How To Avoid Pension Nightmares

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There’s a new book written by Rick Rodgers “The New Three-Legged Stool”  that details pensions, their problems, and what we can do to protect ourselves.

Rodgers writes that while the Pension Protection Act of 2006 “was designed to close loopholes in the pension system and addresses problems for the roughly 34 million Americans covered by traditional pensions known as defined-benefit plans,” one problem not addressed by the PPA and continues to affect millions of people of all ages, not just retirees, are pension miscalculations.

“Anytime you change jobs or take a lump-sum pension cash-out, you are at risk,” adds Rodgers. “Women are especially vulnerable to pension mistakes because they tend to move in and out of the workforce more often than men. For the most part, pension mix-ups aren’t intentional.”

According to Rodgers, how would a consumer know if there were an error that had been compounding for many years? How can they ensure that they’ll get what’s rightfully theirs when retirement arrives? He says it’s up to the consumer to keep track of their pensions.

Here are two things Rodgers says consumers can do:

  • Educate yourself about how your plan works.
  • Contact your company benefits officer and ask for a copy of the plan, not the summary plan description. (the U.S. Supreme Court ruled that you can’t depend on your employer’s summary plan description. The summary is an abbreviated form of the plan. The Court held that if there are discrepancies, the plan is the controlling document. You need a copy of the plan to determine how your pension is calculated. The plan document can run 50 pages or more.)

In addition, Rodgers says there are seven common pension mistakes to watch for:

  1. The company forgot to include commission, overtime pay or bonuses in determining your benefit level.
  2. Your employer relied on incorrect Social Security information to calculate your benefits.
  3. Somebody used the wrong benefit formula (i.e., an incorrect interest rate was plugged into the equation).
  4. Calculations are wrong because you’ve worked past age 65.
  5. You didn’t update your workplace personnel officer about important changes that would affect your benefits such as marriage, divorce or death of a spouse.
  6. The company neglected to include your total years of service.
  7. Your pension provider made a mathematical error.

In closing, Rodgers says for consumers to protect themselves, they should create a “pension file” to store all documents from your employer. Also keep records of dates when you worked and your salary, since this type of data is used by your employer to calculate the value of your pension.

Research on Prevention: Alzheimer’s Disease

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Alzheimer’s is a progressive disease that attacks the brain. The connections between brain cells (and the brain cells themselves) break down and die. This process destroys memory and other important mental functions, such as reasoning and judgment. Eventually, Alzheimer’s disease affects a person’s bodily skills, and robs them of their independence. It’s the sixth leading cause of death in the U.S., according to the Alzheimer’s Association.

There’s no cure for Alzheimer’s. And scientists are still working to understand its cause, or causes. But some research is beginning to point to what we can do to either prevent or lessen the risk of Alzheimer’s. In fact, scientists at the University of California, San Francisco said that over 50% of all Alzheimer’s cases might be prevented through certain lifestyle changes.

Let’s take a look at some of their recommendations.

1. Keep your blood sugar in control.

Specialists have known for some time about the link between diabetes and Alzheimer’s. (See a 2011 report from the Alzheimer’s Association for one example.) But it appears that even just having higher-than-recommended blood sugar can put you at risk.

A study at Georgetown University from 2013 found that a shocking number of patients with early-onset Alzheimer’s also had elevated blood sugar levels. And though they were under a doctor’s care, many of those test subjects didn’t know that they had pre-diabetes. So get informed on any family history of diabetes, and talk with your doctor about getting your blood sugar tested.

2. Check your cholesterol and blood pressure.

Something else coming to light as scientists study Alzheimer’s is this guiding principle: If it’s good for your heart, it’s good for your brain, too. In a study of people with Down Syndrome, reported in a 2013 issue of PLOS ONE, researchers found that high levels of cholesterol—particularly LDL (the “bad” cholesterol)—can cause disruptions to a particular chromosome that can lead to Alzheimer’s. And another 2013 study reported in the Journal of the American Medical Association Neurology found that high blood pressure correlated strongly with the risk of developing Alzheimer’s as well.

Knowledge is power. Work with your doctor to make sure you get your blood pressure and cholesterol levels checked regularly. If they’re too high, you can develop a plan together to lower them.

3. Review your diet.

Alzheimer’s research focusing on what we eat has the following recommendations:

4. Keep your body active.

It appears that exercise can help protect the part of the brain that governs memory and spatial navigation—one of the first regions attacked by Alzheimer’s. A 2012 study published in the Archives of Neurology suggests that a daily walk or jog could lower the risk of Alzheimer’s—or lessen its impact once it has begun. And another study, conducted in the Netherlands in 2000, examined men who were genetically prone to Alzheimer’s. The inactive men in the group were four times more likely to develop the disease than those who worked out regularly.

Think it may too late to get active? Think again. Researchers from Rush University Medical Center reported on exercise and Alzheimer’s in the April 2012 issue of Neurology. It appears that even if you start exercising after turning 80, you could still lower your risk of getting Alzheimer’s. So talk to your doctor about getting started on an exercise program that’s right for you

5. Keep your mind busy.

In 2003, researchers at Albert Einstein College of Medicine found that mentally active seniors could reduce their risk of developing dementia by up to 75%, compared to people who don’t regularly exercise their brains. Activities included playing a musical instrument, chess or bridge. This conclusion has been backed up by other studies, including one published in the Archives of Neurology in 2012. It appears that activities such as playing games, reading and writing keep your brain’s connections working, which helps ward off dementia. The advice seems clear: if you don’t want to lose it, use it.

A note in closing: Please keep in mind that these findings are primarily from early-stage research. That means that they haven’t been through enough clinical trials to be accepted as clear health guidelines yet. Talk to your doctor before making any lifestyle changes, and to better understand your own risk of Alzheimer’s.

How A Life Insurance Policy Can Fund Your LTC


The costs of long-term care are increasing every year, but most families do not understand what they will be confronting when it is their time to start paying for care. Too many people wait until they are in the midst of a crisis situation before they start trying to figure out how the world of long-term care works.

Most people want to remain financially independent and in control of their care decisions for as long as possible. People do not want to go onto Medicaid, yet consumers lack awareness and are unprepared for how they are going to cover the costs of Home Care, Assisted Living, Skilled Nursing Care, or Hospice. It is a subject typically ignored until a loved one is in immediate need of care.

There are ways to help people find solutions to their long-term care needs and problems. The best way to get help is to seek as much information as possible from an accredited independent advisor who is aware of all options in the market. A person can expect to be informed so they can make decisions about how to plan and fund their long-term care.

One solution analyzed is the growing use of life insurance policies as a tool to fund long-term care. Did you know that a life insurance policy can be acquired and the funds used tax-free to pay for assisted living, home care and all other forms of long-term care? Instead of allowing a policy to lapse or be surrendered, the owner has the legal right to convert the policy into a long-term care benefit plan. The only problem is — despite the fact that millions of people own life insurance, too few people understand their rights as the owner. Life insurance policies are assets. Think of them just like a house. The owner of a house wouldn’t just move out without selling their property. Why should the owner of a policy “move out” without first finding out the real value of their policy?

In the midst of growing demand and dwindling resources, it is now all too clear that the long-term care funding crisis has arrived. The problem for America is the most basic of economic principles – supply and demand. The “demand” of seniors that need (or will need) long-term care is growing at a much faster rate than the “supply” of resources (dollars) to pay for their care. This demographic-economic reality has forced the government to reduce benefit levels and raise barriers to entry for the three primary entitlement programs: Social Security, Medicare and Medicaid. The harsh reality is that more of the responsibility to fund retirement and long-term care is being pushed back on the individual (and their family).

Owners of life insurance have been in the dark for years that a policy can be used to pay for senior care. Millions of seniors needlessly abandon life insurance policies in the final years of their lives because they either can no longer afford the premium payments, and/or they are looking at eventually qualifying for Medicaid.

But a little known fact is that it is the legal right of every life insurance policy owner to convert their policy into a long-term care benefit plan to pay for senior care. The Supreme Court ruled over 100 years ago that life insurance is personal property and the owner has the same property ownership rights with a policy as they do a home or any other asset. A homeowner would not abandon their home for nothing in return and the owner of a life insurance policy does not need to either. A policy owner has numerous guaranteed rights for the use of their policy including converting the policy into a long-term care benefit plan.

We have reached the point that we can no longer ignore the realities of an ever growing population that will require long-term care, and the diminishing resources to pay for it. People able to sustain themselves with private pay dollars will benefit from access to higher-end senior living environments and care providers, greater choice, more control, and less financial impact on loved ones. Those unable to pay for long term care at some level on their own through the use of savings and assets (such as a long-term care insurance policy or a life insurance policy conversion), or with the assistance of family, will be forced to rely on the government.

New approaches to fund long-term care are here today and converting life insurance is an option available to all owners of policies. Due to legislative action taken up by national groups like NCOIL and introduced as laws in states across the country, as well as national media attention from news outlets such as The New York Times and The Wall Street Journal fewer and fewer policies will be lapsed or surrendered. Seniors and their families are beginning to learn that life insurance policies they have been abandoning for decades could instead be converted into a benefit to pay for senior care and delay their need to go onto Medicaid.