Sunday, October 29, 2017

Countdown to Financial Fitness: Open Enrollment

Countdown to Financial Fitness: Open Enrollment: My husband and I are fortunate enough to be covered by health insurance through his employer. Even though our premiums have increased and b...

Open Enrollment

My husband and I are fortunate enough to be covered by health insurance through his employer. Even though our premiums have increased and benefits have decreased over the years, we're still better off compared to those who have to purchase health insurance through the exchanges.

This time of year brings open enrollment for most plans, when it's a good idea to take a look at your coverage options for 2018 and make changes if necessary. Do you need to add or drop a family member? Go for a richer plan to keep or upgrade to the coverage you need, or drop down to something cheaper to save on premiums? Adjust contributions to a Health Savings or Flexible Spending Account?

Another consideration is to avoid leaving money on the table. If you have a Flexible Spending Account, you most likely must use the money for qualified medical/dental/vision expenses before the end of the year, or risk losing it. How about making an appointment with an eye doctor, getting your teeth cleaned, or having a skin cancer screening if you have not yet done so?

Health Savings Accounts (HSAs) are portable and the balance carries over from year to year, so no need to worry about spending that money now if you don't have to. But check to see if you've reached your funding limit, and back out any excess contributions.

An individual can contribute up to $3400 to an HSA for 2017; if the account covers other family members, the limit increases to $6750. If you're over 55, you can contribute an additional $1000. If the account is associated with your workplace high-deductible healthcare plan, you can probably make regular, automatic contributions on a pre-tax basis. If you transfer after-tax money from your bank account to your HSA, you may deduct those contributions on your income tax return. Fortunately, you have until April 15, 2018, to fund your 2017 HSA, so if you can't afford to make all your contributions before the holidays, you haven't lost out.

Like many companies these days, my husband's employer gives incentives for completing certain health actions (completing a survey, having an annual physical, being tobacco-free, achieving favorable biometric results, etc.) which translate into real money deposited into his HSA. Most of these health actions must be completed by the end of the year if not sooner; if you have such an opportunity, don't pass it up.

Open enrollment is the best time for an annual financial check-up to ensure you're taking advantage of all the benefits of your healthcare plan, and to make the best possible health insurance decisions for 2018 for you and your family.

What suggestions do you have for making the most of your healthcare dollars? I'd love to hear your comments.

Tuesday, October 10, 2017

Countdown to Financial Fitness: Protecting Memory-Impaired Loved Ones

Countdown to Financial Fitness: Protecting Memory-Impaired Loved Ones: I participate in the Walk to End Alzheimer's every year and find comfort connecting with others who have lost someone to Alzheimer'...

Protecting Memory-Impaired Loved Ones

I participate in the Walk to End Alzheimer's every year and find comfort connecting with others who have lost someone to Alzheimer's. Both my mother and my mother-in-law suffered from the disease.

One of the early symptoms of age-related dementia, and diseases such as Alzheimer's, is financial irresponsibility. A parent who used to meticulously record every expenditure in her checkbook one day stops. The person forgets to open the mail. Forgets to pay bills. Can't come up with the correct change for a purchase.

I once observed my mother staring at a dividend check like she didn't know what to do with it. Then she wadded it up and started to throw it away.

My mother-in-law cut the routing information off her annuity check before she deposited it. The bank bounced it. We had to call the insurance company to have the check reissued. Told them it must have been damaged in the mail. After she did it again, we set up direct deposit.

People with memory impairments--often seniors--are at risk of being scammed. Example: phone calls soliciting personal or financial information, claiming to be bill collectors or government officials. Unscrupulous contractors knocking on doors and insisting on doing work that isn't needed. Or demanding payment for work that was never done.

Fortunately, neither my mother nor my mother-in-law used email, so they never wired money to Nigerian princes or clicked on attachments that unleashed a virus. They never fell victim to the scam by the caller who claims to be from Microsoft, offering to "fix" your computer remotely.

But my mother-in-law would receive 13-15 pieces of snail mail every day, mostly solicitations from fake charities or "tax" bills that looked like they came from the government. Her favorite letters were notifications from make-believe sweepstakes and foreign lotteries she hadn't entered, stating she had won millions; she just needed to send them a check to cover the processing fee to claim her prize. She loved writing checks. And the more checks she'd write, the more mailing lists she'd inadvertently join.

Some of those crooked companies took the routing numbers off the check she'd written them and set up automatic withdrawals from her checking account, with the notation "signature on file." It took us six months to stop one of them from charging her monthly for "prize verification." Apparently there was some fine print on the form she signed to claim her supposed winnings (which she never received) giving them authorization to access her account on a regular basis to keep her "entry" in the sweepstakes active.

When we hid her checkbook, she called the credit union and ordered more checks.

Getting a parent to relinquish control of finances is a difficult transition. It's a loss of independence, like giving up driving. It takes away dignity.

And if your name is not on the account and you don't have power of attorney, the bank won't help; you're lucky if they'll even talk to you. My mother-in-law's credit union knowingly processed fraudulent debits to her checking account because the crooks could provide evidence that she had authorized them.

So how do you mitigate some of these problems?

We tried having the mail redirected, although a lot of junk mail like my mother-in-law received didn't get forwarded. And the post office hesitates to stop it, because junk mail is a source of revenue for them.

Advance planning helps. Talk to your parents and your spouse before memory problems arise. Find out how they like to spend their money, such as what charities they support, whether they always buy lottery tickets, whether they do a lot of online shopping, etc., so it will be easier to recognize irregularities. Gather important financial documents so you're aware of what the person owns and owes. I had been preparing my mother-in-law's tax returns for many years, so we had a pretty good handle on her situation.

Request auto-pay for bills and direct deposit for income. Help the person set up online access to accounts and then ask if you can have the password for emergencies. My mother-in-law consented to this, although she sometimes accused me of "spying on her."

Some insurance companies that sell life and long-term care policies suggest designating an individual to notify if a premium payment is missed. This can help keep important coverage from lapsing.

None of us knows what the future holds. Therefore, everyone should have a financial/durable power of attorney, as well as an advanced directive for healthcare, which designates someone you trust to make financial, and, respectively, healthcare decisions for you when you are unable. This will save your family members the time and expense of going to court to have you declared incapacitated so they can keep the lights on in your home and pay your medical bills.

These documents should be part of your estate planning, but you can also find simple forms online. Just print out and sign in front of two unbiased witnesses (who must also sign).

What tips do you have for protecting loved ones with memory impairments? I'd love to hear your comments.