Be Aware of the Kiddie Tax Before Leaving an IRA to Children

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Grandparents may be tempted to leave an IRA to a grandchild because children have a low tax rate, but the “kiddie tax” could make doing this less beneficial.

An IRA can be a great gift for a grandchild. A young person who inherits an IRA has to take minimum distributions, but because the distributions are based on the beneficiary’s life expectancy, grandchildren’s distributions will be small and allow the IRA to continue to grow. In addition, children are taxed at a lower rate than adults—usually 10 percent.

However, the lower tax rate does not apply to all unearned income. Enacted to prevent parents from lowering their tax burden by shifting investment (unearned) income to children, the so-called “kiddie tax” allows some of a child’s investment income to be taxed at the parent’s rate. For 2017, the first $1,050 of unearned income is tax-free, and the next $1,050 is taxed at the child’s rate. Any additional income is taxed at the parent’s rate, which could be as high as 35 percent. The kiddie tax applies to individuals under age 18, individuals who are age 18 and have earned income that is less than or equal to half their support for the year, and individuals who are age 19 to 23 and full-time students.

If a grandparent leaves an IRA to a grandchild, the grandchild must begin taking required minimum distributions within a year after the grandparent dies. These distributions are unearned income that will be taxed at the parent’s rate if the child receives more than $2,100 of income (in 2017). In addition to IRAs, the kiddie tax applies to other investments that supply income, such as cash, stocks, bonds, mutual funds, and real estate.

If grandparents want to leave investments to their grandchildren, they are better off leaving investments that appreciate in value, but don’t supply income until the investment is sold. Grandparents can also leave grandchildren a Roth IRA because the distributions are tax-free.

For more information about leaving an IRA to grandchildren from Kiplinger, click here.

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State Properly Valued Sale of Medicaid Applicant’s Life Estate…

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An Ohio appeals court rules that the state correctly valued the sale of a Medicaid applicant’s life estate using the specific state Medicaid life estate law as opposed to the more general law on determining fair market value. Stutz v. Ohio Department of Job and Family Services (Ohio Ct. App., 3rd Dist., No. 15-17-02, Aug. 21, 2017).

Barbara Stutz owned a life estate in her property and her sons owned the remainder interest. She entered a nursing home and applied for Medicaid. The state approved the application but decided the life estate was an asset that must be valued. Ms. Stutz appraised the life estate at $2,000 and sold it to her sons for $1,800. The state determined that the correct life estate value was $24,941, and it imposed a penalty period on Ms. Stutz for an improper transfer of assets.

Ms. Stutz appealed, arguing that the state should have used the general definition of fair market value in state law, which defines fair market value as the going rate that property can be expected to sell for on the open market, to value her life estate. She presented evidence that local realtors and bankers valued her life estate at $2,000. Instead, the state used the state law that applies to Medicaid and life estates and ruled that $24,941 was the correct value. Ms. Stutz appealed to court, and the trial court affirmed the state’s decision.

The Ohio Court of Appeals, 3rd District, affirms, holding that the state properly valued the life estate. According to the court, “a specific statute prevails over a general statute,” so the state correctly used the life-estate-value statute rather than the general fair-market-value statute.

For the full text of this decision, go to: http://www.supremecourt.ohio.gov/rod/docs/pdf/3/2017/2017-Ohio-7287.pdf

For more on Medicaid Planning go to: http://www.raphanlaw.com/medicaid-planning-

A Medicaid Applicant’s Purchase of Life Insurance Policy Is Transfer for Less Than Market Value

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An Illinois appeals court rules that a Medicaid applicant’s purchase of a life insurance policy was a transfer for less than fair market value because the applicant did not receive any benefit from the policy. Moore v. State of Illinois (Ill. App. Ct., 4th Dist., No. 4-16-0414, April 11, 2017).

Nursing home resident Elda Buckley applied for Medicaid. On the same day, she purchased a whole life insurance policy for $15,000 that named Christine Moore as the beneficiary. The state approved Ms. Buckley’s Medicaid application, but it determined that the purchase of the life insurance policy was a transfer for less than fair market value and imposed a penalty period.

Ms. Buckley appealed, arguing that she purchased the life insurance policy for fair market value, so the transfer should not be subject to a penalty period. The state and the trial court affirmed the penalty period. Ms. Buckley appealed.

The Illinois Court of Appeal, 4th District, affirms, holding that the purchase of the life insurance policy was a transfer for less than fair market value because Ms. Buckley did not receive the benefit of the policy. According to the court, the “apparent purpose of [Ms.] Buckley’s purchase of the insurance policy, of which she would receive none of the proceeds, was to shelter assets from Medicaid while ensuring [Ms.] Moore received the benefits of her assets.”

For the full text of this decision, go to: http://www.illinoiscourts.gov/Opinions/AppellateCourt/2017/4thDistrict/4160414.pdf

 

READ THE TOP 8 MEDICAID PLANNING MISTAKES HERE>

Elder Abuse is a National Epidemic

Via Huffington Post…

When Helping Hurts

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Elder abuse is a national epidemic. Each year in the United States, an estimated 10 percent of older Americans are injured physically, debilitated emotionally, exploited financially and/or neglected — often by an adult child, spouse, other relative or caregiver. Elder abuse victims have a three-fold risk of death compared to their non-abused counterparts. Frequently, an elder is isolated, their mistreatment hidden.

In 2006, newspapers around the country headlined the story that Brooke Astor, the legendary New York City philanthropist and socialite, was financially exploited and neglected by her son and attorney. The case attracted national attention as her grandson, with the help of others, sought elder justice – first, by petitioning for guardianship to help his grandmother and those who were (also) helping her, and second, to help bring some of her perpetrators (his father included) to justice. The Elder Abuse Unit of the New York County’s District Attorney’s Office indicted and convicted Brooke Astor’s son and attorney. Elder justice was realized.

That is rare. Most of the millions of elder abuse victims, their suffering shrouded in silence, do not receive justice. Only one in 24 elder abuse cases are reported to authorities. What is not rare is that, despite an almost total lack of support or resources, family, friends and neighbors step up to help. Yet helping hurts, as confirmed by new findings of our research.

 

Staggering Number Know About Elder Mistreatment, Assist Victims, and Feel Distress

Along with colleagues at Cornell University, University of Toronto and Purdue University, we utilized Cornell University’s Survey Research Institute’s omnibus survey to learn about these concerned persons who step up for elder abuse victims — a population that had never been assessed. The survey results were recently released in The Gerontologist. They show that when findings are extended to the general population (U.S. Census Bureau, 2016), approximately 73 million adult Americans have had personal knowledge of a victim of elder mistreatment. Further, approximately 44 million adult Americans have become involved in helping an elder abuse victim. And for over 32 million adult Americans, just knowing about an elder abuse situation is generally highly stressful. Actually providing help to the victim tends to intensify this personal distress.

We need more research to understand what specific aspects cause this distress. We do know from conversations with concerned persons that the path to assisting elder abuse victims is often fraught with challenges. Concerned persons may witness the decline in the victim’s health and seek to obtain medical care, or provide what care they can themselves. They might feverishly focus efforts on trying to stop a financial exploiter from completely emptying bank accounts. They may try to lessen the victim’s despair. Often, they are often the only ones standing between the victim and the abuser, preventing the victim from slipping into total isolation.

Yet they are usually wholly unprepared for how this intervention might take a toll on they themselves. Relationships with friends they confide in and family may become strained, sometimes to the breaking point. They may suffer financial consequences. And seeing or confronting an abuser can be dangerous, so they personally risk becoming the target of abuse. Intervening can take real courage, and even more to remain involved. And it requires time, as elder abuse cases tend not to resolve quickly. It is not surprising that concerned persons can experience anguish, frustration and trauma. Yet like the victims they help, they are largely invisible: their deeds often not recognized, their needs unacknowledged.

 

Communities Can Help

What can communities do? A new program to be launched this spring in New York City is a beginning. The New York City Elder Abuse Center is launching a pilot helpline for concerned persons assisting elder mistreatment victims residing in New York City. Funded in part by the Fan Fox & Leslie R. Samuels Foundation, it will provide information, referrals and support. This is an important first step, but the need is great. Programs must be developed for concerned persons — and elder abuse victims — in every community. This will require support from foundations, private philanthropists, businesses and government. Brooke Astor fervently believed in a collectively expressed philanthropy, a

Elder abuse is a national epidemic. Each year in the United States, an estimated 10 percent of older Americans are injured physically, debilitated emotionally, exploited financially and/or neglected — often by an adult child, spouse, other relative or caregiver. Elder abuse victims have a three-fold risk of death compared to their non-abused counterparts. Frequently, an elder is isolated, their mistreatment hidden.

In 2006, newspapers around the country headlined the story that Brooke Astor, the legendary New York City philanthropist and socialite, was financially exploited and neglected by her son and attorney. The case attracted national attention as her grandson, with the help of others, sought elder justice – first, by petitioning for guardianship to help his grandmother and those who were (also) helping her, and second, to help bring some of her perpetrators (his father included) to justice. The Elder Abuse Unit of the New York County’s District Attorney’s Office indicted and convicted Brooke Astor’s son and attorney. Elder justice was realized.

That is rare. Most of the millions of elder abuse victims, their suffering shrouded in silence, do not receive justice. Only one in 24 elder abuse cases are reported to authorities. What is not rare is that, despite an almost total lack of support or resources, family, friends and neighbors step up to help. Yet helping hurts, as confirmed by new findings of our research.

 

8 Pretty Good Things For Seniors To Remember at Tax Time

Tax day, which is April 18th in 2017, is approaching and it is time to begin crossing T’s and dotting I’s in preparation for paying taxes. As tax time draws near, you want to make sure you file all the proper forms and take all deductions you’re entitled to. Following are some things to keep in mind as you prepare your tax form.

elder law nyc

  1. Gifts. Did you give away any money this year? The gift tax can be very confusing. If you gave away more than $14,000 in 2016, you will have to file a Form 709, the gift tax return. This does not necessarily mean you will owe taxes on the money, however.
  2. Medical Expenses. Many types of medical expenses are tax deductible, from hospital stays to hearing aids. To claim the deduction, your medical expenses have to be more than 10 percent of your adjusted gross income.  (For taxpayers 65 and older, this threshold will be 7.5 percent through 2016.) This includes all out-of-pocket costs for prescriptions (including deductibles and co-pays) and Medicare Part B and Part C and Part D premiums. (Medicare Part B premiums are usually deducted out of your Social Security benefits, so be sure to check your 1099 for the amount.) You can only deduct medical expenses you paid during the year, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance.
  3. Parental Deduction. If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to get an exemption $4,050 (in 2016) for him or her.
  4. Long-Term Care Insurance Premiums. Premiums for “qualified” long-term care policies are treated as an unreimbursed medical expense. Long-term care insurance premiums are deductible for the taxpayer, his or her spouse and other dependents.
  5. Social Security Benefits. Although Social Security benefits are generally not taxable, people with substantial income in addition to their Social Security may pay taxes on their benefits. If you file a federal tax return as an individual and your “combined income,” including one half of your Social Security benefits and nontaxable interest income is between $25,000 and $34,000, 50 percent of your Social Security benefits will be considered taxable. If your combined income is above $34,000, 85 percent of your Social Security benefits is subject to income tax.
  6. Home Sale Exclusion. Married couples can exclude from income up to $500,000 in profit on the sale of a home ($250,000 for single individuals). If a surviving spouse sells the home, he or she can still claim the exclusion as long as the house was sold no more than two years after the spouse’s death.
  7. Elderly or Disabled Tax Credit. Some low-income elderly or disabled individuals are entitled to a special tax credit. To be eligible, you must meet income limits. For more information, click here.
  8. Tax Refunds. Getting a federal tax refund should not affect your Medicaid or Social Security benefits. For a year after receiving a tax refund from the federal government, the refund will not be considered income or resources for SSI or Medicaid purposes. You can also transfer the refund within a year without incurring a penalty.

The IRS’s Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older. For more information, click here. The IRS also publishes a Tax Guide For Seniors.

More Free Helpful Legal Guides for Seniors, click here.

Is your family getting the VA support they deserve?

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Individuals who have risked their lives to serve and protect the United States of America and its citizens are entitled to a variety of benefits through the U.S. Department of Veterans Affairs (VA). Eligibility requirements vary for these benefits, but many veterans (and their family caregivers) are able to receive some level of coverage, financial assistance or support. This guide will help direct veterans and their family members to VA programs that may assist in paying for or providing long-term care, burials, pensions, and other benefits.

Get Your FREE Veterans Benefits Guide from AgingCare: Click Here

This guide includes the most up‑to‑date information on getting VA benefits.
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About AgingCare.com

AgingCare.com is the go-to destination for family caregivers, providing trusted information, practical answers to real-life questions, and ongoing support. Our mission is to help families prepare for and navigate the care of an elderly loved one. AgingCare.com has been recognized in both national and local media as an expert resource on elder care. AgingCare.com is paid by our participating providers, so we are able to offer you a completely cost-free service with no hidden fees.

Four Social Security Myths Debunked

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There are a lot of misconceptions surrounding the Social Security system. Here are four common myths and the truth about how Social Security works and its future prospects.

Myth 1: You Should Collect Benefits EarlyThis is one of the biggest Social Security myths. In 2015, more than half of Social Security recipients began collecting benefits before their full retirement age (66 for those born between 1943 and 1954), potentially costing themselves thousands of dollars in additional benefits. If you take Social Security between age 62 and your full retirement age, your benefits will be permanently reduced to account for the longer period you will be paid.

On the other hand, if you delay taking retirement, depending on when you were born your benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost of living increases. There are a lot of factors that go into the decision as to when to take Social Security benefits, but if possible it is usually better to wait until your full retirement age or older.

Myth 2: Your Money Goes into an Account with Your Name on It

When you pay into Social Security, the money is not set aside in a separate account, as with a 401(k) or IRA. Instead, your contributions are used to pay current recipients. When you start receiving benefits, people paying into the system will be paying your benefits.

Myth 3: Social Security Will Be Out of Money Soon

Many young people believe the Social Security system will run out of money before they have a chance to collect anything. Currently, the Social Security trustees predict that the trust fund will run out of money in 2034. Politically, it seems unlikely that Congress and the President would let this happen. Changes will likely be made to the system by either raising taxes (such as by lifting the cap on income subject to Social Security tax), reducing benefits for high-income individuals, increasing the retirement age, or doing something else that will allow Social Security to be fully funded. However, even if the trust dries up and there isn’t enough money to pay all the promised benefits, people will still be paying into the system and Social Security will be able to pay at least 75 percent of benefits.

Myth 4: If You Haven’t Worked, You Cannot Collect Benefits

If you haven’t worked outside of the home, you will not be able to collect Social Security benefits on your own record, but you may be able to collect them based on your spouse or ex-spouse’s record. Spouses are entitled to collect as much one half of a worker’s retirement benefit. This rule applies to ex-spouses as well, as long as the marriage lasted at least 10 years and the spouse applying for benefits isn’t remarried.

To learn more about Social Security, click here.

For Free Elder Law Guides, click here.

4 things to put on your to-do list for retirement prep

You may think you need a long and complicated list of tasks to accomplish your retirement goal. But a good place to start is with these four simple steps.

JUNE 20, 2016; Via Vanguard

Determine how much you need to save

Here’s where a bit of list-making—or the help of a financial professional—can make the process easier. Grab a piece of paper (or pull up a blank screen if that’s easier) and jot down some expenses associated with your retirement vision.

No matter what you see yourself doing once you retire, figure out some rough estimates for expenses you’re likely to have.

Mary Ryan“Common expenses—regardless of your plans— include housing, food, utility, and health care costs,” said Mary Ryan, a financial planner with Vanguard Personal Advisor Services.

No time for a checklist?

Consider working with a financial advisor, such as the professionals in Vanguard Personal Advisor Services®.

An advisor works closely with you to develop a customized goals-based financial plan according to your unique situation—and can manage your portfolio throughout your retirement years.

Learn more about how Vanguard Personal Advisor Services can help »

“The goal is to determine a general target of how much you’ll need to meet those expenditures, using the income you expect from things like Social Security, a pension, or annuity, along with the sum you’ll need tucked away in retirement or investment accounts,” she said.

Invest for retirement with an appropriate asset mix

Put your savings to work for your future through investing. A best practice is to invest in the right mix of stocks, bonds, and short-term cash reserves (your asset allocation), based on your goals, the length of time before you’ll need to use your savings, and your comfort with risk. Vanguard research shows that, even more than specific investment selections, asset allocation is a key component of investment success.

Anish Patel“A crucial part of determining your asset mix means being honest with yourself about how comfortable you are with risk, including when you might have to challenge your comfort level a bit for your long-term benefit,” said Anish Patel, also a planner with Vanguard Personal Advisor Services.

“Returns are the incentive to attract investors; that’s why investments with low risks also have low returns—because there’s less need to entice someone to make that investment. But risk comfort can be highly dependent on the market environment. When markets are good, many people think they have a high tolerance for risk, only to find when downturns occur, as they always do, that they have very little tolerance,” he said.

Review and adjust investments regularly, even when markets are turbulent

Markets don’t tend to move in slow-and-steady progressions. And when they shift, the changes can pull your asset allocation out of alignment with your set strategy.

“Regular reviews that focus on whether or not your asset mix is on target can help you know when to make adjustments so you can stick to your long-term plan,” said Ms. Ryan.

“Rebalancing aims to minimize risk rather than maximize returns,” Mr. Patel added.

Without rebalancing, “it’s possible for a portfolio to become overweighted with one type of investment. More often, this situation occurs with stock holdings when equity markets are strong. When stocks appreciate quickly and shift a portfolio’s balance, it’s more vulnerable to market corrections, putting it at risk of greater potential losses when compared with the original asset allocation,” Ms. Ryan said.

Minimize taxes

The saying, “Location, location, location” applies to more than just real estate. As Vanguard’s IRA investment research notes, the type of account in which you hold your assets can make a difference in the amount of taxes you owe.

“Investments that generate capital gains distributions or taxable income are better held in tax-advantaged accounts. For example, taxable bond returns are almost all income and thus subject to income taxes, so holding them in an IRA is a smart strategy,” said Mr. Patel.

Ms. Ryan added, “Conversely, tax-efficient investments make more sense held in taxable accounts. So it often makes more sense to hold equity index funds, which generally have less turnover and fewer capital gains distributions, in taxable accounts.”

Get help

If you need a sounding board as you complete the tasks on your to-do list, a financially savvy family member may fit the bill. An advisor can also serve as that sounding board. And, if you don’t have the inclination—or the time—to perform these steps, it makes sense to enlist professional help. (Vanguard has a team of financial planners, including Certified Financial Planner™ (CFP®) professionals, who don’t receive extra compensation for their recommendations; they work solely to help you reach your goals.)

Whether you work in partnership with a financial planner or act independently, checking these items off your to-do list can help you be more prepared for retirement.

* A Vanguard advisor may add about 3% on average to your net portfolio returns over time by following the Advisor’s Alpha principles discussed in Putting a value on your value: Quantifying Vanguard Advisor’s AlphaThis research isn’t an exact science. Potential value added relative to “average” client experience (in percentage of net return) is as follows: Investment coaching may add 1.50%; rebalancing your portfolio may add 0.35%; asset location between taxable and tax-advantaged accounts may add up to 0.75%; low-cost funds may add 0.45%; and tax-smart retirement spending may add up to 0.70%. It’s not added over a specific time frame but can vary each year, and according to your situation. It can be added quickly and dramatically—especially during times of a rapidly rising or falling market, when you may be tempted to abandon your well-thought-out investment plan—but it may be added slowly.

Notes:

  • Please remember that all investments involve some risk. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
  • Advisory services are provided by Vanguard Advisers, Inc. (VAI), a registered investment advisor.

 

The Healing Power of Pets for Elderly People

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Via agingcare.com

For elderly pet owners, who often live alone or in group facilities, pets can help reduce stress, lower blood pressure, increase social interaction and physical activity and help them learn.

“A new pet can stimulate someone to read up on an animal or breed, which can be very mentally stimulating and important at that age,” says Dr. Katharine Hillestad, a veterinarian with the office of Doctors Foster and Smith in Rhinelander, Wis., which provides online advice and retails pet supplies and pharmaceuticals.

Pets provide other intangibles. “Dogs—and other pets—live very much in the here and now. They don’t worry about tomorrow. And tomorrow can be very scary for an older person. By having an animal with that sense of now, it tends to rub off on people,” says Dr. Jay P. Granat, a New Jersey psychotherapist.

And pets can reduce depression and lessen loneliness. “Older pet owners have often told us how incredibly barren and lonely their lives were without their pet’s companionship, even when there were some downsides to owning an active pet,” says Linda Anderson, who with husband Allen founded the Angel Animals Network in Minneapolis. The couple speaks about the joys of pet ownership and has authored books.

In Angel Dogs: Divine Messengers of Love (New World Library, 2005), the Andersons tell about Bonnie, a golden retriever Marjorie and Richard Douse adopted, which became an indispensable family member. “We never felt alone when Bonnie was in the house. As we aged and tended to go out less, she provided us with loving companionship,” the Douses say in the Anderson’s book.

Psychologist Penny B. Donnenfeld, who brings her golden retriever mix Sandee to her New York City office, has even witnessed her ability to rev up elder owners’ memories. “I’ve seen those with memory loss interact and access memories from long ago,” she says. “Having a pet helps the senior focus on something other than physical problems and negative preoccupations about loss or aging.”

Pets benefit, too, particularly when older folks adopt older pets. “These lucky pets go from the pound to paradise. Since most of the adopters are retired, they have lots of time to devote to a previously unwanted pet,” says Chicago veterinarian Tony Kremer, who with his wife Meg operates Help Save Pets—Humane Society, which operates adoption centers.

Here are some things caregiver’s should consider when purchasing a pet for their senior mom or dad.

  • Right pet for the right owner. But because people age so differently, the decision needs to be made carefully—and not just by grown loving children who think it sounds like a way to provide camaraderie. Because there’s no single right pet, ask the following questions to help narrow the field, says Dr. Donnenfeld.
  • Are you set in your ways? If you don’t like change, you may not be a good candidate, say the Andersons.
  • Have you had a pet before? Amy Sherman, a licensed therapist and author of Distress-Free Aging: A Boomer’s Guide to Creating a Fulfilled and Purposeful Life thinks it’s best if the elderly person is an experienced owner.
  • Do you have disabilities? Dogs can be wonderful companions who encourage a senior with no major physical limitations to walk and interact with others, Dr. Donnenfeld says. For those who are physically challenged, cats often need less care than dogs, she says. A small dog that’s paper-trained or an indoor bird is also sometimes preferable, she says.
  • Do you need a therapy pet? If the person is very infirm or impaired, they may be a candidate for an assistance or therapy dog to help them function or interact.
  • Is the pet the right age? A puppy or kitten may not be the best choice for elderly owners because of the care they require. A young pet may outlive its owner. Birds especially have long life spans. Yet, it’s also important that the pet isn’t too old since it may start to have physical limitations and get sick, Dr. Donnenfeld cautions.
  • Does the pet have a good temperament? Although some older owners may think a Great Pyrenees would be too big to handle, Daffron found one mixed two-year old so mellow that it would have been a good pet for a senior. “Many older people might think they’d do better with a Jack Russell terrier because it’s small but they are very, very, very high energy and require more effort and commitment. So much depends on personality,” she says.
  • Is the pet healthy? It’s important that any pet be examined by a professional. “You don’t want to compromise an older person’s immune system since some pets carry diseases,” says Dr. Hillestad.
  • One pet or two? While multiple pets can keep each other company, that may not be a good idea for an older person, says Dr. Hillestad. “Two puppies may bond with each other rather than with the owner,” she says.
  • Are finances an issue? Pets cost money. A small puppy can run more than $810 its first year for food, medical care, toys and grooming while a fish is less expensive–about $235, according to the American Society for the Prevention of Cruelty to Animals. If the pet takes ill, dollars snowball. Groups are available to help allay costs.

Susan Daffron, author of Happy Hound: Develop a Great Relationship with Your Adopted Dog or Puppy (Logical Expressions, 2006), has taken pets to nursing homes through shelter outreach programs. “I go down halls and people will say, ‘Oh, this looks just like my dog,'” she says. She has also helped elderly folks adopt the right animal. One woman, 86, wanted to be able to walk a dog but didn’t want a hyper pet. “She was good at judging her limitations,” Daffron says.

Angie Jones became interested in training therapy dogs after bringing her dog Hunter to visit her late father in a retirement home. “It took us half hour to get to my dad’s room because everyone stopped us along the way and wanted to pet the dog and tell me about their dog,” she says. “Hunter brought my father great joy and opened the door of communication since he was more of a recluse,” says Jones who started Central Ohio Good Shepherds, a chapter of Therapy Dogs International Inc.

Where to find the pet. While breeders are a good source, some shelters also provide a pet for less and offer the advantage of rescuing it from euthanasia. Purina Pets for Seniors partners with 200 shelters nationwide to provide seniors pet adoptions at a reduced cost (www.petsforpeople.com). Local services also exist such as Paws/LA in Los Angeles (www.pawsla.org).

Shelter employees often know the pet’s personality well and can make a good match, says Daffron. Online pet shopping is also possible, thanks to sites like www.petfinder.com, which pairs owners with 250,000 adoptable pets from 11,000 animal and rescue groups nationwide.

How to provide care long-term for a pet. Because an older owner may take ill or die, it’s important that the pet is provided for in a will and a caregiver named, says Dr. Hillestad. Even more basic is that someone knows that an elderly person has a pet. “If the person is rushed to the hospital, it could be left alone if nobody knows,” says Allen Anderson.

RELATED ARTICLES: HOW PET THERAPY HAS CHANGED ASSISTED LIVING

Online Retirement Planning Calculators Measure Risk Poorly, Study Finds

If you are retired or are nearing retirement, the main questions on your mind are probably “Will I run out of money in retirement?” and “Will I be able to maintain my standard of living?” For answers, people often turn to free online retirement calculators that gauge how much users will need to save to achieve their retirement objectives, based on details about their finances.

elder law nyc

But how well do these calculators account for the inherent risks in retirement, such as how long you will live, how your investments will perform, what the inflation rate will be, and health care and long-term care costs? Not very well, according to a 2009 study by the Pension Research Council.

“We conclude,” the study’s authors write, “that on the whole, the tools do not highlight nor address retirement risk particularly well; rather, they mainly mask risk.”

The authors, retirement experts Anna M. Rappaport and John A. Turner, reviewed the available research on five leading Web-based calculators to see how they handle post-retirement risks. The calculators they looked at were Fidelity’s Retirement Income PlannerAARP’s retirement planning calculatorMetLife’s calculatorthe U.S. Department of Labor’s calculator and T. Rowe Price’s Retirement Income Calculator.

In their working paper “How Does Retirement Planning Software Handle Post-Retirement Realities?” Rappaport and Turner conclude that while the calculators “can provide a rough idea of whether the user is on target for retirement,” all inadequately assess the risk of running out of money.

For example, one calculator determines income sufficiency based on average life expectancy and overlooks the very real chances of living longer than the average. Another assumes that everyone, even if not married, receives the same Social Security benefits. Several do not permit calculations to take spouses into account. Among the authors’ other findings:

  • None of the consumer calculators they evaluated treat inflation as a risk, instead assuming that inflation is constant over the retirement period analyzed.
  • None treated expected medical and long-term care expenses as a risk factor or alerted users to the potentially huge impact such expenses could have on retirement plans.
  • Few have checks on inconsistent or outlandish assumptions. For example, many programs permit the user to specify long-term risk-free rates of return of 10 or even 20 percent.
  • Some calculators do not ask users to indicate expected inheritances or other one-time receipts of assets, and some do not include the value of housing as a source of retirement income.
  • Several of the programs ignore taxes, leading users to conclude that they have more retirement resources than they actually do.
  • The calculators cannot take account of extreme events such as the recent financial crisis, in which housing values have fallen and mortgage rates have risen — at the same time that people are losing jobs.

The authors note that “consumers or financial professionals working with them could benefit from trying alternative programs and scenarios within each program.”

The study also looked at retirement planning software for financial planning professionals. The authors concluded that while these tools are more complex than their consumer counterparts, they still contain flaws.

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