HealthView Retirement Planning

Enrolling in the Right Prescription Drug Plan for You

The cost of prescription drugs has become a major source of concern for many Americans, especially for those on Medicare. The Medicare open enrollment period lasts from November 15 to December 31 and is the only time when you may change your prescription plan, opt to stay with your current coverage or drop your plan altogether. It therefore is imperative to carefully consider the available options, as the plan you choose will determine the cost and availability of your medication for the remainder of the year. During this years’ enrollment period, it is especially important to practice due diligence as there have been several changes that will affect costs and coverage.

Currently, 27 million people are registered for Medicare Part D, two thirds of which are enrolled in a private standalone plan (PDP). According to a report released by the Henry J. Kaiser Family Foundation, the average monthly premium for PDP’s will most likely increase by 11% or $38.94 a month in 2010. Furthermore, 60% of PDP’s will require an annual deductible that may be as much as $310. Premiums and deductibles vary considerably by the type of plan and region and you should therefore check to see if your PDP options are subject to these changes.

The Medicare Part D “doughnut hole”, which is the gap between two set amounts that Medicare will cover, has been widened. In 2010, coverage stops at $2,830 and resumes at $6,440, which means your personal expenses could reach $3,610. If there is a likelihood that you may need a medical procedure or service in the coming year that falls within this range, you should take this potential cost into account.

Those who are enrolled in the Medicare Advantage plan should also expect to pay additional fees. The Henry J. Kaiser Foundation found that the Medicare advantage plan monthly premium is expected to rise by 32%. Advantage plan users can expect to pay a premium of $48 a month for their current plan. Furthermore, the healthcare bill, which has already been passed by the House of Representatives and awaits the decision of the Senate, would reduce the Medicare Advantage budget by 4.5%, which will affect beneficiaries. 

Regardless of what your plan is, if you take prescription drugs, you need to factor the rising cost medication into your decision. In the past year wholesale prices of brand name drugs rose by 9% for a total increase of $10 billion. For the three quarters of adults aged 45 and older who currently use prescription drugs, this means their annual drug expenditures will be around $2,810. These prices are likely increase even more during the coming year, which may have a significant impact on your costs. 

During this open enrollment period, you should be on the look out for additional or increasing costs and how this may affect your coverage. As you will be unable to leave you plan for a year, erring on the side of caution is a safe bet and you should take this time to fully explore your options.

A more in depth version of this article can be found in the current edition of Retirement Weekly, a MarketWatch publication.

Investing in Today’s Market

In his recent book, Getting Back to Even, financial expert Jim Cramer shares tips on investing in the current economy.  Understandably frustrated after losing retirement funds and life savings, people are afraid of investing in the stock market. However, investors have to get over their fear if they want to make back the money they lost.

Cramer establishes his credibility in investing in past bear markets and recessions. In 2000, while NASDAQ was down 39.29 percent, and the S&P fell by 9.1 percent, Cramer’s hedge fund, Cramer Berkowitz & Company, was up 36 percent. He also admits to past mistakes that left him in the same position many of us are in right now. Unlike being the manager of a hedge fund, where clients are trying to pull out their money, individual investors can afford to be patient when rebuilding their capital. Unless retirement is right around the corner, time constraints shouldn’t be a big issue.

Investors must fight the urge to give up and put their money in a savings account. You will simply never get back to even this way. Cramer explains the difference between owning stocks and trying to make money in stocks. The “buy-and-hold strategy” is what financial advisors will tell you to do.  Even in the recent recession, people were advised to keep their money in the stock market and not convert to cash, and their money repeatedly took hit after hit. Buying a stock simply to own it does not work.  Cramer discusses his philosophy, “buy and homework”, which we all should be doing. He says, “For every stock you own, you must spend at least an hour a week checking up on the underlying company, and that's in addition to the research you ought to do before buying a new stock.” Cramer relates this to a mechanical inspection for your car. Just as you wouldn’t let your car go without a check-up, investors should be reassessing their stocks to see if it is time to sell or trade. Knowing the difference between simply owning stocks and owning stocks to make money is necessary to getting back to even. You can’t afford sit back and accept whatever the market hands you, you need to be a proactive and knowledgeable investor in today’s market.

The stock market is not just for financial experts, anyone can be very successful in the stock market by making the right decisions.

Retirement Strategies for all Ages

It is important to save for retirement at every stage of your life. As lifestyle and financial commitments change, saving for retirement should too. On NBC’s Today Show, correspondents Ramit Sethi and Victoria Woods broke down retirement planning into three stages: your 20s and 30s, 30s and 40s, and finally, 50s and 60s.

To younger people, 65 seems a lifetime away. Regardless, you need to start planning and saving for retirement now. People in their 20s and 30s have the power of compounding on their side and need to take advantage of it! Pay off your car and start saving the payments you would have made. For example, the average monthly car payment is $378. If 25 year-old took that money every month and invested it, by the age of 65 they would have $1,500,000. You do not have to be rich to start saving. Even putting aside as little as $200 a month through an automated retirement account is a great way to start. Writing a monthly check can seem daunting but automating the process ensures that the money is taken from your paycheck and put into your savings.  At this stage in life, people have the freedom to be more aggressive with their investment strategy; they have many years ahead of them before they have to retire and relatively few financial obligations.  This makes it an ideal time to start lifecycle funds.

People in their 30s and 40s should shift their saving practices slightly as their financial responsibilities have changed.  Having a family and kids who are about to go off to college is a big expense and priorities need to be set. People in their 30s and 40s should be saving 15% of their income. This money should go to a 401(k) up until the employer matches it. Another great place to save is a Roth IRA, which allow for more flexibility than a 401(k).

The best thing you can do for yourself headed into your retirement is to be debt free.  You simply cannot afford to be trying to pay off debt in retirement. People in their 50s and 60s should also have an emergency fund set aside which should be the approximate cash amount of 2 years of fixed expenses. This seems like a lot but imagine the peace of mind this provides. While a working individual should have about 7 months of expenses put aside, it is a smart idea for people about to enter retirement to give themselves more of a cushion.

Saving for retirement can seem like an insurmountable task, but it doesn’t have to be. By being proactive and staying well informed of your options, you can make your life a lot easier.

The Psychological Benefits of Low-Fat versus Low-Carb Diets

It is a well-known fact that maintaining a healthy weight and diet is beneficial for people’s physical health. Now, a recent Australian study shows that the type of diet you choose can affect your mental health. According to their findings, people who are on low-fat diets experience more long-term mental health benefits than those who opt for low-carb diets.

The study assigned 106 obese and overweight people to either a low-fat or low-carbohydrate diet and tracked their weight loss and mood over the course of a year. After eight weeks, both groups indicated they were happier and losing weight. However, by the end of the year, among the 65 participants who had stuck to their diets, the low-fat group had experienced continued mood elevation whereas the low-carb dieters had diminished. Both groups had lost an average of 30 pounds.

These findings can be attributed to the restrictive nature of the low-carb diets the patients engaged in. Both diet types were similar in that they restricted the number of calories consumed during the course of a day to approximately 1,433 to 1,672. Where they differed was in the food sources from which they got their calories. The low fat dieters got approximately 46% of their calories from carbohydrates and 30% from fat versus low-carb dieters who got 4% of their calories from carbohydrates and 61% from fat. The remaining difference in calorie intake was from proteins. As a result, the low-carb dieters were much more limited in the types and amount of food they could eat which may have effected their outlook.

Though this report merits attention, it is in no way conclusive. The sample group is not large enough to derive any definitive results and furthermore the mental health of those involved was not uniform. Among the low-carb dieters, 24% were on anti-depressants going into the study whereas only 12% of the low-fat dieter were on medication. Therefore, the low-carb dieters may have been more prone to mood changes and negativity. Furthermore, a study done in 2007 indicates people on low-carb diets experienced better mental health after 24 weeks than those on low-fat diets. In this study, the low-carb dieters were on a more moderate diet in which 30% of their calories were from carbohydrates. “The main difference between their methodology and our study methodology was that they restricted the amount that people could eat and we did not," explains Dr. Eric C. Westman, of the Lifestyle Medicine Clinic at Duke University Medical Center, who was involved with the study, "That's an important thing to focus on because...if you're told you can't eat as much as you want, this may put some damper on the mood, so to speak."

When deciding what type of diet to choose, it is clear that dieters should be aware of the potential mental implications of low-fat versus low-carb diets. 

Physician Spending More Time with Patients

The quality of care being provided by family physicians has improved in the past decade as doctors have also been spending more time with their patients. These finding were published in a recent report in the Archives of Internal Medicine in which a team of doctors evaluated more than 46,000 visits to primary care doctors between 1997 and 2005. The study looked at both the experience and satisfaction of the patient as well as the changing work patterns of the doctors.

 

Theirs results found that the average appointment increased to 21 minutes from 18 minutes in 1997 and the number of visits climbed to 338 million from 273 million.  A major factor in these changing visitation patterns is an aging population who tend to have more illnesses and require more attention. Furthermore, people are more proactive in managing their health and are going to the doctor more frequently and asking more questions during their visits. Doctors also have been prescribing more medication that has proven to be beneficial to their patients.

 

The evidence indicates that doctors’ compensation for their services has not matched their services and are making approximately 10% less in 2003 than they were in 1999.  Doctors therefore are working longer hours and taking on more patents in order to augment their income. This has led the research to question the sustainability of this level of care unless measures are taken to improve the current system. Reforms such as employing more nurse practitioners or physician's assistants were suggested in order to give doctors more time and freedom to see to their patients. 

Heart Bypass Study Finds Pumps Method Is Better

The most recent and comprehensive study comparing heart bypass surgery methods shows that the traditional technique, which uses a heart-lung machine or “pump”, is more effective than “off-pump” surgeries. Pump procedures, in which the heart is stopped and a machine circulates blood instead, had been the standardized method until the 1990’s. At that time, doctors became concerned over animal studies that indicated pump surgeries could result in higher stroke risk and deteriorated mental health. As a result, surgeons began to do the off-pump procedure, in which they operate on a beating heart rather than using machine. The off-pump method is now used in approximately 20% or 250,000 bypass surgeries a year but there has been no conclusive data indicating its superiority.

The report published in the New England Journal of Medicine shows that pump surgeries do not result in increased health complications and in fact is more effectual. The study analyzed 2,203 bypass patients from Veterans medical centers, half of whom received pump surgeries and the other half had the off-pump operations, over the course a year following their bypasses. Doctors found off-pump surgeries resulted in a higher likelihood of blood vessels closing and more blocked arteries, resulting in a greater incidence of repeat surgeries, heart attacks and deaths. Furthermore, pump surgeries did not carry a higher risk for stroke or any mental implications.

These findings may reverse recent enthusiasm for off-pump surgeries. “There was a lot of market pressure and memento behind this off-pump stuff,” said Dr. Galloway of the New York University Langone Medical Center in a recent interview with the New York Times, “The idea that people should go somewhere to get off-pump surgery is pretty much killed by this publication.

However, the study does not definitively negate the value of off-pump bypass surgery. Some factions argue that the surgeons involved in the study lacked the necessary expertise to successfully do the surgery. Furthermore, previous studies have shown women, the elderly and those suffering from other illnesses have better results with off-pump surgeries yet these groups were not part of the study.

Despite these concerns, the evidence presented in this report will no doubt change how doctors and their patients choose their method of surgery.

Activity Levels Strongly Correlated to Life Expectancy

It's never too late to start exercising. The addition of exercise into a weekly routine can significantly extend life expectancy at any age, even for the elderly. A recent Israeli study shows just how important exercise is for our physical and mental well-being. The Archives of Internal Medicine published the study in September.

The research illustrated perhaps what we already know, but made it even more apparent by focusing on the elderly. The study looked at active and inactive people in their 80s. The three-year survival rate was three times higher for active 85 year olds compared to those who did not exercise. This statistic is startling; those who do not exercise are more likely to die before someone who does. Simply put, exercise prolongs life. As little as four hours a week of slow paced walking is considered active; this can consist of 20 minute leisurely walks around your neighborhood. Walking is as beneficial as other forms of vigorous exercise for older individuals. 

The study also showed that there were many benefits for those who were previously inactive. Not only did these people feel better after beginning exercise, they were able to cut back on certain medications and felt less lonely. In fact, those who remain active in their 80's are less likely to experience depression and more likely to be self-dependent. Clearly, regular exercise is vital for your psychological health, as well as your physical health.  

Researchers took into account other factors that would affect life expectancy, such as smoking, genetics and current medical conditions. Even after considering these factors, the activity level of individuals was still found to be strongly correlated to long life. I hope this reinforces just how important exercise is for people of all ages; it is truly never too late to start!