Politicians Take Care of Themselves

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This is either sad or funny.

24/7WallStreet ranked counties in the US on a combination of three measures:

  • Education (economic status of residents)
  • Poverty rate (how the local economy is doing)
  • Life expectancy (a measure of health and medical services)

The top 5 counties in the US (and 7 of the top 10) on these measures are suburbs of Washington, DC, where Congress lives.

  1. Falls Church (Independent City), VA ————————————- (DC metro)
  2. Arlington County, VA ———————————————————– (DC metro)
  3. Fairfax County, VA ————————————————————— (DC metro)
  4. Loudoun County, VA ————————————————————- (DC metro)
  5. Howard County, MD ————————————————————- (suburb of both DC and Baltimore; location of Columbia, MD)
  6. Douglas County, CO (part of Denver metro area)
  7. Los Alamos, NM (Federal nuclear research center)
  8. Fairfax (Independent City), VA ———————————————- (DC metro)
  9. Marin County, CA
  10. Alexandria (Independent City), VA —————————————- (DC metro)

Surprised?

Conversely, the worst counties in which to live are

  1. McDowell County, WV
  2. East Carroll Parish, LA
  3. Issaquena County, MS
  4. McCreary County, KY
  5. Clay County, KY
  6. Holmes County, MS
  7. Quitman County, MS
  8. Jefferson County, MS
  9. Calhoun County, GA
  10. Stewart County, GA

Given what I’ve posted recently on education and healthcare in the South, this list shouldn’t come as a surprise either.


Sources:

  1. http://247wallst.com/special-report/2017/01/13/the-worst-counties-to-live-in/
  2. http://247wallst.com/special-report/2017/01/24/the-best-counties-to-live-in/?utm_source=AOL&utm_medium=CPC&utm_content=the-best-counties-to-live-in&utm_campaign=AOL

Just how smart are you with your money?

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The Future is coming, whether you like it or not. In fact, some parts are going to be very ben_franklinpositive, and some aren’t. You have to be prepared to deal with both. The sooner you start to prepare, the lower your costs will be!

We like to think about buying a house, buying a car, fancy weddings, babies and graduations. We don’t like to think about down payments, maternity costs or paying for college. However, as economist Milton Friedman famously wrote, “there’s no such thing as a free lunch.”

The statistics are simple.

  • The average life expectancy (LE) in the US is 78.8 years (1) — shorter for the poor and Southerners; longer for women and the affluent.
  • The healthy life expectancy (HLE) in the US is 68.1 years. By comparison, the HLE for Bosnia is 68.8 years and for Canada it’s 72.3 years. (3) HLE in the US varies by state and is shorter for Southerners. (2)
  • The difference between LE and HLE is the amount of time you can expect to have to deal with some kind of physical impairment. In the US, that amounts to a decade of trouble on average.

A new study confirms what people with elder parents already knew: older people need help with daily living. Even if they are fairly independent, both finances and medications can get out of control. They may not have or want to be dependent on family members to manage either.

Over 10 years, 10.3% of those aged 65 to 69 needed help managing medications and 23.1% needed help managing finances. These rates rose with age, to 38.2% and 69%, respectively, in those over age 85. Women had a higher risk than men, especially with advancing age. Additional factors linked with an increased risk for both outcomes included a history of stroke, low cognitive functioning, and difficulty with activities of daily living. (4/5)

There are resources, but they aren’t free.

  • The average cost of in-home healthcare in the US is $3,600 per month, as I mentioned in a prior blog. The average cost of a nursing home is $9,200 per month. Medicare can pick up the first 100 days. One of the Trump proposals for Medicaid reform involves eliminating Medicaid as a way to deal with these expenses.
  • There is a  category of professional, “daily money managers.” These aren’t financial planners, but they deal with records management, budgeting, checking the validity of expenditures, and bill payment. Costs for these services vary but can start at around $450 per month. (6) Not only do they keep things together for their clients, they are an important line of defense against scammers preying on seniors.

So, how are your parents going to deal with this? How are you going to deal with this when it’s your turn?

These problems are  best addressed when you do what most people don’t — act early on them.

  • Set aside dedicated savings for retirement.
  • Purchase permanent life insurance with a rider that allows you to take up to 50% of the face value of the policy for disability and long term care expenses. (7)

Both of these actions are best done earlier in life rather than later

  • Starting savings early allows the most time for compounding of interest.
  • Starting life insurance early minimizes cost. Insurance premiums are directly related to the length of time the carrier expects to have your money before they have to pay out. The earlier you buy, the less it will cost and the more you can afford. For example —
    • In NJ, for a woman age 24 non-smoker, a new $200,000 whole life policy might cost $113.68 per month.
    • In NJ, for a woman age 44 non-smoker, the same policy would cost $365.08 per month.
    • In NJ, for a woman age 59 non-smoker, a new $100,000 policy would cost $395.08. From the carrier used to quote these examples, a $200,000 whole life policy would not be available for someone that age.

With age, the price goes up and what you can buy goes down.

Procrastination costs you money. Don’t put this off.

If you practice a healthy life style, you can try to minimize the gap between LE and HLE, but you can’t count on eliminating it. There are just too many factors outside of your control (e.g., ice, drunk drivers, pollution, etc.).

 


Sources:

  1. Centers for Disease Control and Prevention, “FastStats,” 17 March 2017. https://www.cdc.gov/nchs/fastats/life-expectancy.htm
  2. Centers for Disease Control and Prevention, “State-Specific Healthy Life Expectancy at Age 65 Years — United States, 2007–2009,” 19 July 2013. https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6228a1.htm#fig1
  3. World Health Organization, “Healthy Life Expectancy at Birth — 2000 to 2015,” http://gamapserver.who.int/gho/interactive_charts/mbd/hale_1/atlas.html
  4. Nienke Bleijenberg, Alexander K. Smith, Sei J. Lee, Irena Stijacic Cenzer, John W. Boscardin, Kenneth E. Covinsky. Difficulty Managing Medications and Finances in Older Adults: A 10-year Cohort Study. Journal of the American Geriatrics Society, 2017; DOI: 10.1111/jgs.14819
  5. Wiley. “Many older adults will need help with managing their medicines and money.” ScienceDaily. ScienceDaily, 7 April 2017. <www.sciencedaily.com/releases/2017/04/170407113035.htm.
  6. For those in the NJ area, I have a friend, Nancy Sobin, who offers these services. Please see her at http://paperwork-services.com/. She belongs to the American Association of Daily Money Managers, http://www.aadmm.com/.
  7. There are some companies that offer these riders for term insurance, which is much less expensive than permanent. The problem is that term insurance typically terminates by age 65, and home or nursing home care expenses typically start after that age. There’s no point having a rider that’s not going to be in force when you need it.

Where are the people who want to get into the US?

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The US population grew by less than 1% last year. The Census estimate is for growth of 0.82%, with most of that increase coming from births in the US – 1.38 million births versus 1.25 million immigrants.

The Census forecast is that population growth rate will decrease, reaching a low of 0.45% in 2048.  Deaths among the Baby Boomers will offset both births and immigration.  In fact, if we had no immigration, the US population would decline.

As we have seen in both Maine and Japan, a population decline is a problem. It means slowing of economic growth and employers take jobs to other regions where labor is available.  It means there are fewer workers to pay for benefits for the elderly and disabled.

This forecast predates the last election and the entire discussion of a wall and restructuring of the H1-B visa program.

What you need to consider:

  • Know the facts before you listen to politicians and TV commentators.  Intentionally or not, a good portion of what they say is wrong.
  • Immigration restrictions won’t help people with the wrong job skills get work. Unless people recognize that old jobs are gone and they need to retool for what’s available, they’ll be stuck. There’s no future in unskilled labor.

Sources:

  1. US Census Bureau. https://www.census.gov/population/projections/data/national/2014/summarytables.html
  2. Ben Fifield, “Many Northeast, Midwest States Face Shrinking Workforce,” Pew Charitable Trust, 27 May 2016. http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2016/05/27/many-northeast-midwest-states-face-shrinking-workforce

Autism and Parenting

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OK, this finding isn’t rocket science, but it makes sense, and has all sorts of implications for the people involved and their friends and relatives. (1)

Parents of children with autism tend to be less satisfied with their marriage, have less time for each other, and are more prone to divorce. The time issue may be the key of the three items: autistic children place more demands on their parents.  Time demands add stress to what is in many cases a less than happy situation.

It’s one thing if there are others who know what’s happening and offer to help.  Still another if the healthcare system offers respite care (relief for caregivers — something common in Europe and almost nonexistent in the US).

These parents need understanding and they need help. Where they have a strong support system to help them, they’re very lucky.  Many don’t.

What you need to consider:

  • Do you know someone with an autistic child?
  • If yes, find a way to share the load. It matters.

Sources:

  1. Sigan L. Hartley, Leann Smith DaWalt, Haley M. Schultz. Daily Couple Experiences and Parent Affect in Families of Children with Versus Without Autism. Journal of Autism and Developmental Disorders, 2017; DOI: 10.1007/s10803-017-3088-2
  2. University of Wisconsin-Madison. “Insight into day-to-day lives of parents raising children with autism.” ScienceDaily. ScienceDaily, 21 March 2017. <www.sciencedaily.com/releases/2017/03/170321092728.htm>.