Financial New Year’s Resolutions You Can Keep

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Did you make any newly intended resolutions concerning your personal finances last January? If so, how did you do? Did you attain your financial goals, or was this year a total financial washout for you? While December 31 is a day to reflect on the year gone by, January 1 is a time to look forward to the New Year, review your financial scorecard for the past year, and then look for ways to improve in 2015.

There’s a good chance last year’s resolutions didn’t stick. According to a report from the University of Scranton’s “Journal of Clinical Psychology” only 8% of us actually achieve our New Year’s resolutions. The good news about New Year’s resolutions is that you get a fresh crack at them each year. Here’s some financial changes you should resolve to make in 2015.

Calculate Your Net Worth
If you haven’t done so already, the New Year is as good a time as any for determining what you’re worth (financially, of course). Calculating your net worth is a key step to assessing your financial health and reaching your financial goals. Looking closely at all your assets and liabilities helps create a clear picture of where you are prioritizing your current spending and saving and where you need to make changes in your spending and saving habits.

It’s a good idea to recalculate your net worth each year to keep on top of your progress towards your financial goals and correct any mistakes you’re making before they create overwhelming debts. Many sites, including Investopedia, offer free tools to help you calculate your net worth. The resolutions you need to make will become more obvious after making this calculation.

Reset Your Retirement Savings
At work, you probably have the opportunity to save for your retirement through a 401(k), 403(b) or 457 plan sponsored by your employer. If so, consider that most people find it easier to max out their retirement contributions by budgeting to contribute a set amount each month.

Employer Plans – If you have access to a 401(k), 403(b) or 457 plan at work, consider instructing your employer to withhold enough through salary deferrals to ensure that you reach the maximum limit each year. If you’re 50 or older by December 31, bump that amount to account for the additional catch-up contributions you’re allowed to make. If you are paid on some other frequency, such as weekly or bi-weekly, simply divide the contribution limit by the number of your pay periods for the year.

Of course, you should save only amounts that you can realistically afford, as contributing more than you can afford may result in having to incur debts to cover everyday expenses. To determine how much you can save each period, incorporate your retirement savings into your regular budget.

Are you self-employed? If so, depending on your income, you can contribute to an SEP IRA, profit-sharing plan or independent 401(k) plan. And if you’re 50 or older by December 31, the contribution limit jumps for independent 401(k)s, helping you save even more.

Don’t Forget About IRAs – Even if you’re covered under a retirement plan at work, you and your spouse can each contribute to a Traditional IRA or Roth IRA, as long as your combined taxable wages and net self-employment income is not less than the total amount contributed. Anyone 50 or older can contribute an extra $1,000, increasing the total allowable contribution to $6,500, or $541.66 per month. Keep in mind, however, that in 2014, a modified adjusted gross income of $60,000 to $70,000 ($95,000 to $115,000 for married couples filing jointly) puts you in the phase out range for deducting your IRA contributions.

Update Your Savings and Debt Reduction Goals
Creating easy access to your funds can be quite tempting, and if you are like most people, you will spend money that you can easily attain. Therefore, to help you reach your goal, be sure to transfer amounts earmarked for savings from your checking account to a designated separate savings or investment account that is not easily accessed, making it less tempting for you to spend the money that you have managed to save.

Take a few minutes now to set new savings goals for 2015, including how much you would like to add to your retirement nest egg, your children’s education fund or the down payment on your home. You should also reset how much you plan to pay on your personal loans, debts and home mortgage accounts.

And don’t forget about paying some extra principal toward your mortgage payment each month. By doing so, you’ll earn a risk-free return on that money equal to your mortgage interest rate. Plus, you’ll cut down on the number of years it will take to pay off your mortgage. However, if you must choose between adding to your retirement nest egg and paying extra on your mortgage, take the time to determine which option is more suitable for you.

Other Resolutions
Rebalance Your Investment Portfolio – The previous year was no different from any other year: some sectors over-performed and some sectors under-performed. Chances are that the sectors that did the best last year may not enjoy a repeat performance this year. By rebalancing your portfolio to its original or updated asset allocation, you take steps to lock in gains from the sectors with the best returns and purchase shares in the sectors that have lagged behind last year’s leaders.

Pay Down Your Credit Cards.- If you owe money on your credit cards, determine how much you can realistically afford to pay off during the year. For best results, try not to charge additional purchases on those cards while you’re trying to pay down what you owe. If you have high interest credit card balances, consider whether it would be more beneficial to pay off those high interest debts or to add to your savings.

Review Your Credit Report – Review your credit report, and take steps to repair any negative aspects. Now that you’re entitled to three free credit reports each year, there is no excuse for not reviewing what is one of your most important financial reports, especially since errors in these reports are not uncommon. That said, obtaining a truly free credit report isn’t as easy as some companies claim, so be sure you know all the terms and conditions before requesting a report. A poor credit report could adversely affect the amount you are able to save, as it could result in you paying higher interest rates on loans, which reduces your disposable income.

Review Your Life Insurance and Disability Insurance Needs – As you move through your career, your life and disability insurance need to continue to change. Give some thought as to how much protection you need and compare it to the coverage you currently have through your employer’s benefit package. Consider whether you need more or less life insurance, and whether your needs would be better satisfied by term or permanent life insurance. Also, review your disability insurance coverage to determine whether you have enough coverage.

The Bottom Line
Be cautious about setting too many or unrealistic financial goals. Otherwise, you may be unable to accomplish any of them. Take this opportunity to restate your financial resolutions simply and clearly for the New Year. It may be a good idea to maintain a checklist to keep track of how you are doing throughout the year, so that you can make any necessary modifications.

Fantastic Voyage

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Ever been lost on a new trail on a hike? Or confused between north and south in a new city? Or after a certain age, unsure if you really took that anti-cholesterol pill last night, or was it the blood pressure pill?  They kind-of look the same.

GPS apps in your handheld may lead you back to the right path, but keeping track of your pills is another matter. Only about 50 percent of patients take their medications as prescribed. And, according to the Centers for Disease Control and Prevention, in 2010 almost 40 percent of adults older than 65 were taking five or more prescriptions a day.

Managing real and potential medication conflicts and confusions is more pressing as 10,000 baby boomers turn sixty-five every day, and 90 percent suffer at least one chronic illness. Many boomers are now swallowing a cocktail of medications prescribed by various specialists: pain medicines for aching backs, antidepressants, proton pump inhibitors to control gastric distress, vitamins and other over-the-counter supplements.

With families sometimes far away and many older people unable to afford personal caregivers, companies have searched for a technological solution to monitoring medicine.

Forget armband monitors like Fitbit, the newest body monitors are as tiny as BBs. These so-called nanomeds, miniscule sensors embedded in a placebo pill that you swallow, set up shop in your stomach. As they slowly work their way through your system, these “ingestibles” – which are actually not digested – are switched on by contact with saliva and/or gastric juices. The signal is picked up by another sensor which looks like a Band-Aid and is worn on your chest.

This system records medicine intake as well as other measures, such as heart rate. The information shows up on your smartphone or tablet, via Bluetooth and can automatically go to your doctors, family members or caregivers, with your permission.

“We are entering the commercial era of the Internet of Things – your car, your clothes and increasingly your personal care products are going to be connected,” says Andrew Thompson, CEO of Proteus Digital Health, which makes these “ingestibles.”

He adds that the goal is to connect major health systems to consumers “to allow them to switch on their own health care, creating critical information that can be used to ensure they and their doctors make positive decisions about use of medicines and personal health choices.”

Proteus was named after the submarine Proteus, in the 1966 sci-fi classic Fantastic Voyage.  A super-miniaturized sub and its a crew were injected into a blood vessel to fix a brain clot. And that was named after the Greek sea god Proteus, resulting in the adjective protean which has “positive connotations of flexibility, versatility, and adaptability.”

The Food and Drug Administration approved these devices in 2012, but they’re not on the open market yet. They’re still being tested in pilot projects, including with England’s National Health Service.

Proper use of powerful, sophisticated meds aimed at keeping the elderly active and out of institutional care, Bill Satariano of the UC Berkeley’s School of Public Health believes it will depend increasingly on these “indigestible chips.”

He says it’s part of the field of “techno-wayfinding” or relying on newer and newer information technologies to help us keep track of where we go, what we eat or drink and increasingly whether we’re following doctor’s orders in our pill consumption.

Satariano’s Berkeley colleague, David Lindeman, noted in a report published last year that these and other forms of info-tech will play critical roles in what is broadly described as “connected health.” That relies on Internet-based technologies to help provide care in people’s homes or other non-clinical settings. “One dimension of these technologies is that they can be used to monitor individuals with chronic conditions to detect, and thus prevent, complications and crises that can lead to acute episodes. To maintain their health and well-being, it is just as important to provide individuals with automated health coaching, based on monitoring vital signs, activity, and behavior,” the report says.

For example, if an aging baby boomer has elevated blood sugar levels, her medical team can find out about it (information that comes into the boomer’s own cellphone and is then distributed to whomever she’s designated) and correct the problem before the levels get dangerous, even if she doesn’t even notice.

Separate monitoring devices are, however, just the beginning of indigestible medicine. Coming soon, according to one senior executive at Proteus Digital, will be the implantation of these nearly invisible chips in the actual prescription pills themselves, relieving the patient of even having to remember to take the monitoring pill, because the pills could send back the message that they’re now in the system.

All these new “wayfinding” health technologies could improve both medication usage and effectiveness for elders aging at home, and helping them have a better quality of life. And, these could reduce or eliminate expensive critical care in hospitals.

All good, but some raise a possible dark side: is this the ultimate Orwellian Big Brother technology, like an electronic bracelet attached to your stomach?

Satariano’s answer? “Without question. We always have to ask what is the cost to each technological advance.”

Research for this article was supported by a Journalists in Aging Fellowship, a collaboration of New American Media and the Gerontological Society of America, sponsored by the Silver Century Foundation.

Pay Less For Medicine By Not Using Health Insurance

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You might be paying more for your prescriptions at the pharmacy if you use your health insurance than if you pay cash out of pocket. How can that be?

Say your doctor prescribes a generic drug and, using your health plan, your copay for generics is $10 per 30-day supply. If you submit your purchase through your insurance, you will pay the $10. But many discount stores, pharmacy chains and supermarkets have deals for common generics that could cost less. Stores including Wal-Mart, Costco, K-mart and Target have programs that offer about 150 to 300 generic drugs at the discounted price of $4 per 30-day supply.

The retailers do this as a marketing ploy, explains Charles Coonrod, principal of Foundation Strategies in Katy, Texas. “They get you to come in for the drugs and expect you’ll buy other things while you’re there.”

Thus, your generic-drug copays through your health plan can be higher than the price of the drug. Health plans often set an average price to cover the cost of most drugs in the tier, which means that some drugs could be sold for less.

Ultimately it depends on the drugs, your health insurance plan, and where you buy it, says Dr. David Belk, who has an internal medicine practice in the San Francisco Bay Area.

Generic drugs for common conditions

The generic drugs in many retailers’ discount programs are prescribed for the most common chronic conditions including arthritis, heart disease, hypertension, diabetes and depression, Belk says. (The drug-discount programs aren’t necessarily nationwide because some states have laws prohibiting retailers from pricing drugs below cost.)

If you’re taking four pills a day, as many people do as they age, you can save $6 per prescription. That’s $72 a year per medication or $328 for four. You could save more if your copay is higher for generics, and some are.

But if you want to take advantage of a retailer’s drug-discount program, you have to tell the pharmacist you don’t want to use your health insurance. Your health plan and your pharmacy would prefer that you don’t do that, Belk says. “They get more money when you use your health insurance.”

But there’s nothing to stop you. “Your health insurance can’t force you to do anything,” Belk says. His advice: Don’t tell the pharmacy where you’re buying the generics that you have health insurance. “It’s not like they’re the National Security Administration and they’re monitoring you everywhere you go,” he says. What they don’t know won’t hurt them.

Brand-name medicine for less

If the prescription medicine you take is a brand-name and doesn’t have a generic, you still may be able to get it for less by not using your health insurance. Many plans have copays that are a percentage of the cost of the drug. The cost of some brand-name drugs can be quite high even if you’re only paying a percentage.

There are discount-drug cards available that can get you substantial discounts on generic and brand-name drugs at participating pharmacies in their networks, says Kev Coleman, head of research and data at HealthPocket, which helps consumers save money on their health care. For example, the Easy Drug Card offers discounts of up to 75 percent at more than 57,000 participating pharmacies.

The only catch is you can’t use both your health insurance and the discount cards. What you need to do, Coleman says, is call different pharmacies and ask about their prices for the drugs you were prescribed. Give them your insurance information and ask for the price with and without it. Your price will be different if you have Aetna than if you have Cigna, for example, and will depend on the rules of your individual plan. Copays can also vary among plans from the same insurer.

After you get the cost with your health insurance, ask if they take a discount card. If they do, ask for the price for the same drug with the discount card. You may need to keep a spreadsheet if you’re pricing several drugs and calling several pharmacies.

Do your research

Never assume a pharmacy is going to tell you the cheapest way to buy your medications. You have to play investigator and do it yourself, Coleman says.

Call more than one pharmacy, too, Coleman says. “There can be significant price variations between pharmacies in the same town,” he says. You have to be a responsible consumer, he says. “The only cost for talking to multiple pharmacies is your time and that can be a lot cheaper than the cost of some of these drugs.”

There also are websites that list the cost of some drugs. The cholesterol-lowering atorvastatin (known by the brand name Lipitor) has prices ranging from $76.78 at Rite-Aid to $15.30 at Kmart for a 30-day supply of 20 milligrams. The beta-blocker metoprolol (Lopressor) found a 60-day supply of 25 milligram pills ranging from $3.50 for mail order from HealthWarehouse to $9.99 at Rite-Aid with free membership in its drug program.

Reaching out-of-pocket limits

Unfortunately, there can actually be a catch to saving money. If you don’t use your health insurance to make your purchase, the money you spend won’t count toward your out-of-pocket annual limits. Under the Affordable Care Act, most plans have annual limits on the amount that people have to pay out-of-pocket for prescription drugs.

Coleman doesn’t see a problem because most people don’t reach their out-of-pocket limits by the end of their plan year. But if you are taking a lot of expensive medications and have been hospitalized, you could be close to reaching your limits. If you are and it’s still early enough in the year, you might want to just pay the higher price for the medications and reach your out-of-pocket limit sooner so that your health insurance kicks in 100 percent. It’s really a matter of doing the math, Coleman says.

Safety could also be an issue, says Coonrod. If you use different pharmacies for your different drugs, there’s no system in place to check for drug interactions, and “no red flag to potential adverse reactions.”

But if you’re among the growing number of people coping with a high-deductible health plan, it pays to take the time and figure out how to get the medications you need for the least amount of money, Coleman says.