Income inequality is bad enough, but wealth inequality is way worse

"The richest 1 percent now owns more of the country’s wealth than at any time in the past 50 years." Writing for The Washington Post, Christopher Ingraham explains:  "Today, the top 1 percent of households own more wealth than the bottom 90 percent combined. That gap, between the ultrawealthy and everyone else, has only become wider in the past several decades." Using the analogy of equally distributing slices of pie, Ingraham explains the results of research by economist Edward N. Wolff, published in his new book: "A Century of Wealth in America." 

Extreme wealth and income inequality is bad for the economy. What can we as a nation due to reduce wealth inequality and its perverse negative effects?

"If you were designing a tax plan to reduce the extreme inequality in the United States, you'd probably try to find ways to redistribute some of the wealth from the richest households to the poorest ones. But the Senate GOP tax plan does precisely the opposite of that, according to the CBO: In the short term the richest households get the biggest tax cuts, while longer term the taxes of the poorest households actually increase."

Check it out: https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-richest-1-percent-now-owns-more-of-the-countrys-wealth-than-at-any-time-in-the-past-50-years/

Getting to Retirement: Common Sense from The Humble Dollar

"HOW DO WE GET from here to retirement? Amid the financial markets’ daily turmoil, it might seem like one big crapshoot."

"But in truth, navigating this journey is pretty straightforward, because there are just five key variables—our time horizon, current nest egg, savings rate, target nest egg and investment return."

Jonathan Clements (https://humbledollar.com/)provides solid, easy to implement strategies for retirement investing for people at various ages. Sign up for his weekly emails and read his Humble Dollar blog.

Starting with this example he illustrates how one can achieve a secure retirement based on current age: "We begin investing for retirement at age 25 with a mix of 60% stocks and 40% bonds. We sock away a little over $15,000 a year, with that sum rising each year with inflation. If all goes well, our nest egg should—in today’s dollars—be worth some $169,000 at age 35, $384,000 at age 45, $655,000 at 55 and our coveted $1 million at 65."

OK. So you're not longer age 25. Check out his variations based on your current age. 

https://humbledollar.com/2020/11/dialed-in/

How to avoid dementia and How dementia affects finances

Dementia may cause major financial problems long before diagnosis, making early detection critical

"Deteriorating financial capabilities have long been considered one of the earliest signs of cognitive decline."

New research published Monday "suggests that adverse financial events associated with Alzheimer’s disease and related dementias, or ADRD, can start happening years before people are clinically diagnosed." The study connected "the health data of more than 80,000 Medicare beneficiaries with federal consumer credit reports."

“Some of these financial symptoms are popping up as early as six years before formal clinical diagnosis,” said the study’s lead author.

"The effect cognitive impairments can have on a person’s financial health is 'a significant problem,' said Oscar Lopez, director of the Alzheimer’s Disease Research Center at the University of Pittsburgh. If people are racking up debt or falling victim to financial scams or fraud, it could prevent them from having the necessary funds to care for themselves as their condition worsens."

"Changes in judgment, financial ability or decision-making are usually the first signs individuals and family members may notice, but 'too often these are denied or dismissed, when they may actually be a reason to get a thorough medical evaluation,' Heather Snyder, vice president of medical and scientific operations at the Alzheimer’s Association."

"There has traditionally been some reluctance to diagnose mild cognitive impairment or Alzheimer’s early, amid concerns that without effective therapies to cure or slow the progression of the condition, a diagnosis may only cause worry or other adverse mental health effects."  This study provides strong evidence for making a diagnosis earlier than later to prevent financial disaster. Money problems  continued even when "people were aware their cognitive abilities were declining."

It is especially import for older adults living alone to have a trusted family member or other adult be notified when bills are overdue as this is a clear sign of potential trouble. More financial entities need to  allow for a second party to be notified when problems occur with bills and other financial accounts.

By Washington Post writer Allyson Chiu November 30, 2020

Doing these five things could decrease your risk of Alzheimer’s by 60 percent, new study says

"A study presented Sunday at the Alzheimer’s Association International Conference in Los Angeles found that combining five lifestyle habits — including eating healthier, exercising regularly and refraining from smoking — can reduce the risk of Alzheimer’s by 60 percent. A separate study showed that lifestyle choices can lower risk even for those who are genetically prelifestyle disposed to the disease."

Rate yourself on five important metrics:  diet, exercise, smoking, alcohol consumption and “engagement in cognitive stimulation activities.”

"Individuals who ate a 'high-quality diet' of mostly vegetables, nuts, berries, beans, whole grains, seafood, poultry and olive oil — while avoiding red meats, butter, cheese, pastries, sweets and fried food — earned 1s. This was also true for anyone who exercised at least 150 minutes a week, whether by biking, walking, swimming, gardening or doing yard work."

"People who did not smoke, limited themselves to one glass of wine a day, and regularly — two or three times a week — engaged in mentally stimulating activities such as reading the newspaper, visiting the library or playing games such as chess and checkers also earned 1s."

"Individuals with a score of 4 or 5 — meaning they pursued four or five healthy behaviors over the period studied — were 60 percent less likely to develop Alzheimer’s compared with participants who scored 0 or 1. The results did not vary by race or gender.

Source: Hannah Natanson writing for The Washington Post, July 14, 2019 

 

 

How long are you likely to live? An important figure for retirement planning

"How often do you eat red meat? Do you exercise regularly? Cancer in your family? Did you go to college?"

"These questions – among the varied and complex predictors of longevity – are packed into a calculator that will estimate how long you could live. The calculator was created by Dr. Thomas Perls, an expert on longevity and the genetics of aging at Boston University."

Living to 100: https://livingto100.com/

"The Living to 100 Life Expectancy Calculator uses the most current and carefully researched medical and scientific data in order to estimate how old you will live to be. Most people score in their late eighties... how about you?"

"The calculator asks you 40 quick questions related to your health and family history, and takes about 10 minutes to complete. At the end, you will be asked to create an account to store your answers."

Thanks to the Squared Away Blog: https://squaredawayblog.bc.edu/squared-away/how-long-will-you-live-try-this/

Homeowner's Insurance Rates Going Up due to Climate Change-related disasters

 Surprised by increases in your HO insurance?

Even for property owners who have never filed a homeowner’s insurance claim, the premium will be likely go up for 2021 due to an increase in the frequency and severity of natural catastrophes and their resulting insurance claims across the US for the years 2017-2020. In short, losses have increased faster than the capital base of the insurance industry and the industry is taking steps to make sure that it is solvent and able to pay all of the claims which have and which will arise.

2020 was a record-breaking year for hurricanes and wildfires, both aggravated by climate change. Expect more of the same next year and in the coming decades as world leaders, and the U.S. in particular, have failed to reduce carbon emissions.

2021 Medicare Premiums

 In 2021, Higher Medicare premiums will apply for individuals with modified adjusted gross income above $88,000; for married couples who file a joint tax return, that amount is $176,000. These higher premiums affect only about 8% of beneficiaries. 

Most Medicare participants will pay $148.50 per month per person.