May 12, 2016

Wills, Trusts, Estate Planning & other Legal Topics

A great resource for estate planning is the NOLO website: http://www.nolo.com/
Nolo was started by a group of lawyers who felt you shouldn't have to pay hundreds of dollars to get competent legal information and advice. In addition to selling books (the real thing and e-books) on a wide range of legal topics, the Nolo website provides an amazing amount of free information. For most people with simple lives (and not a string of ex-spouses with kids) you can write your own will for a fraction of the cost of what an attorney would charge. A great thing about the Nolo resources is they are very careful to alert you to situations where you really do need to consult an attorney. Their materials are well written in a lively manner and with a sense of humor. Check them out. Even if you are convinced you need a lawyer, you can save hundreds of dollars by educating yourself and preparing before you meet with an attorney.

May 6, 2016

Cutting your child's college costs starts early with tough talks

Paying for college is one of a family's biggest expenses.  "With college expenses and student debt on the rise, wise parents engage in candid conversations on this hot topic earlier, rather than later, with their college-bound kids." Sue Grossardt, offers the following tips in a Special for USA TODAY: 
1. Focus on cost, and don't be shy.
2.  Get some skin in the game.
3. Figure debt (not guilt) into college choice.
4.  What’s your major?
5. Define goals early.
"How many of us, at 18 years of age, knew exactly what we wanted to be when we grow up? The reality is that the process of uncovering that is part of growing up. Having some tough talks ahead of time could help limit the cost of that lesson.
Paying for college is the topic for the July 13 Financial Planning for Women program. Details at: www.usu.edu/fpw

The Huge Retirement Penalty for Being a Mom

To reinforce my earlier post about giving mom an Individual Retirement Account rather than flowers or brunch for Mother's Day read on...
"As Mother’s Day approaches, families are busy buying flowers or booking a brunch at a favorite restaurant. Sounds great, but you may want to check on Mom’s retirement plan."
1. Moms generally earn less… 
2. …so they save less for retirement…
3. …and receive lower Social Security benefits.
4. Yet they have longer retirements to finance…
5. …which adds up to higher odds of poverty in retirement.    
Read the details by Penelope Wang at: http://time.com/money/4318170/retirement-penalty-mother/
Then search for "IRAs" on this blog for how to arrange an individual retirement account for mom. Adult children might want to contemplate the impact on their lives when mom is old and living on only Social Security.

Housing, Health Are 1/2 of Elderly’s Costs

As I transition from employer-subsidized health insurance to Medicare I'm reminded that not all expenses decrease in retirement. My (and husband's) health care premiums are going from $43/month to about $300/month.
Medicare Part A (hospital insurance): most people don't pay a premium because they've paid taxes while employed.
Medicare Part B (outpatient insurance): $121.80/mo. (for most people; some pay more)
Medicare Part C (Medigap to cover the gaps):
Medicare Part D (prescription drug coverage): cost varies by plan with higher income enrollees paying additional premiums AND you still pay deductibles, copayments, and/or coinsurance. See: https://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html#collapse-4811
or Part A & B plus Medicare Advantage (supplemental insurance): https://www.medicare.gov/your-medicare-costs/medicare-health-plan-costs/costs-for-medicare-advantage-plans.html
And... once you've figured out the best plans, you need to go through this process every year as insurers change coverage and premiums!

Medicare costs: https://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html
The Squared Away blog shows how Americans' spending changes as they transition from work to retirement. Of course, individual spending varies but the pie charts help by showing the averages. See: http://squaredawayblog.bc.edu/squared-away/housing-health-are-12-of-elderlys-costs/
Read the Medicare Advantage Primer (but note it was published in 2015 and Pat B premiums have gone up to $121.80 in 2016); http://squaredawayblog.bc.edu/squared-away/medicare-primer-advantage-or-medigap/
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