Let’s close out the month with a quote by one of my heroes, Woodrow Wilson.
If you want to make enemies, try to change something.
Change, even though it is coming at such a fast pace in the twenty-first century makes just as many enemies today as it did one hundred years ago when Wilson made this comment.
Source: Leaders of deficit panel say public’s confidence at stake – USATODAY.com.
Since this is an optimistic post and I am short of optimism lately it will be a short one.
In these times of total political gridlock it is nice to see at least some conciliatory words from the members of the “super committee”. These are the members of congress who have been assigned to come up with a plan for deficit reduction by sometime in November. Maybe, just maybe some in Washington are beginning to “get it”. With less than one in five citizens thinking they are doing a good job they certainly need to get it soon.
I know that every parent wants to see his kindergarten kid get an evaluation of “plays well with others..” so using those words when talking about cooperation in congress seems somehow appropriate.
But what do I know.
In honor of my fellow blogger, Bob Lowry over at Satisfying Retirement, who is visiting the island this week I wanted to bring up a picture of my bride taken on our honeymoon there in 1986. We haven’t been back since but I expect that Bob will see a much different island than we did.
Have a good time buddy….
Source: Post office turns to small-town mini-mart for savings – USATODAY.com.
There is an old saying ”What goes around comes around” and that seems to apply to the much beleaguered Post Office. According to the above article they are starting to move small town post offices out of their specialized government owned building and back into local retail establishments. I am old enough to remember that when I lived in a rural community while I was growing up the post office was in the general store/grocery.
According to the article above they are planning to close around 3,700 offices and move them elsewhere. If they had had this epiphany some years ago they might not be in the dire straits they are in today. The post office, like so many other government controlled agencies and even many large corporations, are too reluctant to make any changes until a crisis demands it and for the post office crisis is demanding it. And then there is Saturday delivery. Why haven’t they eliminated that already?
Any forward looking technocrat could have predicted the reduced need for post office services several years ago. Now that the Internet is in the majority of American households most families, including mine, use on-line services to pay monthly bills. It now turns out that the majority of deliveries by the postal service is junk mail. Most people now send emails to the ones they love instead of writing a letter as they did in the old days (ten years ago ). Because of the speed of the Internet the post office is now called “snail mail”. Will the post office one day go the route of the buggy whip manufacturer? Probably, but that will still be sometime in the future (I think).
Maybe the Post Office can morph themselves into something else to maintain their existence. Maybe they can make themselves into a competitor of UPS or FedEx? I hope they don’t just go out of existence; that would mean too many jobs lost in these times where jobs are moving off-shore at a inflaming rate.
But what do I know…
This is probably one of the most famous barns in America.
The average consumer carries over $16,000 in credit card debt. And there is usually a mortgage and probably a car loan in the pile too. They say the total personal debt of U.S. consumers is over $11 trillion. Unfortunately many of those are middle aged and moving into their retirement years. With all this debt they are obviously not putting away much for their later life.
It is quite startling how much debt many seniors today carry into their retirement! Four out of ten carry a mortgage with them into their golden years. Almost five out of ten carry a $6,000 credit card debt! My father taught me to “put money away for a rainy day”. While that message stuck with me it obviously didn’t with many of my cohorts.
What makes one person maintain a lifestyle that is debt free while another piles it on? My father and his generation were called Depression babies as he was six years old at the onset of the Depression of the 1920s. My grandfather had a pig farm and was not seriously affected by the depression but I still remember Dad’s stories about some of his neighbors who were very much affected. Depression babies like my dad did not like debt but for the most part they are all gone now and quickly being replaced by us baby boomers. From the evidence it looks like many of us have not followed in our fathers’ footsteps about being debt free. Why are so many so ill-prepared for their senior years? I’m sure part of it has to do with “wanting it now”.
For some who are on retirement’s door it is already too late and that means they have to keep working whether they like it our not. Unfortunately, even among this group, there will be those who because of health or other issues will not be able to work in their senior years. What will happen to them. Most likely they will be trying to live on basically Social Security benefits which average usually a little over $1,000 per month. What would happen to those if even the Social Security safety net were removed? According to some in the audience at the latest Republican presidential debate we should let them die! I hope and pray we never become a nation who lets that happen! But sadly I didn’t hear of anyone on the stage renouncing that idea!
I see the results of trying to live on Social Security alone weekly at the soup kitchen I volunteer. Our lunch and dinner guests increase by about 25% the last week of the month when the checks are running out. We all would like to say “that happens to others” but I’m sure the “others” did not believe it would happen to them either. No matter how close to retirement you are it is never to late to be reigning back some expenses in order to save a few dollars.
Going back a way in my portfolio to pull out this picture of the Duck Pond in Central Park NYC. It was taken during our last visit there before moving back to Indiana in 2000.
This picture is obviously a digitized one of a picture I took almost forty years ago. This was a newly erected office park on the north side of the city.
Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough.
The advice in this quote is needed more today than it was even in Lincoln’s time. Most of the people in Congress are, as Lincoln himself was, lawyers by trade. A few posts ago I lamented about how we need a true leader during these trying times. Lincoln was definitely a leader during even more trying times than we find ourselves in now. If only the members of congress would take to heart his words found here and compromise with their neighbors in congress we could get through these times. Take the “superior opportunity” given you for being a good man (or woman). There is time enough for the political bickering later. Let’s get to the business of the common good now…..
This is the second of two posts about my experiences with recently joining the Medicare System. The first post gave you the types of plans that are offered to those who turn 65. There are a number of decisions that have to be made during this enrollment process. I have to warn you up front that this is really pretty boring stuff. I put it off as long as I could and if you are not that close to Medicare I would probably advise you to just skip this post
The first decision I had to make was to decide whether to enroll in my pension Advantage Plan. This really ended up being no decision at all. Since I was a management employee my previous employer was under no contractual obligations as far as my health care plan was concerned. Over these eleven years the cost of my healthcare insurance through them has increased over ten times what is started out. When I looked into their Advantage plan it turned out to be nothing but a stripped down Part D coverage and nothing else. If I join this Advantage plan it would preclude me from getting a Medigap policy. The decision was therefore easy to decline their coverage and go out on my own.
So, the next thing on the list was the Medigap policy. I spent over a three weeks on this task. I studied hundreds of pages of various insurer’s plans and then chose one. I will not say which one I chose but in reality there is generally not much difference between one Medigap insurer and another. The real choice turned out to be which of the various Medigap plans I would choose. They are defined by Medicare and are identified by letters between “A” through “N”. Some covered only when I would spend so many thousand dollars. Some have differing levels of co-pays. Some cover almost everything Medicare does not cover. When comparing what I paid last year for private coverage and what I would pay starting next month for Medicare coverage I choose Plan F.
The final decision was what Part D (prescription) plan I would choose. Most of this decision process involved studying how much I would pay for my current prescriptions. Fortunately there are software programs that allowed me to enter my prescriptions and see what each plan would pay. Again most of the plans were pretty equal but I did save about 15% by going to one insurer. One of the gotchas on Plan D is that the insurer can change anything he want anytime during the year so there is no guarantee as to what he will pay in the future.
So now I have my Medicare card with Part B, my Medigap policy, and my Part D cards in hand. What is the final result? Now that I am on Medicare and all these other plans my medical insurance costs will be about 50% less in 2012 than they were in 2011. That is a far cry from the annual 25% increase year over year for the last eleven! Was it worth all the work to get here? Absolutely, but it certainly could have been easier.
So here I am ready for October 1 and ushering in the final thing that makes me an “official” senior citizen. Bring it on!!
I will soon move onto the Medicare roles. It has been quite a journey to get here so that is what this and the following post will be about. I hope the post might help some of you out there who will be going through the same thing in the coming months or years.
I want to make it very clear that I am not by any means an expert in this area so what you will be getting is an ordinary guy’s view of these plans. In this post I will try to explain the options. The next post will give you my personal experiences with the process of choosing and enrolling in the system.
First the basic definitions (from a pure layman’s understanding):
- Medicare Part A – This includes coverage for Hospital stays and the like. This basic plan is provided at no costs to me and covers approximately 80% of most hospital charges. I am left to pay the remaining 20% of out pocket.
- Medicare Part B – This covers doctors, testing and things like that. Part B if I choose to enroll (which I and most others did) costs a little more than $100/month to new enrollee’s. Again it covers about 80% of the costs and I am left with the remaining 20%.
- Medicare Part D — This is the plan that was started in 1993. It focuses on prescription drug costs. Depending on which drugs you take it covers varying degrees of the total cost of my medicine. When I reach a certain level of costs it quits paying anything. At a future point beyond that is starts up again. This area where I would pay 100% of the costs is called the “doughnut hole”.
- Advantage Plans — These plans, which are intended to take the place of Part D plans and usually cover some of the uncovered costs of Part A and B or even replace Part B. These plans are sometimes offered by companies as part of the their pension plans. People who enroll in Advantage plans typically cost the Medicare system about 10% more than those who stick with the traditional plans. If a person chooses to enroll in an Advantage plan they are not eligible to enroll in Part D or any supplemental plan (see the next bullet).
- Medicare Supplemental Plans (also called Medigap Plans) — These are plans that are offered by private companies, under Medicare rules and reviews. They cover to varying degrees the uncovered parts of Part A and B. The Medicare system has defined almost a dozen options that companies can provide to those who choose to join them.
So that in my nutshell is what the Medicare system and plans are all about. Now on to some of the things I have learned about all these options. While Part A is basically free to me the 20% out-of-pocket can be very substantial. For instance when I had a heart event about five years ago the one hour spent in the angioplasty operating room and associated hospital stay and doctor’s charges cost about $40,000. So my out-of-pocket would have been $8,000! Since my event was somewhat minor I’m sure the costs of other procedures can exceed $100,000 in many instances. $20,000 out-of-pocket would put quite a hit on my or almost anyone’s retirement savings.
Given the above example of the costs for just one medical event I and most people choose to enroll in some sort of supplemental plan. Those plans vary in costs from about $100 to a few hundred a month depending on coverage. Like the Part D plan, the costs of the supplemental plans is pretty much left to the private insurers. They can raise their charges with little or no review by others.
There are literally hundreds of companies who offer various plans for supplemental insurance as well as Part D coverage. It is up to each senior to determine what plans to personally have.
With all these basic definitions now covered, next time I will be talking about my personal experiences with navigating this system and how I came out in the end.
Here is another picture of Pleasant Hill Shaker Village near Lexington KY. The fall colors are absolutely beautiful there.
O God, be Thou exalted over my possessions.
Nothing of earth’s treasures shall seem dear unto me
if only Thou art glorified in my life.
Be Thou exalted over my friendships.
I am determined that Thou shalt be above all,
though I must stand deserted and alone in the midst of the earth.
Be Thou exalted above my comforts.
Though it mean the loss of bodily comforts and the carrying of heavy crosses
I shall keep my vow made this day before Thee.
Be Thou exalted over my reputation.
Make me ambitious to please Thee
even if as a result I must sink into obscurity and my name be forgotten as a dream.
Rise, O Lord, into Thy proper place of honor,
above my ambitions,
above my likes and dislikes,
above my family,
my health and even my life itself.
Let me decrease that Thou mayest increase,
let me sink that Thou mayest rise above.
- A.W. Tozer
This is a very thought provoking prayer by A.W. Tozer who was a Christian pastor and author in the 1920′s – 50′s. This prayer got me to thinking about where I place God in my life. We all need to realize that the universe does not revolve around “me”. That God and others matter more than us and our creature comforts.
This prayer also got me to thinking why do some religious people cling to a now archaic manners of speech? Why don’t we pray the same way we generally talk? I must admit that I “talk” to God many times a day and I never say the words “mayest”, “thou”, or “art”. I talk to God in the language of my time not those used hundreds of years ago. The language of God is in our thoughts, not the words we speak no matter how archaic they might be.
This picture has meaning beyond its reality. I have been pondering the road ahead probably too much lately. In today’s environment that can indeed be very depressing. When I came across this picture of the beautiful sky at the end of the road it made me think of a possible silver lining in the days ahead. If all of us would just stop and think beyond ourselves to our creator maybe we could put aside some of our bitterness and political divide and come together for the common good of our nation, our world, and the human race. I can only pray that this is possible.
This is one of my favorite places to visit and it is only a four hour drive. I haven’t been there lately so I will have to visit again soon.
This picture kind of fits my mood lately. A little weary; a little aged.
None of them from any party are going to purposely ruin the country. They will all do the best they can. -July 8, 1928 Will Rogers
If I had run across this quote ten or maybe even five years ago I would have undoubtedly agreed that it applies to our times. But given what has occurred since then I am just not so sure anymore. There just seems to be so much mistrust, I might even call it hate in some circles, that I am just not sure now. It seems that one party is more willing to see the country fail rather than see their enemies in the other party be successful at anything and the other party is not that much different in their feeling towards them.
I just don’t know how we got ourselves in this situation. Where did all this recent animosity come from? Why are we now such a divided nation? I think a big part of it is the economic chaos that we find ourselves in the last decade. Everyone is fearful that they will soon join the ranks of the unemployed that bitterness has just overtaken them. They form an “us” vs. “them” mentality. No one seems to be exempt from all this layoff stuff any more and with all the middle class producing jobs leaving the country in search of almost slave labor wages who can blame them. I know that the job I retired from eleven years ago now reside in India for the most part.
Will we ever get a truly inspirational leader, with the gumption to put his words to action, to take us out of our doldrums? I was hoping that Mr. Obama was up to that task but he has proven to be short of the skills needed to accomplish that. Where are the great ones when we need them?
But what do I know…..
I need to get off this “downer” stuff for a while. It is drawing me into its clutches. On to some lighter things for the rest of the week.
I started out my adult life as a Republican who voted for Richard Nixon in 1972 but after Reagan became president in 1980 I was pushed into the Democrat party by all his radical and anti-people policies. Things like “trickle down” and “cutting taxes to increase taxes” just made no sense to me and ended up being total nonsense in its practice. He was probably the original modern day deficit king. I’m not sure who I voted for in 1988; neither candidate seemed to be really qualified. It was a boring election.
In 1992 I voted for Clinton and then for him again four years later. Those were certainly prosperous times for all of us. We seemed to be able to do no wrong as a country. Yeah there were the usual embarrassing events that we get ourselves into but at least we seemed to be able to get along together. As a result of the Clinton years I felt very comfortable in calling myself a Democrat. Then Mr. Bush (the junior version) did nothing but reinforce my Democratic leanings. In 2008 I voted for Mr. Obama but have since become leery of his continuous spending with little or no effect.
I am a fiscal conservative and a social progressive so that puts me somewhere between the two established parties. So it seems I don’t really belong to either party anymore. The Tea Party is the exact opposite of who I am so just call me one of those ornery Independents from now on. At least until someone brings some sanity back into the political processes.
I am waiting to see who comes out of this Republican presidential field but I can’t really imagine voting for any of those yahoos. Their social policies (Every person for themselves or worse!) is just way beyond where I am in that regard. And then there is the one who is calling Social Security a Ponsi scheme. I don’t want that guy anywhere near the Oval office; I depend too much on my social security check to risk that. Also after Johnson and Bush I can’t imagine I will ever vote to put another Texan in the White House.
But, I am not very enthusiastic for the current version of Mr. Obama either. Too bad the 2008 version of him can’t run against the 2011 version. Maybe it really doesn’t matter who is in the White House now as I don’t see the 24 hour bickering to ever come to an end any time soon.
But what do I know….
Let me start of by saying that I am by no means an investment professional but that doesn’t keep me from having an opinion. And I will also admit that looking backwards is a lot easier than looking forwards, especially in money matters. That being said there is something to saving for retirement the old fashioned way and that is to save the money while you are in your income earning years. Fortunately I retired just before the dot.com bubble burst. I had already moved much of my savings into more, some might say very, conservative areas that were somewhat unaffected by the coming down markets. I was more fortunate than many of my follow front-of-the-herd baby boomers in that regard.
It seems that, especially during the boom years of the Clinton administration everyone was betting their retirements savings on doubling or tripling via the stock market’s constant upswing. The feeling was “if I can just put $10,000 into the stock market it will be worth $30,000 to $40,000 in a few years. Many people were planning on retiring with the new found wealth in the their forties instead of waiting for the usual sixties.
And then came the Bush years of stagnation. When Mr. Bush came into office the stock market was right around 10,500. Now more than ten years later it is at a little over 11,000. that make for an annual percentage basis of about 0.3% annual gain. If you had bought $1,000 worth of U.S.Savings Bonds in January 2000 it would now be worth $1500 or the same amount of profit as your $10,000 would likely have gained in the stock market over the same period of time.
I know all you financial advisers out there are saying “what you say might true be but these are unusual times”. To that I say over the very long term you might be right but this has been going on for almost twelve years now. To many that is well over one-third of the earnings years and there seems to be no reason to believe that things will change any time soon. Given the vitriol atmosphere in the congress now there is little reason to believe that your government will ever be able to help bring back prosperity even if they could in the first place.
So, here we are again back to the old-fashioned way. If you want to be more assured that you will be able to live comfortably in your senior years you are going to have to give up some of the “stuff” you deem important today. This includes things like that $3 cup of coffee, the vacation home, the $300 monthly budget for new clothes, and the new car every three years. Instead put it away for retirement. It doesn’t seem to matter much where you put it; if putting it in your mattress makes you feel secure then put it there. Just put it aside where you can’t get to it too easily.
One of the things that we let our corporations get away with is shedding any responsibility for their employees future well being. The company pension plans of my generation are long gone now so the only thing you can be assured of is the social security you will receive. It will be the only thing that will provide even the most basic safety net. And, no I don’t think we U.S. voters, especially us senior citizens, will allow anyone to take that away. But then again what do I know