................275
Save on Drug Costs...........................................................................................................275
Investigate Insurance Rebates..........................................................................................275
Look into Employer Wellness Programs.............................................................................276
Other Savings Options.......................................................................................................276
Healthcare Spending Skyrocketing.....................................................................................276
Avoiding Scams.................................................................................................................278
Fraudulent O Websites......................................................................................................278
Medicare Scare Ploys.........................................................................................................279


Chapter 14...................................................................................................................................281


Quality of Life by Barbara Rockefeller and Nick J. Tate




One Size Does Not Fit All...................................................................................................286
Best Places to Live............................................................................................................287
Staying Connected............................................................................................................288
Volunteer..........................................................................................................................289
Groups and clubs..............................................................................................................290
Don’t Neglect Your Physical Health...................................................................................290
Dating over 50..................................................................................................................291
Adopt a pet.......................................................................................................................291
Time Well-Spent...............................................................................................................292
Living Long and Healthy....................................................................................................293
Lessons from Centenarians...............................................................................................293
Strive for Balance..............................................................................................................296


Afterword....................................................................................................................................299


Appendix A:.................................................................................................................................301


Unbiased Resources




State Health Insurance Assistance Programs (SHIP) by State............................................302
Patient Advocates, Insurance Ombudsmen by State...........................................................309


Appendix B......................................................................321


Assisted-Living Facilities and Nursing Homes




How to Choose an Assisted-Living Facility..............321


Compare Assisted Living to Home Care.........321
Research and Visit Prospective Facilities......322
Calculate Costs.............................................323



Top 40 Assisted-Living Companies..........................323
How to Choose a Nursing Home..............................328


Do Your Homework.......................................328
Visit Multiple Times.......................................328
Ask Questions about What You See...............329



Nation’s Best Nursing Homes..................................329
Additional Resources for Long-Term Care................335


Index................................................................................337