Tag Archives: Money

Retirement Warning: Cable TV News Is Hazardous To Your Mental Health

The financial news on CNBC today is frightening for retirees and those nearing retirement, as it has been for the past week. If you switch over to CNN, the news is depressing. That’s really all you need to know. Don’t watch Cable TV news unless you feel strong. Cable TV news can only bring you down.

The financial news and the stock markets can be particularly toxic for senior citizens and people on fixed incomes. People nearing retirement often have significant investments in the equities markets, which can be volatile. Few people, if any, know when it’s time to get in or get out. People with too much invested in stock markets can lose a lot of their retirement nest egg in a few days.

People who are already retired are all too aware of the fact that retirement incomes are often fixed. That is, you’re not going to get raises year after year, except cost-of-living increases in Social Security, and COLA increases don’t even necessarily keep up with inflation.

On other cable news channels, talking heads often repeat the most violent story of the day, all day long, with constant replays of the same appalling film clip. Or in the absence of violence, they’ll chew over the insignificant political development of the day, or the most inane comment by a presidential candidate. The frequency of mass shootings, or any kind of shootings, is particularly saddening.

If you want today’s basic bad news, without the gory details, you can read the following indented paragraphs. If not, skip to the closing paragraphs that aren’t indented.

Bad news today, Wednesday: In the middle of the trading day, world stock markets continue to be chaotic. China, India, and Russia have another losing day. The Shanghai Index ended down 1.3 percent for the day. Generally speaking, stocks in Asia and Europe were down Wednesday. Developing economies seem to face a great deal of uncertainty. That’s practically today’s ONLY story on CNBC.

Meanwhile, the killing of a news reporter and photographer dominates the news on the other cable TV channels. That shocking tragedy took place live, on the air, early Wednesday morning. The two journalists were working for a Roanoke, VA, television station, filming a  story on location. The alleged killer is a former employee of the same TV station. The shooter was cornered by police several hours later on a Virginia highway and took his own life. New details of the story were reported all day. It was practically today’s ONLY story on CNN.

The financial losses in China, especially, are shaking markets all over the world, including the developed Western Countries, where economies are said to be relatively strong and continuing to grow out of the 2008 recession. Billions in value have been lost in the past week, especially in China. But even in the West, the economic picture is uneven. Greece and Puerto Rico are in deep debt.

In the past two days, markets in the U.S. and Europe have been trying to rally. But the rally failed in New York in the last hour yesterday. U.S. stocks had a good morning today, faltered in early afternoon, staged a rally in mid-afternoon.  Market experts are saying: DON’T PANIC. Sounds like good advice to moi.

Now it’s 2 p.m. Wednesday, which is like the witching hour. (Something about margin calls.) U.S. markets are now up for the day. People holding their breath from now to the closing bell. The takeaway, don’t watch the hour-to-hour stock fluctuations. Do as I say, not as I do 🙂 If you must, you can see the latest numbers from CNBC here.

On CNBC, analysts are naming stocks they say are down so far that they’ve become bargains. I’m not paying any attention to that. But then, I don’t have any money in the stock market, and I don’t have any to invest. Meanwhile, some experts are speculating that the market might be turning into a bear market. This stuff can drive you crazzzy!

I usually avoid giving advice, especially specific advice. I’m not qualified to give advice on most subjects. And even if one is qualified, unless someone asks for advice, I avoid volunteering it. Unsolicited advice is usually unwelcome.

The exception is advice from your health care professionals They need to give you advice, even if you don’t want to hear it. It’s for your own good; sometimes it can even be a matter of life or death. Listen to advice from your health care professional. Of course, when there are decisions to be made about treatment, the patient has the right to make the decision. Usually, the patient is wise to consult with health care professionals and family and friends. If you like, get a second opinion from another doctor.

Another exception is weather news. Often, knowing the weather news can help you stay safe.

Regarding news, I’m a retired newsman, so I claim a degree of expertise. Having been close to breaking news all my life, I hope I’ve built up some resistance to bad news. I also know when to shrug off news as irrelevant or silly or simply incorrect. I understand the effect that too much bad news can have on people. Older people have a tendency to watch too much television news, and are more susceptible to depression from the news, at least sometimes, than younger folks.

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Social Security Cost-Of-Living Increase For 2016 In Danger

This just in from AARP:  The annual cost-of-living (COLA) increase for Social Security recipients is probably not going to happen in 2016. Retirees depend on the COLA to keep the value of their Social Security benefit from depreciating over time.

Meanwhile, Medicare Part B premiums are almost certain to go up in 2016. Silver lining: if there’s no Social Security COLA, retirees whose Medicare premiums are deducted from their monthly Social Security benefits will not have to pay the higher Medicare premium

Here’s the full text of the AARP statement that landed in my email Friday:

 “Nearly 60 million Social Security recipients will probably not get a cost-of-living increase next year, according to projections in the 2015 Social Security and Medicare trustees reports.

This would be the third time Social Security beneficiaries have gone without a cost-of-living adjustment (COLA) since 1975, when automatic raises were put into place. The COLA this year was 1.7 percent, making the average monthly check for retired workers $1,334 as of May.

Increases in benefits are tied to the third-quarter average inflation rate compared to the same period the previous year. Inflation has been virtually flat in 2015, due to the crash in oil prices, says Michael Kitces, director of research with Pinnacle Advisory Group in Columbia, Md.

While that makes a COLA appear unlikely, it “is a projection and could change,” says Nicole Tiggemann, a spokeswoman with the Social Security Administration. But it would take a dramatic upturn in prices in the next few months to trigger a COLA for 2016.

AARP and other advocacy groups have long argued that the Consumer Price Index (CPI) used to determine the inflation rate and calculate annual Social Security COLAs doesn’t accurately measure the spending patterns of older Americans.

“Older Americans tend to spend their income differently from the working population that is measured by the current CPI,” says Alison Shelton, senior strategic policy adviser with the AARP Public Policy Institute. For instance, they spend more on health care, a cost that tends to rise faster than the inflation rate, she says.

The net effect of this difference has been about 0.2 percentage points a year, she says. In other words, if the standard inflation rate is 1.5 percent, for older consumers it feels like a 1.7 percent increase. “It tends to add up,” Shelton says.

The lack of a COLA would also have an impact on Medicare beneficiaries. Most of those who have Part B premiums deducted from their Social Security checks would not see an increase in those payments because rules hold them steady when there is no COLA. That’s about 70 percent of Medicare beneficiaries who now pay $104.90 a month in Part B premiums.

The rest of the Medicare beneficiaries — including those with higher incomes, those who didn’t participate in Social Security at their workplace and new beneficiaries — would bear the brunt of any premium increases. The latest Medicare trustees report projects that the base premium for these groups next year would rise to $159.30 a month under this scenario.”

More than the COLA is in danger, in the medium run and the long run.

I used to be confident that Social Security would continue to provide an income floor for older workers, at least for the foreseeable future. However, a number of developments in recent years have shaken my faith.

The inability of the American political system to effectively manage public revenues and expenses, the faltering economy, the embrace of austerity in advanced Western nations, and finally, the steadily increasing concentration of wealth among the few and impoverishment of the many, all these changes give me reason to worry about Social Security.

Most of all, the steady drumbeat of propaganda against Social Security seems to be creating a self-fulfilling prophesy of failure.

I personally don’t think the demise of Social Security is inevitable. But the prospects for deep cuts in the Social Security program seem to be growing. Same thing is true for Medicare and Medicaid, I believe. A likely outcome in my opinion: one of the three — Social Security, Medicare, or Medicaid — might be sacrificed in an attempt to save the other two.

Housing And Money And Cars, Oh My!

Quickly, without overthinking it, here are some of the retirement issues that fascinate me.

Shelter from the storm

First and foremost on my mind right now is:  Where am I going to live? Not as simple as it sounds.

One of the wonders of retirement is that we have freedom, perhaps for the first time in our lives, to choose our geography and environment. Stay put? Or resettle in Florida, or Alaska, or Panama, wherever?

It’s not simply a matter of what part of the country or the world; it’s also, what kind of environment? City, rural, small town? How important is it to be near family?

And critically, what kind of housing? Big house, little house, condo, apartment, tent, travel trailer.  For the sake of completeness, the options for some are reduced to: Sleep on a park bench, or a heating grate, or in the woods.

The many aspects of where and how to live are a consuming interest for me at present.

Dollars and cents

Financial issues loom large for many retirees. As I said in the previous post, Retirement Made Simple is NOT a blog about saving and investing for retirement. Too late for that, for me and for many! From where I sit, the money issue is about making do with what we have. How to conserve and use wisely the limited resources available?

The scare tactic favored by the investment industry is warning workers that if they don’t save and invest enough, they risk running out of money before they die. Talk about morbid advertising! For those of us not in the investment class, that is, for the rest of us, the issue is more immediate and more pressing.

The issue most retirees grapple with is: Retirement resources are limited. In the absence of a winning lottery ticket, or returning to paid work, my retirement income is fixed. It’s not going to increase, beyond the paltry annual Social Security cost-of-living increase, which is at the whim of Congress. Given the  present political climate, the cost-of-living adjustment could very well disappear.

Cut to the chase: For the rest of us, the retirement imperative is budgeting and economizing. Scrimping and saving. Or to put it in a more positive light, living a simple and frugal lifestyle. I suspect I’ll be talking about budgeting and simplicity a lot.

Hell on wheels

My car is an important resource. It grants the miraculous freedom of going to the grocery store or going on a cross-country road trip.

Most of us dread the moment when some responsible relative might confiscate our car keys. Or the day the state replaces our DL with a mere ID card because we can’t pass the eye test. Or even the time when we simply can no longer afford the luxury of a car.

There are other alternatives to a car, but those alternatives are closely related to local geography (see Shelter from the storm, above). In all too many modern American suburbs and rural areas, a car is not a luxury, it’s a necessity. We should seriously look into alternative modes of transport before the car issue becomes a car crisis.

And the list goes on

There are other issues of concern to retirees. Primary among them is health and illness. I’m not very well informed about health issues, but that probably won’t prevent me from writing about it.

I won’t avoid issues such as aging gracefully, playing a positive role in our family and community, and simply enjoying life. These are important parts of retirement, but I’m nearly clueless about such things. Nevertheless, I look forward to learning about those other aging issues, and probably writing about them.

And that’s a quick preview of what I hope to explore with you on this blog. Have I left out anything important or interesting? What would you like to talk about? Your suggestions are welcome.