IRA Charitable Rollover

 

The IRA charitable rollover was created in 2006 and made permanent by Congress in 2015. This giving plan is available for IRA owners who are over age 70½. It is a direct transfer from an IRA to a public charity. Prior to the IRA charitable rollover, some individuals would take withdrawals from their IRAs, report the distribution as taxable income, make a cash gift to charity, obtain the required receipts for charitable gifts over $250 and take a deduction on their tax returns.

Not only was this process rather cumbersome, it also resulted in increased adjusted gross income. With higher income, you may pay more income tax on Social Security or pay a higher Medicare Part B premium. That's why an IRA charitable rollover may be a great option.

The IRA charitable rollover is very simple. An IRA owner who has reached the age of 70½ may transfer up to $100,000 per year. The transfer is made directly from the IRA to a qualified public charity. The IRA rollover is not taxable on your income tax return, so there is no need for a tax deduction. It is a simple and effective way to make a charitable gift.

Mary Makes a Convenient Gift


Mary Smith is a retired teacher who recently turned 72. She regularly volunteers for her favorite charity and makes a gift each year of $2,000. Last year, Mary withdrew $2,000 from her IRA, reported that amount in her taxable income and then wrote a check to charity. Because the gift was over $250, the charity sent Mary a receipt. She deducted the $2,000 charitable gift on her tax return.

Mary heard from a friend about the IRA rollover option. She called the development director at the charity and asked about using an IRA rollover to make her annual gift. Mary would simply need to contact her IRA custodian and have the IRA gift transferred to her favorite charity.

Mary contacted the large financial company that managed her IRA and filled out a distribution form. She asked that the financial company make a "qualified charitable distribution" of $2,000 to her favorite charity. The financial company then transferred the $2,000 directly to her favorite charity. The balance of her required minimum distribution for that year was distributed to Mary. She reported her IRA distribution on her tax return, but did not pay tax on the $2,000 gift to charity.

Mary loved the simplicity of the IRA charitable rollover. The $2,000 gift to charity was not taxed on her income tax return and she did not have to itemize to take the deduction. The simplicity and convenience of this gift was a wonderful benefit for Mary.

Judy Takes the Standard Deduction


Judy is a retired nurse and a volunteer for her favorite charity. During her working years, Judy had sufficient income and lived a moderate lifestyle. She saved regularly and contributed to her IRA. With good investments and tax-free growth, Judy's retirement plan has increased to over $435,000.

Judy is now age 78, owns her home and has more income than she needs. Each year she makes a gift of $1,000 to charity. Because she does not report home mortgage interest or have enough other deductions to itemize, Judy takes the standard deduction. But she has heard about the IRA charitable rollover and wonders if that will be a good option. She asked her best friend, "Do you think that I should give the $1,000 from my IRA?"

Each year Judy withdraws the $1,000 from her IRA. It increases her income by $1,000. Because she gives the $1,000 to charity and takes the standard deduction, Judy does not reduce her income taxes with her charitable gift. The $1,000 IRA withdrawal increases her income, but Judy does not benefit from a charitable deduction.

A better plan is for Judy to gift the $1,000 directly from her IRA to charity. The IRA charitable rollover reduces her income by $1,000 and saves taxes.

Judy was pleased to learn that she could roll over $1,000 from her IRA to her favorite charity. Best of all, Judy was able to make the gift and reduce her current taxes. Judy spoke with her best friend and noted, "An IRA charitable rollover is a great plan. I helped those in need through my favorite charity and also lowered my taxes!"

Bruce is a Very Generous Donor


Bruce retired several years ago, but remained active during his retirement years. Recently, Bruce started volunteering with a local charity. He devotes several hours a week to his volunteer work and receives great satisfaction through helping others.

Since Bruce lives fairly moderately and has good income from his retirement plan and investments, he is a very generous donor. In fact, Bruce donates 60% of his income each year and lives on the balance. He feels that this is an opportunity for him to "give back" to society for the good life he has been able to lead. But Bruce would like to do more. Is there a way for Bruce to help even more?

The charity has a special project underway. Bruce understands the importance of this charitable project and would like to make an additional gift of $20,000. He checked with his CPA, who explained that he qualifies for a tax-free IRA charitable rollover. As a result, Bruce was able to contact his IRA custodian and have a gift of $20,000 sent to the charity. The charity honored Bruce for his generous gift. Bruce is happy with his rollover gift. It was not included in his taxable income and he was able to deduct his regular charitable gifts.

Bruce noted, "I am very pleased with my IRA gift. Because it was not included in my income, I am able to deduct my regular gifts and still help with an added gift of $20,000!"

Claire Simplifies Her Taxes


Claire is a retired investment advisor. Over the years, she watched her IRA blossom and grow into the largest asset in her estate. When she reached age 72, she started taking her required minimum distributions. Based on her age of 78 and the increased IRA value, her required distribution this year is nearly $100,000!

Claire is a frequent volunteer for her favorite charity and wants to make a major gift to a special project. In November, she decided that she had sufficient other income and did not actually need the IRA distribution for this year. With the growth of her IRA, it was logical to make the charitable gift from her IRA. But how can this work? Is this a good tax planning strategy?

Claire contacted her CPA Susan to discuss the best way to make her major gift. Susan explained to Claire the benefits of making a tax-free IRA charitable rollover. By not taking the $100,000 into her income, Claire will benefit in several ways. Her income will be lower and she will not have other tax benefits phased out. She will have a reduced income level and pay a lower Medicare Part B premium.

Claire responded, "I don't understand all of that tax talk, but it does make sense that with $100,000 less in taxable income, my return will be easier to complete. Plus, there are those other savings that you mentioned. This sounds like a great idea!'

The next day, Claire contacted her IRA custodian and had the full $100,000 IRA distribution sent to her favorite charity. She and her CPA Susan were both delighted. Claire made a wonderful gift and her tax situation was simplified.

How to Give From an IRA


The IRA rollover will require a payment by your IRA custodian to a qualified public charity. IRA custodians are generally familiar with the IRA charitable rollover.

Your first step is to contact the IRA custodian. Most IRA custodians have a standard IRA distribution form. Some IRA custodians have added the IRA charitable rollover as an option to this form. As the IRA owner, you will need to sign the application and indicate the amount of the gift and the correct legal name, city and state of the public charity.

After your IRA custodian has received the form and processed the transfer, it will pay the specified amount to the public charity. This gift can be made for a specific purpose. For example, the gift could be to a specific relief fund, to a scholarship fund or to another "field of interest fund" with a charity. If you have a specific goal for your IRA charitable gift, you will want to contact the charity to confirm the gift will be used for that purpose.

How to Find a Better Medicare Prescription Drug Plan

My pharmacist highly recommends that I compare Medicare Part D prescription drug plans each year, but it is such a hassle sorting through all those different plans. Is there an easier way to shop and compare Medicare drug plans?

Because Medicare's prescription drug plans can change their costs and benefits from year-to-year, comparing Part D plans every year during the open enrollment season from October 15 - December 7 is always a smart idea.

Even if you are happy with your current coverage, there may be other plans out there that offer better coverage at a lower cost. You never know until you look. Here are some tips to help you shop and compare Medicare drug plans.

Medicare Online


If you have internet access and are comfortable using a computer, you can easily shop for and compare all Medicare drug plans in your area and enroll in a new plan online if you choose. It only takes a few minutes.

Use Medicare's Plan Finder Tool at Medicare.gov/find-a-plan and choose your preferred type of coverage. Enter your ZIP code and financial assistance (if you receive any), select the drugs you take and their dosages, and choose the pharmacies you use. The plan finder does the math to identify the plans in your area that cover your drugs at the lowest cost.

This tool also provides a five-star rating system that evaluates each plan based on past customer service records and suggests generic or older brand name drugs that can reduce your costs.

When you are comparing drug plans, look at the estimated drug costs plus the premium costs. This shows how much you can expect to pay over a year in total out-of-pocket costs.

Be sure the plan you are considering covers all the drugs you take with no restrictions. Most drug plans today place the drugs they cover into price tiers. A drug placed in a higher tier may require you to get prior authorization or try another medication first before you can use it.

Any changes to coverage you make will take effect Jan. 1, 2022. If you take no action during open enrollment, your current coverage will continue next year.

Need Some Help?


If you need some help choosing a new plan, you can call Medicare at 800-633-4227 and they can help you out over the phone. You can also contact your State Health Insurance Assistance Program (SHIP) for free Medicare counseling. Typically, each SHIP conducts seminars during the open enrollment period at various locations throughout each state. To find a local SHIP counselor see ShiptaCenter.org or call 877-839-2675.

Financial Assistance


Individuals who are having a hard time paying medication costs may be eligible for Medicare's "Extra Help" program. This is a federal low-income subsidy that helps pay Part D premiums, deductibles and copayments.

To be eligible, your income must be under $19,320 for individuals or $26,130 for married couples living together, and your assets (not counting your home, personal possessions, vehicles, life insurance policies or burial fund) must be below $14,790 for individuals or $29,520 for married couples. For more information or to apply, call Social Security at 800-772-1213 or visit SSA.gov/extrahelp.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published October 8, 2021

IRAs - Regular and Roth

 

While Social Security will provide approximately 40% of the average person's retirement income, an Individual Retirement Account (IRA) is an essential addition for a successful retirement. Your IRA has two main benefits—contributions to a regular IRA are from pre-tax income and there is tax-free growth. There is another version of an IRA called a Roth IRA, which is funded with after-tax income.

Linda is in her middle working years and anticipates receiving Social Security when she retires. But she has several questions about whether she should also start funding an IRA.
  • How should I fund my IRA?
  • Is it a good idea to do an IRA rollover?
  • At what age should I start taking IRA distributions?
  • Should I take the minimum required distribution or a larger amount?

Funding the IRA


If you are not actively participating in another type of qualified retirement plan and are within an adjusted gross income limit, you may qualify to transfer a substantial sum each year into an IRA. The IRA contribution amount is $6,000 this year. If you are over age 50, you may also make an additional $1,000 "catch-up" contribution. The maximum IRA contribution amounts are indexed for inflation in increments of $500. In future years, the contribution amount will increase.

Because Linda is over age 50, she is able to contribute $6,000 and her catch-up amount of $1,000, for a total of $7,000 to her IRA this year.

Linda considers the options to create a regular IRA or a Roth IRA. Because she wants to receive the income tax deduction, she transfers the funds into a regular IRA and deducts the $7,000 on her federal tax returns.

IRA Rollovers


The majority of larger IRAs are funded through rollovers from retirement plans through your employer. If you have a qualified plan through your employment, upon separation from service or reaching a specific age, such as 70, you will usually have an option to rollover to a self-directed IRA.

Normally, your qualified plan through a business has been funded with pretax income. The IRA account also benefits from tax free growth. Therefore, the rollover will be from the other qualified plan into a regular IRA. Your IRA will continue to grow tax free, but future distributions to you will be taxable.

IRAs may be rolled over to a new custodian. The preferred method is to have a custodian-to-custodian transfer. If the funds are transferred directly from one IRA custodian to the new custodian, there is no tax.

While it is permissible for your custodian to transfer funds to you and then for you to make the rollover, your IRA custodian will withhold 20%. Because of the 20% withholding requirement, virtually all IRA rollovers are completed with the custodian-to-custodian method.

An IRA to Roth IRA rollover may also be permissible for you. Generally speaking, people with any adjusted gross income are permitted to transfer a regular IRA to a Roth IRA. The value of the IRA will be included in your taxable income, so you may owe a substantial income tax for the conversion.

The primary benefit of the conversion to the Roth is that a Roth IRA does not have a mandatory distribution requirement at age 72. The funds may be permitted to grow tax free and, at the discretion of the owner, may be withdrawn tax free during retirement years. If the owner of a Roth IRA does not make withdrawals, then the Roth may be transferred to children, who may make tax-free withdrawals over their life expectancy.

IRA Distributions


For a regular IRA, there are specific rules on both contributions and withdrawals. Withdrawals for distributions are generally not taken before age 59½. With limited exceptions, such as uniform distributions over a lifetime, disability, separation from employment after age 55, or other exceptions there is a 10% excise tax in addition to the regular ordinary income tax on withdrawals before age 59½. Therefore, very few individuals take early withdrawals before age 59½.

Between ages 59½ and 72, there is an optional period for withdrawals. The withdrawals are not required, but you may take withdrawal of any amount. Of course, for a regular IRA the amount withdrawn is taxable to you and no longer grows tax free in the fund. Therefore, you may not want to take withdrawals unless you actually need the funds for living expenses.

After you reach age 72, there are required minimum distributions (RMDs). The distributions start at approximately 3.9% at age 72 but increase with age each year. The distribution is calculated using your balance on December 31 multiplied by the appropriate percentage, and must be taken by the end of the next year. If you fail to take your distribution, there is a 50% penalty, so an error or an intentional disregard of the RMD rules is quite rare.

How Do Social Security Survivor Benefits Work?

Who qualifies for Social Security survivor benefits? My ex-husband died last year and I would like to find out if my 17-year-old daughter and I are eligible for anything?

If your ex-husband worked and paid Social Security taxes and you and your daughter meet the eligibility requirements, you may be eligible for survivor benefits, but you may need to act quickly because benefits are generally retroactive only up to six months. Here is what you should know.

Under Social Security law, when a person who has worked and paid Social Security taxes dies, certain members of that person's family may be eligible for survivor benefits including spouses, former spouses and dependents. Here is a breakdown of who qualifies.

Widow(er)s and divorced widow(er)s: Surviving spouses who were married at least nine months are eligible to collect a monthly survivor benefit as early as age 60 (50 if disabled). Divorced surviving spouses are also eligible at this same age, if you were married at least 10 years and did not remarry before age 60 (50 if disabled), unless the new marriage ends.

How much you will receive will depend on the amount of your spouse's earnings that were subject to Social Security taxes over his lifetime. It will also depend on the age at which you apply for survivor benefits.

If you wait until your full retirement age you will receive 100% of your deceased spouse's or ex-spouse's benefit amount. Full retirement age is 66 for people born from 1945 to 1954 and will gradually increase to age 67 for people born in 1960 or later. If you apply between age 60 and your full retirement age, your benefit will be somewhere between 71.5% and 99% of his benefit.

However, surviving spouses and ex-spouses who are caring for any children of the decedent under the age of 16 are eligible to receive 75% of the worker's benefit amount at any age.

Unmarried children: Surviving unmarried children under age 18, or up to age 19 if they are still attending high school, are eligible for survivor benefits too. Both biological and adoptive children are eligible, as well as children born out of wedlock. Dependent stepchildren and grandchildren may also qualify. Children's benefits are 75% of the worker's benefit. Benefits can also be paid to children at any age if they were disabled before age 22 and remain disabled.

You should know that in addition to survivor benefits, a surviving spouse or child may also be eligible to receive a special lump-sum death payment of $255.

Dependent parents: Benefits can also be paid to dependent parents who are age 62 and older. For parents to qualify as dependents, the deceased worker would have had to provide at least one-half of the parent's financial support.

Be aware that Social Security has limits on how much a family can receive in monthly survivors' benefits. This is usually 150% to 180% of the worker's benefit.

Switching Strategies


Social Security also provides surviving spouses and ex-spouses some nice strategies that can help boost their benefits. For example, if you have worked you could take a reduced survivor benefit at age 60 and later switch to your own retirement benefit based on your earnings history – between ages 62 and 70 – if it offers a higher payment.

If you are already receiving retirement benefits on your work record, you could switch to taking survivors' benefits if the payout is higher. You cannot, however, receive both benefits.

If you collect a survivor benefit while working, and are under full retirement age, your benefits may be reduced depending on your earnings. See SSA.gov/pubs/EN-05-10069.pdf.

For more information on survivor benefits, visit SSA.gov/benefits/survivors.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published October 1, 2021

How to Manage an Inherited IRA from a Parent

What are the rules regarding inherited IRAs? When my mom died this year, I inherited her traditional IRA and would like to know what I need to do to execute it properly.

I am very sorry about the loss of your mother. Inheriting a traditional IRA from a parent has a unique set of rules you need to know which will help you make the most of the money you inherit and avoid a tax-time surprise. Here are some basics.

Set Up an Inherited Account


Many people think they can roll an inherited IRA into their own IRA. But if you inherit an IRA from a parent, aunt, uncle, sibling or friend you cannot roll the account into your own IRA or treat the IRA as your own. Instead, you will have to transfer your portion of the assets into a new IRA set up, formally named as an inherited IRA. For example, it could be titled [name of deceased owner] for the benefit of [your name].

If your mom's IRA has multiple beneficiaries, it can be split into separate accounts for each beneficiary. Splitting an account allows each beneficiary to treat their own inherited portion as if they were the sole beneficiary.

You can set up an inherited IRA with many bank and brokerage firms. However, the easiest option may be to open your inherited IRA with the firm that held your mom's account.

10-Year Withdrawal Rule


Due to the SECURE Act, which was signed into law in December 2019, many non-spouse (but not all) IRA beneficiaries must deplete an inherited IRA within 10 years of the account owner's death. This applies to inherited IRAs if the owner passed away after Dec. 31, 2019.

There is no limit on when or how often you withdraw money from the account, as long as the account is empty by the end of the 10 years. This means you can choose to withdraw all of the money at once, you can leave it sitting there for a decade and then take it all out, or you can take distributions over time. Be aware that just as with a non-inherited traditional IRA, each withdrawal will be counted as income and subject to taxes in the year you make the withdrawal.

Exceptions to the Rule


There are several exceptions to the IRA 10-year rule, including for a surviving spouse, minor child, disabled or chronically ill beneficiary or a beneficiary who is no more than 10 years younger than the original IRA owner. These beneficiaries may have more time to draw down the account and pay the resulting tax bill.

For example, when you inherit an IRA from a spouse, you can rollover the IRA balance into your own account and delay distributions until after you turn age 72.

Minor children do not become subject to the 10-year rule until they reach the "age of majority," which is age 18 in most states. Disabled and chronically ill beneficiaries, and individuals no more than 10 years younger than the original account owner have the option to stretch required withdrawals over their lifetime.

Minimize Your Taxes


As tempting as it might be to cash out an inherited IRA in a lump-sum withdrawal, tread carefully. This option could leave you owing a hefty sum when it is time to file your taxes. Withdrawals from a traditional IRA are generally taxable as income, at your income tax rate.

For some people, it can be a smart tax move to gradually draw down the account over the 10-year period to avoid a large tax bill in a single year and potentially being bumped into a high tax bracket. If you are approaching retirement, you may want to wait to start withdrawing from the account until you are retired and your income drops, potentially putting you into a lower tax bracket.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published September 24, 2021

Social Security

 

Linda asked, "When should I take my Social Security? I will turn 57 this year and have a strong earnings history, having paid into Social Security for nearly 35 years. Given the year I was born, my 'regular' retirement age for purposes of Social Security will be age 67 but I can take 'early' benefits starting at age 62 or even wait until age 70. Which is better for me?"

Social Security Benefits


The average American retires and receives Social Security to cover part of his or her retirement expenses. A typical Social Security payment replaces approximately 40% of your pre-retirement income. To qualify for Social Security, you need to have contributed to the fund for 40 quarters or 10 years. Your Social Security payout will be dependent on your highest earning years.

Full Payments at Age 67


In the 1980s, Congress decided to slowly increase the age for full Social Security benefits from 65 to 67. For anyone born after 1960, the full Social Security retirement benefit is available at age 67.

Based on the tables, at age 67 Linda would qualify for $3,075 per month (in current dollars). If she waits until that age to start payouts, she receives a larger amount than if she selects an early payout at age 62 and it will be adjusted for inflation.

The favorable news for Linda is that she would receive this larger amount plus cost-of-living increases for her lifetime. In addition, if she works after age 67, there's no reduction in her Social Security payment. She can continue to receive the full income of her work and the Social Security benefit. Of course, because both she and her employer are contributing to the Social Security system while she is working, her actual Social Security benefit is significantly reduced. Her Social Security payout will be taxed and her net after-tax benefit will be reduced.

Because Linda is still working, she is contributing about $600 per month of after-tax income to Social Security. Her employer is also contributing a similar sum. The net Social Security benefit to her, after payment of income taxes on her contribution and the contribution by her employer from her salary, is now approximately $300 to $600 of added after-tax monthly income.

Early Payout at Age 62


Linda could join many Americans and start taking payments when she is age 62. In the case of early retirement, a benefit is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month. If the number of reduction months is 60 due to retirement at age 62 when normal retirement age is 67, then the benefit is reduced by 30 percent.

This amount will be adjusted every year based on the Social Security cost-of-living increase. While her benefit is adjusted for inflation, the actual value or purchasing power of this amount will not change. Linda's mother is still living and her grandmother lived to be 96, so she may be wise to plan for a fairly long retirement.

There is one other challenge for Linda. If she continues to work, and many individuals do work until their late 60s, she will lose part of her Social Security payment. For every $3 in income (over an indexed limit) she earns between age 62 and her full retirement age, she loses $1 in Social Security benefits. By taking her payment at age 62, she receives both a lower payout for her lifetime and reduced payments for the years until her full retirement age.

Delaying Payments to Age 70


If Linda continues with her present employment and does not need her Social Security income, she can receive an increased benefit by delaying the start of payments to age 70. The benefit starting at age 70 for Linda is currently 21% higher than what she would receive at age 67. With inflation adjustments, Linda's benefit could be even higher by the time she reaches age 70.

This represents a significant increase over her normal retirement amount. The amount increases by about 8% per year because the government has held her funds longer and she has a shorter period of time before beginning to receive her payments.

If Linda lives to her mid-80s, then she will have received a greater total Social Security benefit. If she joins her long-lived relatives who have survived to their mid-90s, her net economic benefit from Social Security by delaying the first payouts to age 70 is dramatically greater than her total payouts starting at age 62 or 67.

Tax-free Social Security Payouts


Individuals with lower incomes do not pay any federal tax on Social Security. Generally, single people with incomes under $25,000 per year do not pay tax.

50% of Social Security Taxable


For many Social Security recipients, their income is in the middle range and 50% is taxable. For example, a single person with taxable income of approximately $25,000 to $34,000 would pay tax on half of his or her Social Security. The taxable income is called the modified adjusted gross income and includes adjustments for some types of tax-free income.

Because Linda has a substantial IRA, she expects to have a higher level of income.

85% of Social Security Taxable


With other pension income and IRA income, Linda anticipates a modified adjusted gross income of over $36,000 per year. As a result, 85% of her Social Security is taxable.

Linda is not very pleased with this plan. Because she already paid tax on her half of the Social Security, she feels that this is a very substantial tax. However, with the increasing need to fund Social Security in the future, the high probability is that Linda will pay tax on 85% of her Social Security during her lifetime.

Social Security for Spouses


A spouse may have different options for receiving Social Security. First, if he or she qualifies based on employment, then the best choice may be to take his or her normal benefit at the selected retirement age.

However, a surviving spouse can receive a reduced spousal benefit starting at age 60. At a later date they may transition to a full benefit under their own qualification.

Symptoms of COPD

I have struggled with shortness of breath for several years now. I just thought I was experiencing normal aging and had put on a bit of weight, but a friend recently told me about COPD. Could I have COPD and not know it?

Chronic obstructive pulmonary disease (COPD) is a progressive lung disease that affects an estimated 30 million Americans, but about half of them may not know they have it.

Many people mistake shortness of breath as a normal part of aging or a result of being out of shape, but that is not necessarily the case. COPD, a term used to describe a variety of lung diseases including emphysema and chronic bronchitis, develops slowly so symptoms may not be obvious until damage has occurred.

Symptoms can include an ongoing cough, a cough that produces a lot of mucus, lack of energy, shortness of breath, blue lips or fingernails, swelling in your feet, ankles or legs, wheezing or chest tightness.

Those most at risk are smokers, former smokers over age 40 and people who have had long-term exposure to other lung irritants such as secondhand smoke, air pollution, chemical fumes or dust. There is also a rare genetic condition known as alpha-1-antitrypsin (AAT) deficiency that can increase the risks.

If you are experiencing any symptoms, you should consult with your doctor about getting tested. A simple breathing test called spirometry can tell if you have COPD, and if so, how severe it is. Early screening can also identify COPD before major loss of lung function occurs. If you do have COPD, there are things you can do to help manage symptoms and protect your lungs from further damage.

Quit smoking: If you smoke, the best thing you can do to prevent more damage to your lungs is to quit. Ask your doctor about prescription anti-smoking drugs that can help reduce your nicotine craving. You can also find free resources from the National Cancer Institute offers a number of smoking cessation resources at SmokeFree.gov or call 1-800-QUIT-NOW.

Avoid air pollutants: Stay away from things that could irritate your lungs like dust, allergens and strong fumes. To help improve the air quality at your home, remove dust-collecting clutter and keep carpets clean; run the exhaust fan when using cleaning products, bug sprays or paint; ban smoking indoors; and keep windows closed when outdoor air pollution is high (see AirNow.gov for daily air-quality reports).

Get vaccinated: Respiratory illness such as, the flu, pneumonia and the coronavirus can cause serious problems for people who have COPD. You may want to talk with your physician about the recommended vaccinations for your medical circumstances.

Take prescribed medications: Bronchodilators (taken with an inhaler) are commonly used for COPD. They help relax the airway muscles to make breathing easier. Depending on the severity of your condition is, you may need a short-acting version only for when symptoms occur, or a long-acting prescription for daily use. Inhaled steroids may also help reduce inflammation and mucus and prevent flare-ups.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published September 17, 2021

Social Security Program to Help Manage Payments

Does Social Security offer any special help to beneficiaries who struggle managing their benefits? My aunt, who has no children, has dementia and struggles keeping up with her bills and other financial duties.

Social Security has a little-known program, known as the Representative Payee Program, that helps beneficiaries manage their Social Security benefit payments. Here is what you should know.

Representative Payee Program


Authorized by Congress in 1939, the Social Security Representative Payee Program provides money management assistance to beneficiaries who are in need of help managing their Social Security income. Beneficiaries in need of this help are often seniors suffering from dementia or minor children who are collecting Social Security survivors' benefits.

Currently more than 5 million Social Security beneficiaries have representative payees.

Representative payees also handle benefits for nearly 3 million recipients of Supplemental Security Income (SSI), a Social Security administered benefit program for low-income people who are over age 65, blind or disabled.

Who Are Payees?


A representative payee is typically a relative or close friend of the beneficiary needing assistance, but Social Security can also name an organization or institution for the role, such as a nursing home or social-service agency.

Some of the duties of a representative payee include:
  • Using the beneficiary's Social Security or SSI payments to meet their essential needs, such as food, shelter, household bills and medical care. The money can also be used for personal needs like clothing and recreation.
  • Keeping any remaining money from benefit payments in an interest-bearing bank account or savings bonds for the beneficiary's future needs.
  • Keeping records of benefit payments received and how the money was spent or saved.
  • Reporting to Social Security any changes or events that could affect the beneficiary's payments (for example, a move, marriage, divorce or death).
  • Reporting any circumstances that affect the payee's ability to serve in the role.
As a representative payee, you cannot combine the beneficiary's Social Security payments with your own money or use the payments for your own needs. The bank account into which benefits are deposited should be fully owned by the beneficiary, with the payee listed as the financial agent.

Some payees, generally those who do not live with the beneficiary, are required to submit annual reports to Social Security accounting for how benefits are used. For more information on the responsibilities and restrictions that come with the role, see the Social Security publication "A Guide for Representative Payees" at SSA.gov/pubs/EN-05-10076.pdf.

How to Get Help


If you believe a beneficiary may need a representative payee, call Social Security at 800-772-1213 and make an appointment to discuss the matter at a local office. Applying to serve as a payee usually requires a face-to-face interview.

Social Security may consider other evidence in deciding if a beneficiary needs a payee and selecting the person to fill the role, including doctors' assessments and statements from relatives, friends and others in a position to give an informed opinion about the beneficiary's situation.

You should also know that if you become a representative payee you cannot collect a fee for doing it. However, some organizations that serve in the role do receive fees, paid out of the beneficiary's Social Security or SSI payments.

For more information on the program visit SSA.gov/payee.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published September 10, 2021

How a Move May Affect Medicare Coverage

My husband and I are moving to a different area of the country to be near our daughter. Will this affect our Medicare benefits? Will we need to adjust our coverage or re-enroll in a new plan?

Moving can affect your Medicare benefits. It will depend on the type of coverage you have and where you move.

If you and your husband are enrolled in "original Medicare" Part A and Part B, you will be happy to know that you will not need to change your plans when you move because they are the same throughout the United States. However, you will need to notify the Social Security Administration of your change of address. You can do this at SSA.gov/myaccount/ or by calling 800-772-1213.

If you are enrolled in a Medicare Part D prescription drug plan or a Medicare Part C Advantage plan and you move out of your plan's service area, you will need to choose a plan that serves your new area. Depending on the type of coverage you have, you may need to take additional steps when you move.

Medicare Part D Plan: If you are enrolled in original Medicare and have a stand-alone Medicare Part D prescription drug plan, you will need to contact your plan administrator to find out if you have coverage in the area where you are moving. If you do not, you will need to enroll in a new plan that provides coverage in your new location.

Typically, you can make this switch the month before you move and up to two months after the move. Otherwise, you will need to wait until the next open enrollment held during the fall. You could be penalized for not having acceptable prescription drug coverage. To shop for new Part D prescription drug plans in your new location, see Medicare.gov/plan-compare.

Medicare Advantage Plan: If you are enrolled in a Medicare Advantage plan, contact your plan to find out if it will serve your new area. If it does not, you will need to enroll in a new plan that does.

You can switch Advantage plans the month before you move and up to two months after you move. Be aware that if you relocate out of your Medicare Advantage plan's service area and fail to enroll in a new plan in your new area, you will automatically be switched to original Medicare. This will happen when your old Medicare Advantage plan is forced to disenroll you because you do not live within its service area anymore. To shop for new Advantage plans in your new location, see Medicare.gov/plan-compare.

Medigap Policy: If you are enrolled in original Medicare and have a supplemental Medigap policy, you will need to notify your provider that you are moving, but you should not need to change insurance companies or plans. There also are Medicare Select plans, which are Medigap plans that are network-based and are available in a few states. These plans may require you to change.

Medigap plans are standardized across the country. For example, Medigap Plan F offers the same coverage in one state as it does in another state. Take note that Massachusetts, Minnesota and Wisconsin have waivers from the federal government allowing them to standardize Medigap plans differently, so plan designs are different in those three states.

You should be aware that Medigap costs vary by location, so your monthly Medigap policy premium may be higher or lower depending on the cost of medical care in your new area. Call your plan provider and tell them your new ZIP code and they will let you know the new cost.

Sometimes you will be pleasantly surprised that the cost is lower. If it is not, you could look for a cheaper policy. However, you may have to undergo medical underwriting. Medigap policies come with their own rules for enrolling, and some states have different enrollment standards than others.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published September 3, 2021

How to Choose an Adult Day Care Services Provider

Can you offer any tips on choosing a good adult day care provider for an elderly parent? My 81-year-old father, who just moved in with me, has dementia and needs attention during the day while I am at work.

Adult day care services can be a great option for caregivers who work, or for those who just need a break during the day. Here is what you should know, along with some tips to help you find and choose one.

Adult Day Care


The business of adult day care services has grown rapidly in recent years. According to the National Adult Day Services Association, there are upwards of 4,600 adult day centers across the United States. This is a 35% increase since 2002. The centers provide services to more than 260,000 participants and family caregivers, which is a whopping 63% increase over the last two decades.

As the name implies, adult day care provides care for elderly seniors who cannot care for themselves at home. While services will vary from center to center, they typically provide personal care, meals and snacks, various activities and social interaction in a safe and supportive environment. Additionally, many centers provide health services such as medication management, therapies, exercise and transportation to and from the facility.

Adult day care centers generally operate programs during normal business hours five days a week. However, some centers may offer services in the evenings and on weekends.

Costs for care will vary, usually from $25 to more than $100 per day depending on where you live. The national average is $75 per day.

Unfortunately, in most cases, original Medicare does not pay for adult day care, but some Medicare Advantage plans and many long-term care insurance policies do. Many seniors or their families pay for care out-of-pocket.

If your dad is lower income and cannot afford this, state Medicaid programs provide financial assistance if he meets eligibility requirements. Some states have PACE programs that provide financial aid. Contact your state Medicaid office (see Medicaid.gov) for more information. The VA even provides adult day care to eligible veterans enrolled in their Medical Benefits Package. See VA.gov/geriatrics to learn more.

How to Choose


Your first step in shopping for an adult day center is to determine the kinds of services you and your dad need. After you do that, here are some tips to help you locate and choose a good provider.

Start by contacting your Area Agency on Aging (call 800-677-1116 to get your local number) to get referrals to adult day service programs in your area. You can also search on your favorite online search engine for accredited services and centers.

Once you have a list of a few centers, call them to find out their eligibility criteria, if they offer the types of services your dad needs, if they are accepting new clients, their hours of operation, if they are licensed and/or registered with a state agency (this is not required in all states) and what they charge.

After you identify a few good centers, go in for a visit. Find out about the staffing ratio (at least one staff member for every six participants is recommended) and what kind of training they have. While you are there, take note of the cleanliness of the facility. Is it homey and inviting? Does the staff seem friendly and knowledgeable? Be sure to taste the food and also consider making an unannounced visit. You may want to search online for a helpful checklist of questions to ask during your visit.

After your visit, be sure to check the center's references. Get names and phone numbers of at least two or three families who have used the center you are considering and call them.

 

Published August 27, 2021

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